Telstra Pays No Interest
The Age
Friday November 26, 1999
The Federal Government is standing firm against calls for it to start paying interest on funds still owed to as many as 2000 investors in the recent $16 billion Telstra2 share offer, despite delays of up to four weeks in processing and refunding application monies.
Overwhelming demand for Telstra2 shares in October led to a dramatic scale-back in allocations. About 125,000 refund cheques were written, and sale organisers said as many as 2000 cheques had not yet been delivered.
While some private investors contend the Federal Government is ``just playing the short-term money market" with the outstanding funds, sources inside the Telstra2 hotline centre say the sale organisers have blamed the delays on Australia Post.
An official spokesman for the Federal Government's Telstra2 share offer, Mr Ian Smith, who is a senior consultant at the public relations firm Gavin Anderson & Koortlang, said: ``The Commonwealth won't accept any claim for interest or costs, etcetera."
Mr Smith noted the Telstra2 offer document stated that no interest would be paid on any potential refunds, nor had the Government indicated previously that cheques would be delivered by a certain date.
Mr Smith declined to blame any particular party, but said there had been serious delays in mail deliveries during October and November.
On 5 November, sale organisers lodged about 1.5 million Telstra2 entitlement notices, including about 125,000 refund cheques, with Australia Post. All were expected to be delivered to applicants before 12November, and no later than 19November.
Hotline staff this week were told to advise investors that all cheques should be received by 3 December.
But sources confirmed sale organisers were still printing cheques as late as last weekend. This was attributed to difficulties in processing individual refunds to investors whose original application monies were included in pooled cheques. For example, households with several applicants may have paid for their share parcels with a group cheque.
This week, five representatives of the share registry firm Perpetual Registrars joined the hotline team to open the database and help staff deal with investors' queries.
* Telstra directors today are expected to formally approve the proposed appointment of Mr Bob Mansfield as chairman, allowing the newest boy on the board to succeed Mr David Hoare.
Mr Hoare is expected to remain as chairman until at least late December to smooth the transition period for Mr Mansfield, who recently resigned as special adviser to the Prime Minister, Mr John Howard.
The reporter owns Telstra shares.
© 1999 The Age