SHARES of the telecommunications giant Singtel experienced intense exchanges on Friday November 1 after the start of legal proceedings against its subsidiary Optus Mobile in Australia on October 31.

The counter hit a low of S$2.90 at 9am after the market opened, falling 0.3 per cent or S$0.01 amid heavy trading. This is the lowest price recorded since August 2024.

As of 1:24 p.m., Singtel was the most actively traded counter by value and volume. The stock recovered slightly to trade at S$3.07, down 1.9 per cent or S$0.06, with 45.7 million shares changing hands.

Two married trades were recorded in early trading, according to ShareInvestor data.

The heavy trading in Singtel shares comes after the Australian Competition and Consumer Commission (ACCC) filed a filing. legal proceedings against Optus Mobile following allegations of inappropriate business conduct.

The commission is pursuing sanctions, consumer remedies, a compliance program and costs from Optus. Singtel said in a stock market announcement on Thursday that while it could not “determine the amount of sanctions, if any”, it had taken disciplinary action against staff who engaged in misconduct.

BT in your inbox

Start and end each day with the latest news and analysis delivered straight to your inbox.

The case involves allegations of improper sales practices, including the use of debt collectors to pursue customers despite knowing their contracts were fraudulent.

The commission’s press release states that Optus allegedly sold mobile phones and plans to vulnerable customers, including those with cognitive impairments and learning disabilities.

Legal proceedings against Optus could lead to sanctions even if Singtel’s leverage ratio of less than two times provides a buffer, Bloomberg Intelligence credit analyst Sharon Chen said.

She added that alleged inappropriate business conduct could damage Optus’ reputation and lead to subscriber losses.

Still, the impact may “not be as severe as a data breach and network outage in previous years, with 429 consumers affected.”

In a similar case, Australian telecommunications company Telstra was fined A$50 million (S$43.5 million) in 2021 for comparable charges affecting 108 users.

The affair could, however, harm parent Singtel’s ESG profile as it “rekindles reputational concerns”, noted Bloomberg Intelligence analysts Chris Muckensturm and Marvin Lo. At the same time, the need to reorganize the commission structure and possible penalties could hurt margins.

“Disciplinary action will not be enough to avoid an impact on earnings recovery, and changes to compensation will likely be necessary,” they said.

Singtel will announce its financial results for the six months ended September 30, 2024 on November 13, it said in a statement.