Telstra won’t rule out legal action over forced split

Telstra chairman Catherine Livingstone would not rule out legal action if the company could not reach an agreement in negotiations with the Federal Government on the proposed breakup of the company.

At Telstra's annual general meeting today, a shareholder asked Ms Livingstone for assurance as to whether court action would be taken if an outcome could not be reached.

"Would I be able to ... get assurance ... that in the outcome of the negotiations with the government, they would not barter away our option of taking the matter to the court should the need arise?," the shareholder asked.

Ms Livingstone did not rule out legal action.

“In having the discussions, our intention is to protect shareholder value and that protection is being by whatever means is appropriate depending on the circumstances,” Ms Livingstone said.

“It’s a diplomatic answer but it’s the right answer," Ms Livingstone added.

Linked gallery: Photos: Telstra AGM 2009

Ms Livingstone said that "all of Telstra’s rights" would "be protected" through negotiations with Government.

"If we do ultimately propose a significant change we will bring that to shareholders for endorsement," she said. "There will be no bartering".