Telstra faced the wrath of angry shareholders at its Annual General Meeting in Sydney today, with one attendee accusing Telstra CEO Ziggy Switkowsky and Chairman Bob Mansfield of being on -cloud cuckoo".

In their opening addresses to shareholders, the two Telstra directors gave a rosy overview of the company's future direction and positioning in the telecommunications playing field.

Chief executive officer Ziggy Switkowski noted the more -demanding environment" of late and slowed market growth.

-Telstra has not escaped these changes untouched, and our revenues have flattened, but I can assure shareholders that while conditions at present are very challenging, nothing that has happened in the past year has diminished our optimism for the medium to long term," he said.

-We see a Telstra that is very robust setting the pace, continuing to support our customers, maintaining our market share, and poised to take full advantage of any industry and economic downturn."

Company chairman Mansfield acknowledged that the -shine has come off telcos - both globally and domestically", and that growth and trading conditions in the industry are -subdued", but said that the telecommunications industry will -come back" and that Telstra will bounce back -more quickly than any of our rivals".

However, shareholders were not so convinced.

-All we've heard is a very deliberate, very beautiful, rosy story," one disgruntled AGM attendee said. -I don't know which cloud cuckoo these two people are sitting on, because if you look around here at the grey hairs, the mums the dads - who depend on their shareholdings in Telstra - they've been sold down the drain... They've lost 40 percent of their shareholding value," he said.

In his address to shareholders, Mansfield admitted that Telstra was disappointed at the current share price and said he would like to see it higher. The second tranche of Telstra shares are currently priced around the AU$5 mark, when they were bought by shareholders, of which Telstra has about 1.9 million, for AU$7.40.

-Certainly, investor sentiment towards telco stocks around the world has dulled somewhat, but our challenge is to have our share price accurately reflect our strong performance."

Mansfield also put the telco's flailing share price down in part to Telstra's reduced weighting in the Morgan Stanley Capital International Indices.

Mansfield acquiesced that whilst it would be -little comfort" to shareholders, Telstra's share performance has performed better than its European, Asian and US peers.

-Telstra's strong balance sheet, cashflow, our credit rating and conservative debt levels all have us well-positioned to take advantage of an economic and industry upswing and to fully exploit our potential on a number of fronts, delivering customer satisfaction and sustainable shareholder value," Mansfield said. -So my message today is a simple one, we are very well positioned, we remain a quality telecommunications company and we stand out positively in the global industry."

Telstra's board of directors were also slammed by shareholders for not debating company matters prior to the election and re-election of board members.

"I think it's pretty outrageous manoevre by the board," Communications, Electrical and Plumbing Union (CEPU) representative Len Cooper said. "In the past, we had the opportunity to put a view on the reports of the Chair and the CEO before the elections. You would think that it's pretty normal if there's going to be an election of directors that people would want to hear the views of other shareholders and the candidates on the reports that have been given by the CEO and the Chair. That's the procedure we've used in the past. In my view the reports given to us so far have been very rosy and very glib and we ought to have the opportuntiy to debate those out...so that people have an idea of the views of the various candidates on those direct issues that effect this meeting," he said.

Other shareholders expressed the view that the election of board directors, prior to the open forum for shareholder debate, indicated that the telco giant didn't want to discuss certain issues prior to the election.

Copyright © 2009 CBS Interactive, a CBS Company. All Rights Reserved.
ZDNET is a registered service mark of CBS Interactive. ZDNET Logo is a service mark of CBS Interactive.