Quebecor Inc. (QBR/B), pledging to become Canada’s fourth national wireless carrier, remains under the control of prospective separatist leader Pierre Karl Peladeau four months after the company said he would place his shares in a blind trust.
Peladeau, who controls 72 percent of the voting rights in Montreal-based Quebecor, hasn’t followed through on a statement the company made on March 9, the day he announced he was running for the separatist Parti Quebecois. The party lost the subsequent election, though he won a seat in the provincial legislature.
The Quebecor owner is a potential candidate for the vacant party leadership, University of Ottawa professor Luc Turgeon said.
Peladeau’s decision to retain direct control over the company founded by his father in 1950, means the federal government is crafting wireless policies that will help his company become a national carrier even as he prepares to run for the leadership of a party dedicated to separating Quebec from Canada.
“It will be controversial in the rest of the country,” Turgeon, professor at the School of Political Studies at the University of Ottawa, said in a phone interview. “Outside Quebec, the Parti Quebecois is often viewed as anti-Canadian so some people might wonder why this decision favors a company whose shareholder is potentially the leader of the secessionist party.”
On the Sunday he declared his surprise plan to run in a constituency north of Montreal, publicly traded Quebecor issued a statement of its own.
Softer Stance
“Following his decision to enter politics Mr. Peladeau has promised to place his financial interests in the Corporation in a blind trust or under a blind management agreement if he is elected to Quebec’s National Assembly on April 7,” according to the statement from Quebecor. “As of today, Mr. Peladeau will no longer take part in any decisions respecting the Corporation’s daily or strategic management.”
The company now takes a softer stance.
Quebecor spokesman Martin Tremblay said the stock pledge is a personal issue for Peladeau. The former chairman has relinquished all decision-making authority since stepping down from the board March 9, Tremblay said.
Antonine Yaccarini, a spokeswoman for the Parti Quebecois, said Peladeau isn’t required to put his shares in a blind trust since he isn’t part of the government. Peladeau didn’t return calls and e-mails seeking comment. On June 27, Peladeau told a group of reporters at the National Assembly that he is not legally bound by Quebec’s ethics code which only applies to provincial cabinet members.
Potential Conflicts
“He made the disclosure statement that is required of legislators, as did his colleagues,” Yaccarini said July 10 in an e-mail.
Even if Peladeau isn’t breaking any laws, his influence will raise questions about conflicts of interest, said Anne McLellan, former deputy prime minister for the Liberals under Paul Martin and now a senior adviser to law firm Bennett Jones.
“The law may require certain things -- but you have to ask yourself is that enough now that I’m an elected official in an opposition party and I’m dealing with the federal government,” McLellan said by phone from Edmonton July 10. “Expectations are much higher around transparency and accountability and insuring there are no conflicts of interest, real or perceived.”
After several failed attempts to promote a fourth carrier, the government of Prime Minister Stephen Harper now is turning to Quebecor to help achieve its six-year goal of greater competition in an industry dominated by three incumbent carriers.
‘Political Problem’
Last week Industry Minister James Moore earmarked additional airwaves for smaller operators. He confirmed that Quebecor, which said last month that it’s ready to become Canada’s fourth national carrier, qualifies for the spectrum. The block is being set aside for wireless carriers with less than 10 percent of the national market and less than 20 percent of market share among provincial wireless subscribers, Moore said in the statement.
Quebecor runs the country’s third-largest cable operator and has a mobile-phone business in French-speaking Quebec. It took a step closer to becoming a national wireless operator in February after spending C$233 million ($217 million) to buy airwaves across the country.
Quebecor shares fell 0.6 percent to C$25.75 at 2:43 p.m. in Toronto.
Peladeau’s political views may present a challenge for Harper as the prime minister pushes for a fourth national carrier.
“That may become a political problem for the Harper government -- some might find it somewhat strange that they’re throwing their lot in with his enterprise,” McLellan said.
“We do not comment on the business plans of individual companies,” said Jessica Fletcher, a spokeswoman for Moore, in an e-mail.