MONTREAL -- A shoot-from-the-lip Pierre Karl Péladeau has stirred normally circumspect senior management at Power Corp. of Canada POW-T into defending its hiring of former Caisse de dépôt et placement du Québec chief Henri-Paul Rousseau.
Paul Desmarais Jr., chairman and co-chief executive officer of Power, said yesterday that Mr. Rousseau is a welcome addition to the family-controlled holding company.
Mr. Desmarais made the comments to reporters after the appearance of a magazine, distributed at this week's Conference of Montreal, in which Mr. Péladeau, CEO of Quebecor Inc., QBR.B-T was quoted as saying that Mr. Rousseau's mandate at the Caisse was a "disaster."
Mr. Rousseau left the Caisse last August and joined Power at the beginning of 2009 as vice-chairman. Mr. Desmarais said Power is "very happy to have him. He is someone who has contributed to Quebec society. I believe he will be a great contributor to [Power]."
Power, a holding company with major interests in North American financial services, is a major sponsor of the 15th annual economic conference. The Desmarais family holding company is also Quebecor's principal rival in Quebec, where the two companies dominate the print media business.
In quotations accompanying a generally positive article in the French-language quarterly Forces about Mr. Péladeau's years at the helm of Quebecor, the media baron also said he refused to join others who stood to applaud Mr. Rousseau after the latter presented a ringing defence of his years at the Caisse at a business luncheon in March.
"I didn't even stand to applaud for such an unprecedented waste of public funds," Mr. Péladeau says in an apparent reference to the Caisse's disastrous results in 2008. "It's too easy to shine as an executive well-versed in PowerPoint communication, even though one has failed to deliver the merchandise."
A Quebecor spokeswoman said the quotes were accurate but that they were taken out of the context of a much longer interview.
The Forces article was written by Michel Nadeau, executive director of the Montreal-based Institute for Governance of Private and Public Organizations. Mr. Nadeau was second-in-command at the Caisse when the pension fund manager put up $2.9-billion in 2000 to help Quebecor outbid Rogers Communications Inc. in a $5.4-billion takeover of Quebec cable giant Vidéotron Ltée. In exchange, the Caisse got a 45-per-cent stake in Quebecor Media, the unit that now holds Vidéotron and Quebecor's other media assets, which include the Sun newspaper chain and broadcaster TVA.
Mr. Péladeau's decision to publicly criticize Mr. Rousseau's management speaks to the difficult working relationship the two men had as co-owners of Quebecor Media. Shortly after arriving at the Caisse in 2002, Mr. Rousseau oversaw a massive writedown in the value of the Caisse's Quebecor Media holding, much larger than the one taken by Quebecor on its stake in the unit.
The subsequent large increases in the value of Quebecor Media helped boost the Caisse's performance under Mr. Rousseau between 2003 and 2007.
A spokesman for Mr. Rousseau said he did not wish to comment on what Mr. Péladeau was quoted as saying.
Mr. Rousseau went on the record recently, before a provincial parliamentary commission, with a thorough analysis of his achievements at the Caisse, the spokesman said.
Mr. Rousseau has vigorously defended his record at the giant public pension fund, where he was chief executive officer from 2002 to 2008, saying that it performed well until the global financial tsunami hit after his departure.
Mr. Péladeau also said in the article that he has "a good memory" when asked about a previous statement by Mr. Rousseau that he does not recall a 2003 meeting with him. Mr. Rousseau, then Caisse chief, is said to have pressed Mr. Péladeau at that meeting to sell Quebecor's stake in Vidéotron to Rogers in exchange for cash and Rogers' stable of publications.
The news was first reported in January by The Globe and Mail, which cited sources familiar with the proposal and set off a firestorm of debate in Quebec. The Parti Québécois has argued that selling Vidéotron to Rogers would have left Quebec without a major homegrown player in the pivotal telecommunications sector.
In another shot across the bow in the article, this time aimed at Liberal Premier Jean Charest's government, Mr. Péladeau said the appointment earlier this year of former BCE Inc. head Michael Sabia as the new Caisse chief was unusually hasty and ad hoc.
"In Europe, if the government had acted in such a cavalier fashion in the appointment of the head of such an important position, people would have poured into the streets.... It's unacceptable!" Mr. Péladeau said.
© The Globe and Mail
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