A class-action lawsuit against Telus Digital, formerly Telus International, was filed in the B.C. Supreme Court last month. The lawsuit alleges Telus overstated its artificial intelligence (AI) capabilities and shared positive expectations for profitability that led to financial losses for investors.
According to the Vancouver Sun, the lawsuit names Telus International and more than a dozen Telus executives and directors as defendants. These include Telus CEO Darren Entwistle and Telus International CEO Jeff Puritt.
The lawsuit alleges that Telus Digital was struggling to catch up with AI technologies while it told investors that profitability prospects were better than they really were. However, Telus failed to admit it “faced significant barriers, which the company hid from the investing public,” according to the lawsuit.
“In fact, Telus failed to disclose to investors that its AI offerings were provided on a trial basis, generated lower margins than the company’s legacy offerings, and were cannibalizing some of its higher-margin offerings,” said the lawsuit.
Elsewhere, the lawsuit alleges that Telus’ misrepresentations and lack of disclosure artificially inflated the company’s securities traded on stock markets. That resulted in investors purchasing securities at inflated prices before prices fell after the company admitted to Telus Digital’s struggles in May 2024 and August 2024 earnings reports.
The class action aims to represent people who purchased voting shares of Telus International between February 16th, 2023 and August 1st, 2024, and who held them during the alleged misrepresentations between May 9th and August 1st, 2024.
The allegations have yet to be tested in court.
Source: Vancouver Sun
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