TORONTO, ON – The Liberal government has sidelined the Hydro One board of directors in advance of the proposed sell-off of this public asset, according to a letter sent to the Ontario Securities Commission (OSC) on behalf of CUPE (Canadian Union of Public Employees) Ontario.
The letter charges that the Ontario government’s move contravenes securities laws and the public interest and erases fair representation of consumers, employees and investors during the planned sale.
The claim is made in a letter to the commission from Groia & Company, a Toronto firm specializing in securities law; the letter was written at the request of CUPE (Canadian Union of Public Employees) Ontario, which released the letter publicly (available here).
According to the letter, the government “recently removed all rights, powers and duties of the Board of Hydro One with respect to the IPO [initial public offering] and other transactions” – a decision that lawyer Joseph Groia characterized as “largely unprecedented” in advance of a public offering.
In an IPO, the board of directors is normally responsible for protecting the interests of all stakeholders in the corporation – and in this case, those stakeholders include the people of Ontario, the workers of Hydro One and the investors in Hydro One.
Summarizing the decision, Groia wrote: “In purporting to remove ‘all of their rights, powers and duties’ and restrict ‘any decisions regarding whether, how and when to proceed with the Transaction,’ it appears to us that the Government is attempting to improperly interfere with the mandatory duties of the Board as prescribed by 58(1) of the Securities Act.”
CUPE Ontario has been fighting a campaign against the privatization of Hydro One. The union sought a legal opinion about the IPO as part of its challenge of the process as part of the wider public campaign.
“Our lawyers alerted us to the lack of oversight by the Board of Directors and we recognized immediately the risk to other groups of stakeholders – workers, pensioners, investors, and indeed the people of Ontario, who are still the owners of Hydro One,” said CUPE Ontario President Fred Hahn.
CUPE Ontario, through this intervention to the OSC, is seeking
- the re-instatement of all board rights
- the restoration of the board’s obligation to oversee and comment on the IPO process
- assurance that Hydro One’s board will act to protect the interests of all stakeholders
The release of the letter also coincides with Friday’s announcement by Hydro One of a new set of board members.
“No matter how you look at it, privatizing Hydro One is a bad idea. Our hydro rates will go up, and we’ll lose control of our energy grid and lose a vital public asset that all Ontarians own in common and that generates hundreds of millions of dollars in revenue every year,” said Hahn.
He concluded: “In our view, this is a deal that doesn’t benefit the public interest, and now it looks bad for the few wealthy investors it was designed to benefit. The Liberals should respect the people of Ontario and stop the sell-off now.”
For more information, please contact:
Craig Saunders, CUPE Communications, 416-576-7316
Mary Unan, CUPE Communications, 647-390-9839