The Stel Salaried
Pensioners Organization wishes to thank The Hamilton Spectator for permission
to post the following article by Reporter Tara Perkins published in the
February 19, 2005 edition
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Feb. 19, 2005. 01:21 AM |
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Stelco 'gags' a critic Keiper's
appointment to board sparks anger |
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By Tara Perkins |
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One of the fiercest critics of Stelco's bankruptcy protection has been appointed to the company's board of directors. In a move that angered pensioners and unionized workers, the company named Roland Keiper, president of Clearwater Capital, to the board. His appointmentwill prevent him from any further public arguments with Stelco, observers said. Also appointed was Michael Woollcombe, a shareholder adviser who has been working with Clearwater. "I think it's appalling," said Murray Gold, a lawyer for Stelco's retirees. "I think Stelco has been mismanaged for some time, (but) it's a new low." Gold will be in a Toronto courtroom on Wednesday, arguing against the appointments. Bill Ferguson, president of the United Steelworkers' Lake Erie local, said: "Stelco is still pandering to financial interests. Workers and pensioners are coming last again." Stelco's directors met yesterday to study bids to refinance or buy the steelmaker and will choose one shortly to bring to the court for approval. While shareholders now have two voices on the board, pensioners aren't even allowed to see the bids, Gold said. And a bidder who puts more money into shareholders' pockets will likely put less into Stelco's pension deficit, he said. Ferguson said Stelco is no longer allowing the union to speak to bidders. "They've done deals in the back room with the shareholders," he said. Stelco CEO Courtney Pratt defended the decision, saying: "The board has the right and ability to name new directors." Some people involved in Stelco's restructuring said this move might not work in shareholders' favour. "Keiper has been complaining to (Stelco's board) saying they are breaching their fiduciary duties" by not looking after shareholders' interests, one person said. "Now he's got fiduciary duties, and must act in the best interest of all stakeholders. "Sometimes you're better off to wrap your arms around a person who hates you." Keiper -- dubbed by one Toronto newspaper "the smartest guy on Bay Street" -- has been an active critic of Stelco's restructuring for months, arguing that bankruptcy protection is killing what otherwise could have been a healthy stock price. Last year, his Clearwater Capital teamed up with another Stelco shareholder, Equilibrium Capital, and submitted an offer to Stelco that would have given up to $125 million to shareholders. That offer has since been dropped. Keiper also sent lawyers to Stelco's court hearings, arguing against what he saw as favouritism toward Deutsche Bank. Last month, he released a statement saying Stelco's stock was undervalued, and he intended to ensure shareholders get something for their current investments after Stelco exits court protection. Keiper is thought to favour a refinancing bid for Stelco, as opposed to Russian steel giant Severstal's bid to buy the company outright. Deutsche Bank and Sherritt International have submitted offers that give the steelmaker money to upgrade its operations. A consortium led by TD Securities also has submitted an offer, a source said. Keiper is not thought to be in favour of paying off Stelco's entire pension deficit. The government, pensioners and the union want the winning bid for Stelco to include a plan that wipes out the $1.3 billion shortfall in a fund that would pay out pensions if Stelco ever went under. The company's bylaws call for a board of 10 to 20 members. Stelco shares ended the day up 20 per cent yesterday, at $3.00. tperkins@thespec.com |