PAGE 14, WEDNESDAY, FEBRLJARY 22,1978, WLITBY FREE PRESS i neement CANADIAN CABLESVSTEMS LIMITED Canadian Cablesystems Limiteti "CCS"), a corporation whose shares are publucly traded, owns, directly or indirectly, a numnber of broadcasting receiving undertakings' licensed by this Commission. ln a Public Announcement dateti October 7, 1977, the Commission' stted that, in its opinion, due to.the particular nature of the share- holdings of CCSthat corporation has been "effectively controlled by its directors anti management%. Information coming to the attention of the Commission between September 2 and November 22, 1977 indicated that there were major changes iii the shareholdings of CCS and that a contractual relationship, existeti between' two major new shareholders. On November 22, 1977 the Commission issued a Notice of Public H-earing setting forth the information of which it was then aware ad dalling the lîcensees'owned in whole or in part by CCS <herein referred to as the- "CCS Licensees") to a public hearing. The Notice stated in part: "In such circumstances, the Commission considers it desirable to review with the licensees,their shareholders and other interest- ed parties the implications of- the above described ownership alteraitions and understandings for the effective control of CCS". The public hearing was'held in Toronto January 17, 18 and 19, 1978. The Commission heard representat ions f rom or on behaif of the following: -the management of CCS, . the divisional management of CCS, -TWC Television Limnited "TWC"), -Edper lnvestments Limited ("Eciper"), -the Jarmain family, - Kingston Cable TV Limited, - Mr. J. E. Davis, - Canadien Broadcasting League. The question. of "effective control" over publicly traded companies is in manly instances a difficult one to answer precisely and the relevant indices can Vary, considerabty frpom case to case. In the present case, there' has been in recent mo in'ths à transfer in the ownership of approximately 50% of CCS common voting shares to TWC and Edper. The former is the wholly-owned subsidiary of Rogers Cable Communfications Ltd. and is controlled by Edward S. Rogers. The latter is owned and controlIled for the benefit of Edlward and Peter Bronfman and their respective families. The major shareholdings of CCS have changed sin ce September 2, 1977 approxicriately as fol lowst. SHAREHOLDER BEI Jonlab lnvestments Limiltedl controlleti by Brascan Limileti) Thse Royal Trust Company Management (inctuding 7.7% helti by Jarmain family) Montrl Trust Company Others/ 'FORE SEPTEMBER AS 0F JANUARM 1977. M71978.' 25.8% Public A rnna standings. In its public announcement of October 7, 1977 the Commission - ---- ------ > stateti: 25.6% 24.2% 18.3% 18.3% 9.4% 37.2% 100*.0% The shares of CCS acquired by TWC enti Etper have not yet been registereti in their respective namnes or in the namnes of their respec- tive nomînees on the books of CCS's transfer agent. In the case of Edper, registration bas not Vet formally been requesteti. In the case of TWC, registration has been formnally requesteti, but in view of the calling bf the hearing, the board of directors of CCS deferreti deal- ing with such request. in addition, CCS represetatives stateti that pursuant to the articles of continuance of CCS. its board of directors is requireti to refuse the registration of shore transfers anti has the powver to deny voting rights ro shares if, inIits opinion, such registra-' tion or votîng veoulti jeopardize the obtaining or continuied holding of licences by ît or ts subsidiauies under the Sroadcasting Act. Prior to September 2, 1977. of the three largest shareholders of CCS two, viz. Royal Trust andi Montreal Trust, were largely "passive" investors, regularly giving proxies to management andi not taking an active role in the direction of CCS. Indeeti, the Royal Trust shares are helti for the benef it of others rather thon on its own account. Thse third. Jonlab lnvestme>-nts Limniteti, initially became a shore- holder at the invitation of mnanagement, anti its nommiee drectors usually supported managemxent. The board of 15 colisisted « in the rmajority. of management plus, *"indepen ent"directors rather thon noryniu of various share blocs. "Canadien Cablesystems Limitd... bas, in the opinion of the Commission, been effectively controlleti by its directors and management.. The Commission, after considertion of ail the evidence in this case, f inds that in the light of the acquisition of voting sheres in COS in the quantities acquireti by TWC and Etiper, of the understandings between them regarding, inter elia. mutual support for the election of directors and certain buy-sell arrangements, and of their intention to seek a form of "chareti" or "participatîng" control alonig with other partieswere the shares registereti, there wotild be a suff iciently, changeti pattern of ownership anti potential exercise of'control in CCS that it coulti no longer be tiescribeti as a company effectively controilled by its directors and management. Accordingly, in the Commissions view,the registration of these share acquisitions would resuit in a change of effective control of CCS anti the CCS Licensees. In view of CCS management'% own conclusion about effective con- trol anti of the statement matie on its behaîf et the hearingregartiing the f iling of an application, the Commission anticipates receiving shortly an application in this matter. In its Notice of Public Hearing of Ný,vember 22, 1977, the Com- mission raiseti a second maitter in connection with the present item as follows: "in addition, the Commission wishes to explore the implications for the Canaduan Broadcasting systemn of a signif icant ownership andiddirectorate con netion between two of Canada's largest cable television organizations both oentered in the southern Ontario Region." At the bearing .lanuary 19, 1978. the Commission announceti that it would not preceeti at that timne to hear this matter. As it will probably b. an issue at any future hearing, the Commission makes no fuirther comment on i t« this-time. Seveuice riksin use Seven natural ice skating rinks are in use this winter in the Town of Whltby. The Central Lake Ontario Conservation Authiorty has provided facilities at the Cran- berry Marsh area along' Victoria Sfreet, and Scott's Pond Shas 'been cleared by users for local use. This pond is located north_ of Dundas Street East at Corbett Creek. The town's parks and re- creation departnient is flood- .