Telstra share trades under scrutiny

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Telstra share trades under scrutiny

Matter referred to ASIC.

Trades in Telstra (ASX:TLS) shares are to be scrutinised this week after Federal politicians were alerted to what may be irregular trading prior to the historic signing of an $11 billion financial heads of agreement between Telstra and NBN Co.

The Australian Securities and Investment Commission (ASIC) confirmed it has been requested by Financial Services Minister Chris Bowen to make inquiries with regards to share trades in Telstra stock late Friday.

But a spokesman for the regulator said it would be premature to consider a formal investigation and that the regulator was not yet in a position to make any comment.

A report in the Sydney Morning Herald this morning noted that Telstra shares jumped 2.2 per cent on Friday, whilst the ASX200 rose only 0.5 percent.  

As reported on iTnews, the Monday following the announcement saw a flurry of activity, with shares closing a further 3.4 percent higher, providing a healthy earner for any shares purchased on Friday.

Almost 212 million shares were traded on Monday -- a significant increase from the three-month daily average of 53,767,700.

On Friday, 61,957,651 shares were traded according to data on Google Finance.

Opposition Leader Tony Abbott said that should claims of irregular trading prove "credible", they "should be investigated by the relevant regulator."

For how long might insiders have known of the deal?

According to both the Federal Government and Telstra, the deal between Telstra and NBN Co was signed over the weekend, after the Telstra board convened a long-scheduled meeting in Canberra.

In a press release issued on Sunday by Prime Minister Kevin Rudd, Communications Minister Stephen Conroy and Finance Minister Lindsay Tanner, Government funding of a new entity called "USO Co" - which promises to ease the regulatory burden on Telstra - was "provided for in the 2010-11 Budget", devised many months earlier.

A spokesman for Senator Conroy's office told iTnews the deal was "signed Sunday morning".

"Negotiations have been underway for some time and Government contributions were factored into the Budget," the spokesman said.


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