Stephen, I’ve just been made aware of your comments on ABC Sydney this morning from an alleged Telstra “insider” critical of Sol Trujillo and his management team. I don’t know who your insider is, but I’d suggest they are inside a broom cupboard.

Staff I talk to have been impressed by Sol Trujillo’s performance and commitment to Telstra. He and his team have made every effort to be open and approachable – the claims you are making are false and malicious.

And Stephen Mayne writes:

We’ve also heard that guests of Sol and Corinne Trujillo in the corporate box at Telstra Dome recently were equally struck by his disdain for the PM and his preparedness to pursue a “whatever it takes” approach to winning the argument.

If Sol does indeed continue down this mooted path of running an advertising campaign against the government, withholding capital investment, selling off parts of Telstra and launching court action against regulatory decisions, there is no way the government will be able to proceed with T3 in 2006.

Sol and his three amigos were hired to get the share price up. But so far they have only managed to scare the horses and destroy value. That said, there are quite a few Telstra veterans quietly egging him on. The company badly needs a shake-up, provides a pretty ordinary service and has long just been putty in the government’s hands.

The appointment of Donald McGauchie as chairman last year was not something the government wanted because he is one of the most obsessive corporate hard-liners out there. This was fine during the 1998 waterfront dispute, but he was said to be the last James Hardie director to agree with the $1.5 billion asbestos compensation deal and is now supportive of the incredibly hard line being taken by Trujillo and his cabal of American imports.

If this continues, the government has some tough decisions to make – and the first could well be injecting some new pro-government directors onto the board at the forthcoming AGM. The government’s role as Telstra board kingmaker has been on display over the years when the relevant ministers put out a press release announcing who is coming and going. Check out this example from 2001.

However, it is unclear who will be retiring this year because there are only six directors left, following the departure of the PM’s closest allies, Tony Clark and John Ralph, two weeks ago, although the Telstra website is yet to catch up with this fact.

Charles Macek and Belinda Hutchinson were elected in 2004 and John Fletcher, Donald McGauchie and John Stocker got new three year terms in 2003. This means that Catherine Livingstone is the only director definitely up for re-election this year, although one-third of the board must spill each year.

The government has some big decisions to make – and fast. If they want to roll Trujillo and McGauchie they will need to get a majority of compliant directors in place before the notice of meeting goes out in the next four weeks.