îng -the Peel and Willow Park lacrosae boxes, and rinks in Centennial and Palmerson Parks. Another rink is set up at Meadowcrest Public School in Brooklin. junsigneti memnorandum. The existence of this memnoranr,çl was f irst made known to the Commission January 13, 1978, when TWC f iled i wth the Commission a vvritten agreement dated January 12, 1978, between TWC and Edper, attached to which as Sohedule A was a copy of that memnorandum. .That agreement essentially formalizeti the contents of the memorandum. The understandings between TWC andi Edper cen be sumrmrizeti as follows! <a> Neither Party seeks controi of CCS. <b) Neither party will increaseit shareholdings beyond 25.6% without the consent of the other. (c) -gach has-the right of f irst refusai with respect ta the other's shares. <(d> A buy-sell arrangement exists, pursuant to which either party can at any time "trigger"a situation in which, at the' option of the othar, one of them or a third Party wll acquire ail of the CCS shares helti by bo'th, subject to CRTC approval. <e) Each seeks not more than 3 members on the boardof CCS andi will support the other to obtain samne. (f) Each "bas full confidence in the present management" of - CCS. At the hearing, TWC and Edper undertook flot toamrend the fore- going without the prior approval of the Commission. Both parties stated that there are no other agreements or understandings, verbal or written, between TWC and Edper. The substance of the foregoing understanidings was conveyed to the Commission by TWC verbaII' October 4, 1977 andi by Edper in writing November 8, 1977, but the rights existing between themn as to CCS shares held by each were described oonly as "mutuel f irst refusai andi other purchase andi sale rights"in the case of TWC, and 00mutual rights of first refusai and related rights in respect of their shares of COS" in the case of Edper. At no time prior to January 13, 1978 did TWC or Edper <adviseý the Commission that there çxisted between. themn a buy-sell arrangement as described above. Representatives of CCS at the hearing stated un.equivocally that if the shares purchased b y TWC and, Etiper were duly registereti and accorded voting- rights, effective controi of CCS would have been transf erred. Riepresentatives of both TWC and Edper took thepositio'n et the hearing thet neither was or would be in a position to exercise effective control of ICCS as a result of their ownership of sheres of CCS because eech was independent of the other except with regard to the understandings outlined above. TWC spokesmen characterized their rôle in CCS as a ."participating investment", a "partnership" and a "joint Venture". Ediper representatives spoke of Etiper having an "important minority position". Both sew themselves not as exercising contrai either individualty or jointly, but as preventing anyone from having "absolute control". It vvas maintaineti by both parties that the understandlings between themn actually-preventeti a trensfer of effective Icontrol without prior Commission epproval, particularîy in view of the undertekings by both TWC and Edper to seek prior Commission epproval for any ementiments to their under- liigh scliolI meet Satruday Feb.25 from 2 p.m. to 5 p'.m. Gold, silvèr and bronze mnedals will be awarded for first, second and third place respectively, and. there wil be ribbons for fourth, fîfth and sixth place finishers- on completion of the last 'race. 6684865'101 B" ck S"SeisWkItb Lakefront Cottage - Haliburton Highlands. Beautiful 3 bedroom winterized cedar and log cottage in exclusive, Harcourt Park. 100 ft. frontage with sandy beach on Kennaway Lake with excellent fishing and 'boating. Knotty pine panelling in living room, Plywood panelled bedrooms, cottage, completely carpeted. $35,900.00. Caîl Doris Smith 668-8865 - 6554339. Open House 117 Michel Blvd., Whitby. 1:O00to 5:00OPM Sunday,. February. 16, 1978 Excellent 3 bedroom bungalow, spacious living and dining rooms, large kitchen, family room with fireplace. Thtis home. is vacant and must be sold. Take No. 2 high- way to Jeffrey Street in Whitby's -west end and follow the Fam-ily Trust signs or cail Margaret Cox 668-8865 - 668-6498. Irmamculate beautîfully decorated three bedroom ranch bungalow, situated on a 75 x 200 foot lot with a 20 x, 40- ft heated inground pool with a ec.ban2. Central air conditioning finisheçi rec roomu, with walkout to yard, walkout to deck from dining room. Custom built for r the discriminating buyer. $78,900.00. For an appoint- ment catiL inda Kubôta-668-8865 - 668-6285. or is to be considereti as, an opinion on the merits of any future application in this matter. Lise Ou imet Secretary General Carnival swim meet TWC1 Edper Eleznentary and Hlighi School swim meets wlf be held in connect ion with Whitby's Fifth Annual Winter Carnival at Iroquois Park Pool. The elementary swim nieet will bd held. Friday Feb. 24 from 7 p.m. à o 9 p.m. and the