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OSC overturns TSX ruling on CI Financial

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CI Financial (CIX-T) said on Thursday that Ontario regulators had overturned a decision by the Toronto Stock Exchange to allow Scotiabank, its top shareholder, a vote on the continuation of CI's shareholder rights plan.

The Ontario Securities Commission's (OSC) ruling means that a vote on whether CI's rights plan should be continued can only be submitted to independent shareholders.

Bank of Nova Scotia (BNS-T), which owns a 36 percent interest in CI and is not classified as an independent shareholder under the plan, said it was disappointed with the OSC's decision.

The ruling brings to an end a long-drawn and ugly dispute between the two banks over the rights plan, whose three-year extension is to be voted on by CI's independent shareholders in June.

"This process has been very costly to CI and an extraordinary waste of our time and could not under any measure be considered to be in the best interests of our shareholders," CI's CEO Stephen MacPhail.

Scotia was earlier allowed by the TSX to vote on the continuation of the rights plan after its Chief Executive Rick Waugh said it would be a violation of the bank's fundamental shareholder rights if it did not get to vote.

The rights plan, put into place in 2008, prevents a hostile takeover of CI and prevents Scotia from selling 20 percent or more of the shares without getting shareholder approval.

CI had offered to buy back 20 percent of Scotia's shares as part of a bought deal for Scotia's stake in the company, but Scotia rejected the offer. Scotia wants to shed its stake in CI, but also wants the right to choose the buyer.

MacPhail also said the OSC's ruling practically assured the continuation of the rights plan.

"CI's independent shareholders have shown exceptional support for the plan," MacPhail said in a statement.

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