Telstra spends AU$5m to settle shareholder suit

Telstra has settled a class action lawsuit brought by law firm Slater and Gordon on behalf of the telco's shareholders for AU$5 million.

As part of the payment, Slater and Gordon is seeking AU$1.25 million to cover funds and external disbursements.

The suit, launched in 2005, was lodged against the telco after it made information available in a government briefing on 11 August 2005 that it did not share with the ASX until 7 September that year.

The briefing reportedly told the government Telstra had underinvested in its infrastructure and predicted a future decline in earnings.

Around 30,000 shareholders are eligible for a slice of the AU$5 million settlement, which is subject to Federal Court approval.

Telstra said it has always kept its shareholders informed but decided to settle the case after it was approached by the lawyers.

The telco's group general counsel Will Irving told ABC Radio: "AU$5 million is absolutely it from our perspective ... the reason partly is it's less than we would have spent on lawyers."

If the settlement is not accepted by the court, Telstra CEO Sol Trujillo will be among the company executives to take the stand, Irving said.