June 25, 2010
TORONTO - Last night's decision by the Ontario Securities Commission that Magna must amend its circular with more robust and relevant disclosure before it can proceed with a shareholder vote sends a clear message to corporate boards that if they do not stand up for shareholder rights, close public scrutiny will follow, say officials at the Ontario Teachers' Pension Plan (Teachers').
The OSC decision follows this week's hearing, at which Teachers' was a member of an investor intervener group, held to review Magna's proposed transaction to eliminate multiple-voting shares.
"We have 289,000 reasons to be pleased that the OSC has ruled that Magna cannot proceed until the circular is significantly amended," said Jim Leech, President and CEO of the Ontario Teachers' Pension Plan, in stressing that Teachers' represents the active and retired teachers of Ontario. "It's part of our job to be vigilant on corporate governance issues as we manage teachers' retirement fund, but to do so, we need regulators to enforce strong standards when companies and boards fail to do so."
Wayne Kozun, Senior Vice-President, Public Equities stated: "We're pleased to see the OSC insist that Magna's board provide proper disclosure and better guidance to shareholders; we remain concerned that this transaction as it is currently structured could harm the integrity of Canadian capital markets."
Teachers' maintains that controlling shareholders should not be permitted to extract outrageous premiums from a company under the guise of normalizing its governance structure and opposes such transactions. "We do not believe premiums are warranted or the norm," said Mr. Kozun.
The Ontario Teachers' Pension Plan participated in a group of six Canadian shareholders that made submissions for the OSC hearing into Magna's proposed transaction.
With $96.4 billion in assets as of December 31, 2010, the Ontario Teachers' Pension Plan is the largest single-profession pension plan in Canada. An independent organization, it invests the pension fund's assets and administers the pensions of 289,000 active and retired teachers in Ontario. For more information visit www.otpp.com.
Director, Communications and Media Relations
Ontario Teachers' Pension Plan