St. LOUIS () -- The Ontario Court of Appeal has rendered a decision on the appeal by Rob McEwen, and it's bad news for Goldcorp's former chairman and founder.
According to , the application judge was correct in her interpretation of Section 182 of the Ontario Business Corporations Act (OBCA), and the "appellant has failed to show any palpable and overriding error in her findings and fact."
McEwen, who owns a 1.5% stake in Goldcorp [NYSE:GG; TSX:G], applied to the Appeal Court this week after the Divisional Court denied his motion to force a shareholder vote over the $8.6-billion merger with Glamis. Glamis [NYSE:GLG; TSX:GLG] shareholders overwhelmingly voted for the deal last week.
McEwen previously said the divisional court judge did not adequately address specific concerns with regard to Section 182 of the OBCA. He said that Section 182 "clearly states" that an "arrangement" of this type requires shareholder approval by law.
However, the Appeal Court ruled today that transactions that could be proposed as arrangements, but could also be lawfully implemented under other provisions of the OBCA as written in Section 182(6).
In a media conference call this morning, Rob McEwen announced his intention to fight for regulatory changes to the Canadian equities market.
"There is a fundamental flaw in the Canadian equities market," he said.
McEwen said he was fighting "for every Canadian company on the Toronto Stock Exchange," in the hope of setting a precedent.
He said the implications of the court's decision are very important because the law will change and it may diminish the involvement of shareowners in future mergers and acquisitions in Canada.
"You should not be able to disenfranchise shareholders by going to the courts," he said. "There's been no shareholder input, and that is wrong."
The rules of the Toronto Stock Exchange "do not conform to international standards," added McEwen. In New York, a shareholder vote is needed if 20% of a company's shares are involved in the transaction, while in London it takes 5%. This is not the case in Toronto, he said.
McEwen said he'd written to TSX and the Ontario Securities Commission (OSC). OSC chose not to intervene at this time and TSX had already given consent to the transaction in September, according to McEwen.
The OSC said they would not intervene until all avenues of corporate law were exhausted, said McEwen.
Goldcorp said that it expects the acquisition of Glamis to be completed by mid November or as early as next week.
McEwen admitted earlier today there is no sure way to stop the deal if the appeal is denied. But added, it "could be time" to take a look at selling some Goldcorp shares.
Goldcorp could not be reached for comment.
