* Mason Capital asks court for access to proxy voting
* Votes related to failed plan to merge two share classes
* Hedge fund says information to guide investment strategy
* Company says it may reintroduce share-unification plan
* Telus dismisses Mason as working for short-term profit
TORONTO, July 11 (Reuters) - A U.S. hedge fund has escalated its battle with Telus Corp by asking a court to force the Canadian telecom to reveal h o w much support shareholders had given to the company's failed plan to unify its two classes of stock.
Mason Capital Management LLC , its l argest shareholder, said it could base a decision on whether to increase or decrease its nearly 20 percent stake in the Vancouver-based company on knowing how much support the plan drew when shareholders voted in May.
The plan, which Telus withdrew when it became clear that Mason would block it, would have given a non-voting class of shares the same status as the more valuable voting shares.
As a short-seller of the non-voting stock, Mason likely made money by blocking the deal, which knocked the class lower. The hedge fund c ould look to profit again if Telus revives the measure as it says it may do.
While it was not immediately clear what Mason's end-game was, its c ontinued p resence on the shareholder list could stymie Telus' efforts to re introduce the plan.
Mason has hired Blackstone Group LP to seek out a buyer for the stake, a source told Reuters in June.
In the petition to the Supreme Court of British Columbia d ated May 10, Mason's lawyers asked for unredacted copies of the proxies submitted by holders of the voting stock.
Mason said Telus had provided copies but information related to the proposal had been obscured, making it impossible to determine how investors had voted.
Mason had bought 19 percent of Telus' voting shares ahead of the planned vote. The fund had borrowed a much larger number of non-voting shares and likely benefited as their value fell after Telus withdrew the vote.
At the time, Telus said that excluding Mason's opposing vote, the proposal would have been approved by both classes of shareholders with a total of 92.4 percent in favor.
The filing showed that Mason has since slightly added to its position, which is now at almost 20 percent. It did not say how many borrowed non-voting shares it still held.
Telus said it opposed the filing.
"This is just another tactic by Mason to try to advance their empty voting strategy in the interests of their own short-term profits at the expense of our other shareholders," spokesman Shawn Hall said in a statement.
Telus put its dual-share structure in place to comply with a law limiting foreign control of Canadian telecom companies at a time when U.S.-based Verizon Communications Inc was a major investor.
The law limits foreign direct ownership in a major carrier to 20 percent. It also bars foreigners from owning more than a one-third interest in the carrier's parent company.
The Canadian government recently passed legislation that enables a foreign buyer to control a telecom company with less than a 10 percent market share, a change that does not apply to Telus.
If Telus is shown to have breached the foreign ownership limits it could endanger its bids on valuable wireless spectrum in an auction due next year, Laurentian Bank Securities' Ron Mayers told BNN television.