STOCKS of the telecommunications giant Singtel saw heavy trading on Friday (November 1) after legal proceedings against its Optus Mobile subsidiary in Australia began 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 marked the lowest price recorded since August 2024.

At 1:24 p.m., Singtel was the most active window in both value and volume. The counter recovered slightly to trade at S$3.07, down 1.9 per cent or S$0.06, with 45.7 million shares changing hands.

According to data from ShareInvestor, two marriage agreements were registered in the first operations.

The intense trading in Singtel shares comes after the Australian Competition and Consumer Commission (ACCC) filed Legal proceedings against Optus Mobile for allegations of inappropriate sales conduct.

The commission is seeking penalties, consumer compensation, a compliance program and costs from Optus. Singtel said in a stock exchange 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.

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

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

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

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

However, 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.

However, the case could damage parent Singtel’s ESG profile as it “reignites reputational concerns,” Bloomberg Intelligence analysts Chris Muckensturm and Marvin Lo said. At the same time, the need to revamp its commission structure and potential penalties may impact margins.

“Disciplinary actions will not be sufficient to avoid an impact on the recovery of their earnings, and changes to remuneration will likely be required,” they said.

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