Corp-Ethics.com - Report: Nortel chief fired over finances

Company	Nortel Networks [Company Info]
	Track this Company (an email will be sent to you everytime a report is filed about this company)

Date	Issue	Title
28th Apr 2004	Other Issue	Nortel chief fired over finances

Report

Telecoms equipment firm Nortel Networks has fired its head Frank Dunn and two executives after conducting an internal review of its accounts.

Nortel also said it was reviewing its earnings figures for the past three years, and profits for 2003 would be revised lower by about 50%.

The company's accounts are already under investigation by the US Securities and Exchange Commission.

Shares in the Toronto-based company fell 28% in early trade on Wednesday.

Mr Dunn has been replaced by William Owens, a Nortel board member and former senior US military figure.

The company's chief financial officer Douglas Beatty and controller Michael Gollogly were also fired. The two had been on paid leave of absence since 15 March.

Nortel added a further four executives have been put on paid leave of absence "pending further progress of the independent review".

The company confirmed the investigation into the company's finances was "ongoing".

Net earnings for 2003 are thought to have been overstated by 50% while losses for 2002 and 2001 were understated, Nortel said.

The company expanded rapidly in the late 1990s at the height of the telecom boom.

But after the industry contracted it was forced to carry out massive job cuts - the workforce which once almost reached 100,000 employees was reduced by two-thirds.

Shares in the firm peaked at $89 during the tech boom before crashing to below 50 cents in 2002. Before the start of trade on Wednesday they stood at $5.64.

Other Reports on Nortel Networks
Date	Issue	Company	Report
14th May 2004	Fraud Investigation	Nortel Networks	U.S. Grand Jury Subpoenas Nortel Records

Related Reports from the Telecommunications Industry
Company	Issue	Report
Qwest Communications	Fraud Investigation	Former Qwest boss gets jail term
Vivendi	Fraud Investigation	Vivendi ex-chief Messier arrested
Motorola	Fraud Investigation	Bankrupt Adelphia sues Motorola
WorldCom	Fraud Investigation	Ebbers guilty of Worldcom fraud
Qwest Communications	Fraud Investigation	Qwest settles SEC fraud inquiry