CANBERRA: Australian Prime Minister John Howard has described the behaviour of executives at the country's biggest phone company Telstra Corp Ltd as “disgraceful”, as relations soured ahead of the telco's planned full privatisation.
Government MPs and senators met yesterday to approve bills for the planned A$30bil sale of the government's 51.8% stake in Telstra, including new regulations and guarantees of customer service.
Telstra's new chief executive Sol Trujillo on Monday issued a profit downgrade, knocking the shares to more than two-year lows and took a swipe at the government over the costs of regulation. One of his advisers said last week he would not even recommend the stock to his mother.
A government spokesman said 12 government members spoke in an internal debate about the new legislation. He said the MPs and senators were not happy with remarks from Telstra and suggested that Telstra's new management team should be “pulled into line”.
Howard agreed with the criticisms being levelled at Telstra from MPs and senators, the spokesman told reporters.
“Telstra's behaviour has been disgraceful,” he quoted Howard as telling the meeting.
Howard later told parliament that he had made his views clear to Telstra chairman Donald McGauchie. “I do not believe ... the remarks that were made by senior executives of Telstra were in any way helpful. I think it is the obligation of senior executives at Telstra to talk up the company interests, not talk them down,” he told parliament. “And that is a view which I have communicated very directly to the chairman of the board on behalf of the government.”
Telstra's shock profit warning has also drawn the attention of the country's corporate watchdog. The Australian Securities and Investments Commission said it was examining whether Telstra had properly informed all shareholders after announcing the profit downgrade.
"We are investigating Telstra's compliance with its continuous disclosure obligations following its announcement to the market (yesterday) signalling an earnings downgrade," the commission said in a statement. – Agencies
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