6 written questions asked at Telstra's 2022 EGM
October 11, 2022
6 written questions asked at Telstra's 2022 EGM approving an internal restructure, which was held on October 11 half an hour after the AGM.
1. If Telstra had attempted to legally implement this restructure by way of contract without using a scheme of arrangement, the courts and a shareholder vote, who would have litigated against us to prevent that from happening? Can you cite any examples of other listed companies which have gone through such an expensive process for what is an internal restructure that impacts no third parties in a material way?
Answer: we just followed the law.
2. Does the current DRP really need to be terminated as part of this process? Why can't the current instructions be grandfathered intro a new scheme? How many of our 1.25 million shareholders are currently registered for the DRP and is it true that as of October 20 when the scheme become effective, we won't have any shareholders registered for a DRP?
Answer: no, the DRP will be grandfathered.
3. What is so different about the Victorian stamp duty regime, that even with exemptions for what is an internal restructure with no assets changing hands, we are still going to be up for at least $18 million in additional stamp duty liabilities payable to the Victorian Government? In what way are all the other states different in their approach to Victoria when it comes to stamp duty?
Answer: all stamp duty regimes are different and we just follow the law.
4. It seems very unfair that foreign shareholders are going to be compulsorily sold up as part of this process. How many shareholders is this going to effect and what is the estimate in terms of the number of shares that we will be forcibly selling? If you simply issue new Telstra shares to these holders, do you really think ASIC or some other regulator is going to come after Telstra forcing us to act in such an unfair manner? Does the law need to be changed to be more accommodating of foreign shareholders?
Answer: it's absolutely miniscule. Less than 0.1% and less than 2000 shareholders in total.
5. When AMP sold its life business for $3 billion, Australian law did not require it to seek shareholder approval. Same when Suncorp recently announced the proposed $4.9 billion of its banking division to ANZ. Does the chair agree that Australia's shareholder approval regime is bizarre and inconsistent when we regularly don't get a vote on material transactions but an internal restructure like this requires a vote that is a waste of everyone's time and money?
Answer: It's not a waste of time and money but a very important move.
6. Are you disappointed that only 12,000 of the 1.25m Telstra shareholders voted in this scheme meeting? What sort of marketing campaign did you run to turn out the vote? That said, it doesn't really matter given that 99.2% of voted stock supports the scheme. Could this vote have been held as part of the AGM, rather than a separate meeting?
Answer: It's all effectively the same meeting, but the court ordered it this way. 99.2% is a thumping endorsement.
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