AUSWR
The Association of U S West Retirees
 

 

 

Telstra Comes Out Against Government's Board Nominee
By Barbara Adam
The Wall Street Journal
Tuesday, September 26, 2006


CANBERRA, Australia --  Telstra Corp. rejected the government's candidate for a board seat, further straining relations ahead of an 8 billion Australian dollar, or about US$6 billion, share sale later this year.

Telstra's board advised shareholders not to vote for former government consultant and television executive Geoff Cousins, arguing it hasn't been able to properly assess his qualifications.

Mr. Cousins, who quit a government consultancy a month ago, has served on the boards of media company Publishing & Broadcasting Ltd. and television broadcaster Seven Network Ltd. Mr. Cousins was also chief executive of Optus Vision, the pay-TV unit of Australia's second-largest telecommunications company, Optus.

Investors Mutual analyst Jason Teh said the spat between the government and Telstra, Australia's largest telecom company, doesn't affect the investment case for the coming share offer.  The government plans to sell about 2.14 billion Telstra shares to local and overseas investors in October or November.  Another 4.3 billion shares will be placed in an investment vehicle established by Canberra earlier this year.

The share sale has been hamstrung this year by the rocky relationship between Telstra Chief Executive Solomon Trujillo and Prime Minister John Howard's government.

Mr. Howard said Mr. Cousins "is the right man for the job" on Telstra's board.  "He is eminently well-qualified for the job, that's the reason we're putting him up," he said.

Mr. Trujillo, who has clashed repeatedly with lawmakers since he joined Telstra in July 2005, said the board is unlikely to change its view on Mr. Cousins because there isn't enough time to conduct an adequate review.

"It raises a lot of questions in the eyes of investors and potential investors, and it is unfortunate that it has happened in this way," Mr. Trujillo said.

Despite the opposition of Telstra's board, the government will use its 51.8% stake in Telstra to elect Mr. Cousins at the company's Nov. 14 annual meeting in Melbourne.

Telstra shares yesterday closed at A$3.56 each, up two cents.

Write to Barbara Adam at barbara.adam@dowjones.com

http://online.wsj.com/article/SB115921640302773424.html?mod=telecommunications_primary_hs