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
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.
Barbara Adam at