Cable & Wireless Optus today announced that it would seek court resolution of an issue raised by the Australian Securities and Investment Commission (ASIC).
Norman Gillespie, Chief Financial Officer and Deputy Chief Executive of Cable & Wireless Optus, said the issue concerned the accounting treatment of wholesale cable capacity sales in the 1999/2000 financial year.
"This issue raises serious concerns, not only for Optus but for the whole telecommunications industry in Australia," Mr Gillespie said.
"Capacity sales is an area of high growth for the telecommunications industry and for the delivery of high-quality communications access to customers. As a leader in the wholesale area, Cable & Wireless Optus needs clarity of interpretation of accounting standards for its ongoing wholesale business and for satisfaction of customers.
"We are very disappointed that after more than a year, we have not been able to resolve this issue with ASIC. We would prefer to have resolved this through dialogue, rather than having to resort to the courts.
"This issue involves complex accounting issues, in an area that is new to Australia. We have five independent accounting opinions that support our view - all from leading firms.
"We are confident, based on the advice we have received from a strong range of experts, that the issue will be resolved in our favour," Mr Gillespie said.
"We have offered to make our experts available to ASIC experts, but ASIC has declined to allow them to meet."
The long running dispute relates to Optus' financial accounts for the 1999-2000 financial year in which a profit of $28 million from a capacity sale to AAPT was not recognised. In the same accounts, an $82m capacity sale was recognised. ASIC has questioned Optus' accounting treatment and Optus has been seeking resolution since 1999.
Mr Gillespie said that the issue needed to be resolved quickly as cable capacity sales were an ongoing and important part of Optus' wholesale business.
Cable & Wireless Optus said it would begin proceedings in the Supreme Court of New South Wales today.
For more information:
Cable & Wireless Optus
Phone: 02 9342 7850