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Telecommunications The Telstra cost blow-out that led to a $7 billion bonus
Telecommunications The Telstra cost blow-out that led to a $7 billion bonus | The Telstra cost blow-out that led to a $7 billion bonus |
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| by Alex Zaharov-Reutt | |
| Saturday, 28 June 2008 | |
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Page 1 of 2 An article in The Australian details the costs undertaken to conduct the roadshow, which are also highlighted in a report by the Australian National Audio Office (pdf link). The total cost of the T3 sales effort is reported to have cost AUD $204 million, although over $300 million had reportedly been allocated for T3, and the Telstra team’s use expensive 5-star hotels (at well over $1000 per night) and private jets has been questioned. The T3 tranche was expected to raise AUD $8 billion, but in the end raised $15 billion, a substantial boost over initial expectations. In another article from The Australian, both Donald McGauchie and Sol Trujillo were questioned over the ANAO report’s findings. McGauchie is reported to have said in a question over the reportedly lavish spending at the Melbourne T[Life] store launch: “It's nonsense, that's all I have to say. We raised $15 billion when we were expected to raise $8 billion.” Trujillo was also asked about the spending, and in response is reported to have said: “You mean the success of a $7 billion capital raising above what the plan was? We're very happy with it. I think [former Coalition Government] Senator [Nick] Minchin who was leading the process was very happy with it." In a report at News.com.au, Trujillo is reported to have also said: “We're here to talk about our store opening today. I'm here running Telstra and very happy and satisfied and excited about what we're doing with our customers today." When asked further questions, Trujillo referred to his answer that he was at the event to talk about the T[Life] store opening. Continued on page 2. |
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