CEO Sol Trujillo accused in Parliament of deliberately devaluing Telstra shares


Trujillo accused of deliberately devaluing Telstra shares


Queensland Nationals Senator Ron Boswell has accused Telstra chief executive Sol Trujillo of devaluing the company's shares.

The value of the Government's stake in Telstra dropped more than $2.5 billion after Mr Trujillo issued a warning about the impact increased regulation would have on the company's final sale price.

Communications Minister Helen Coonan says Mr Trujillo's comments and those of other executives might need to be referred to the Australian Stock Exchange.

Senator Boswell has questioned Mr Trujillo's motives.

"He's caused a lot of pain to a lot of mum and dad shareholders who bought shares," he said.

"He's devaluing them and I just cannot understand where he's coming from."

Legislation allowing the full privatisation of Telstra will be introduced to Parliament this week.

Senator Coonan hopes it will pass through the Senate in the next fortnight.

Parliament 'rush'

But the Federal Opposition says the Government must not rush the Telstra legislation through Parliament, especially when the company appears likely to cut services further.

There are suggestions Telstra is planning to slash the range of products it offers to customers.

A spokesman for the company will not confirm that but says a major review of operations will be finalised in October.

Labor's Stephen Conroy says Senator Coonan's timeframe does not allow enough time for the bill to be properly scrutinised.

"We'll be moving to try to establish the normal sort of Senate processes, which on our estimation would see at least four or five weeks for the bills to be considered," he said.

"That's not unusual. It's not an extensive investigation, so we would welcome that the National Party aren't going to fall for this three-card trick."

PM denies cover-up on state of Telstra

The Prime Minister says he would have broken the law if he had made public price sensitive information about Telstra contained in a confidential document he received on August 11.

Documents given to senior ministers, including John Howard, revealed years of under-investment in the company and share dividends being paid out of reserves.

Mr Howard did not make the information public.

"The reality is according to the advice I have from the Department of Finance and my own department, it would have been against the law for the Government to have done so," he said.

Labor's Kim Beazley accused the Government of a cover-up and of trying to prop up the share price.

"We have on our hands a major Government scandal," he said.

Mr Beazley says the information would have come as no surprise to the Prime Minister, as it reflected almost a decade of Government mismanagement of the company.

"It exposes their maladministration, their incompetence and their complete lack of care for the 1.5 million shareholders they created," Mr Beazley said.

"And their complete lack of care and concern for the people in regional Australia where they've got the Nationals by the 'short and curlies' and forced them into supporting this in a way that disgraces the National Party."

In question time Labor's Communications spokesman Lindsay Tanner asked "Isn't it the case that the whistle has now been blown on the Prime Minister and how does the Prime Minister explain his conduct to mum and dad shareholders who have been misled about the true state of the company?"

With ASIC investigating the question of whether Telstra dudded ordinary shareholders by keeping sensitive information from them, Prime Minister John Howard strongly denied encouraging the company to misrepresent its true position.

But rather than hear the share price of Telstra talked up, as the Prime Minister keeps suggesting, most fundmanagers and shareholders groups say they simply want to hear the truth.

(ED. With John Howard in charge , they will be waiting a long long time if they expect that!)

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This page was last updated Wed Sep 7 04:04:58 2005 Pacific time