The takeover of BCE will not violate rules on foreign control, the head of the takeover group told a skeptical CRTC chairman Monday.

"A clear majority of the equity in a privately-owned BCE will be held by Canadians, with day-to-day management and operation residing with management of the various companies," Ontario Teachers' Pension Plan CEO Jim Leech said in opening remarks at a CRTC hearing.

BCE three-month trading

"Keeping them in the hands of Canadians has been our intent from the outset."

The Teachers' Pension Plan is leading a $51.7-billion buyout of BCE, in partnership with two U.S. private equity groups and Merrill Lynch.

Under the terms of the deal, Teachers' will have a 51.6 per cent stake in BCE's non-voting shares. It will appoint five of the 13 board members, but a majority of the board members must be Canadian.

But CRTC chair Konrad von Finckenstein said Monday he needed more proof that Canadians would really control the telecom company, as federal law requires.

"I want to make sure the control is with Canadians and I'm not convinced of that, the way you constructed it," he said.

Von Finckenstein wondered if Canadians appointed to the board would end up answering to Americans.

"I hope you can address those points because they are of great concern to us," he said.

BCE shares gained 61 cents Monday to close at $36.50 on the TSX. That's still far below the $42.75-a-share in cash offered in the takeover deal. Some investors are concerned that the financing may fall through, given the turmoil in financial markets.

BCE has said it expects the takeover to close in the second quarter, assuming regulatory approval.

(With files from the Canadian Press)