The Canadian Foundation for Advancement of Investor Rights (a.k.a. FAIR Canada) is calling on the Ontario Securities Commission (OSC) to hold a public hearing into the proposed privatization of Sirius XM Canada Holdings Inc.

Specifically, the OSC should examine whether the proposed transaction is fair to minority shareholders, FAIR Canada suggests: “At issue is the broad question of whether securities regulators will intervene to ensure that controlling shareholders, minority shareholders and boards of directors all comply with the spirit of regulations governing their conduct in privatization transactions.”

In particular, FAIR Canada says that a group of minority shareholders believe that there are “coercive elements” to the deal that oppress minority shareholders, namely that Sirius XM Canada has suspended its dividend while the deal is under consideration and that the company’s valuation is flawed.

In addition, the minority shareholder group argues that the CBC, which is also a minority shareholder, should not be allowed to vote on the deal with the rest of the minority shareholders because it will have an ongoing a business relationship with the company after the privatization, if it goes ahead.

The minority shareholder group, which includes Van Berkom and Associates Inc., Rondeau Capital Inc., Agilith Capital Inc., Lester Asset Management Inc., Avenue Investment Management, and JC Clark Ltd., has filed a complaint with the OSC about the proposed deal. Earlier this week, the group had announced that proxy advisory firm, Institutional Shareholders Services Inc. (ISS), has recommended voting against the deal.

Sirius XM Canada has said that it “strongly disagrees” with the minority shareholders and that their complaint is “completely without merit and does not accurately reflect the circumstances underlying the transaction.” It maintains that the deal is fair to the minority shareholders and backed by fairness opinions.

Last week, Sirius XM Canada announced that another proxy firm, Glass Lewis & Co., issued an opinion recommending that shareholders vote in favour of the deal. The shareholder meeting to consider the proposed transaction is slated for Aug. 30.

In the meantime, the OSC should hold a hearing to examine the transaction, FAIR Canada suggests: “The protection of minority shareholders’ rights is critical to preserving confidence in Canada’s capital markets, and the OSC ought to examine the proposed Sirius Canada privatization to assess whether it is being carried out fairly and in a manner consistent with the public interest.”