By Adriano Marchese

As Canadian National Railway Co. approaches an upcoming special meeting in March, the railroad warned its shareholders against a bid to replace four independent directors by TCI Fund Management Ltd, one of its largest investors.

In a letter to shareholders Tuesday, the Canadian railroad called the plan by TCI, which controls about 5.2% of CN's outstanding stock, "myopic and destructive to longer term value." TCI Fund also holds 8.38% of CN Rail's competitor, Canadian Pacific Railway Ltd.

"CN's Board and management team continue to act in the best interests of the company's shareholders, customers and all other stakeholders. Meanwhile, TCI, Canadian Pacific's largest shareholder, has made misleading claims which are disruptive to CN's sustainable value creation efforts," the letter states.

In mid-October, CIFF Capital UK LP and the Children's Investment Master Fund, acting by their investment manager TCI Fund Management Ltd., nominated railroad industry veteran Jim Vena to replace the now-retired chief executive officer, Jean-Jacques Ruest.

TCI Fund had also named a set of new nominees for the board that include Gilbert Lamphere, Allison Landry, Rob Knight and Paul Miller.

In a letter on Oct. 18, TCI said "the knee-jerk, reactive, one year strategic plan is focused on short-term targets for Operating Ratio, huge share buybacks, asset sales, capital expenditure and head count reductions. The operational plan does not acknowledge and address the fundamental issue of a lack of a culture of excellence, and is concerning because the network and operations are unprepared, and the current leadership team lacks the ability and credibility to execute it."

In response, CN said that Operating Ratio is important as a performance measure.

"But we are not in the "OR business". We are in the business of moving freight safely, reliably, efficiently and sustainably to power our customers' businesses, help grow the North American economy and create shareholder value by doing so," CN said.

The special meeting of shareholders is set for March 22, 2022.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

11-02-21 0948ET