Shareholder group fights Magna plan

A shareholders' rights group wantsthe Ontario Securities Commission to stop a plan by auto parts giant Magna International to pay founder Frank Stronach to give up control of the company.

The Canadian Foundation for Advance of Investor Rights said Tuesday that if the plan proceeds "it will strike at the heart of the fairness and the integrity of the Canadian securities markets."

The OSC said it will holda hearingon the issue next Wednesday.

Magna, based in Aurora, Ont.,is asking shareholders to vote June 28 on a planthat would see Stronach give up his voting shares in exchange for $300 million US and nine million common shares.

The foundation said the plan would provide an 18-fold premium to Stronach, the company's chairman,over what his shares are worth.

It also objected to the proposal to set up a joint venture to which Magna will transfer its electric car business and turn over its control to Stronach, although he willown only a minority equity stake.

The proposal has come under fire from many of the company's shareholders, who say the payment is excessive and the deal will dilute Magna's share value.