Shareholders examine Telstra legal action

Law firm Slater & Gordon said it had been contacted by around 50 additional Telstra shareholders since it commenced a class action lawsuit on Friday, adding to an initial 50 angry at the telco's behaviour. In a statement issued Friday the firm said the number of shareholders involved could blow out to several thousand.

"We've had around 20 on Friday and around 30 today," a spokesperson told ZDNet Australia. "We've gone close to doubling what we initially had."

The legal action relates to Telstra's failure to inform the Australian Stock Exchange (ASX) of a forecasted drop in earnings until 7 September last year, despite presenting the information to the federal government on 11 August.

However investment regulator the Australian Securities and Investments Commission (ASIC) said in mid-December it would take no enforcement action over Telstra's actions, warning it instead to lift its game on disclosure.

Telstra pointed out this fact in its own statement to the ASX on Friday.

"Telstra is surprised to see a law firm display inherent interest in disclosures over the same period already examined by ASIC," the telco said in a statement.

Despite this, Slater & Gordon maintained Telstra had broken the law.

"The law is very clear, these details should have been released as soon as Telstra became aware of them," said a consultant with the firm, Joanne Rees, in the Friday statement.

"Had Telstra disclosed this information immediately, it is likely the share price would have fallen significantly," Rees said. "Investors are now claiming compensation for the difference between the price they paid and the value of the share if the market had known all financial details.

"If Telstra is found to have breached its obligation to disclose the information, investors who purchased shares at an inflated price could number in the thousands and compensation run to the hundreds of millions," she added.

Telstra said it would defend itself against the claim.