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Nortel fires CEO, CFO and controller
CTV.ca News Staff
Nortel Networks has fired its chief executive Frank Dunn "for cause," as well as its former chief financial officer and former controller as it reviews the circumstances leading to the restatement of financial results going back as far as 2000.
Dunn, who took over the job in autumn 2001, is being replaced as president and CEO by William Owens. He was appointed as a Nortel director in February 2002.
Former CFO Douglas Beatty and former controller Michael Gollogly have also been "terminated for cause." They had both been placed on paid leave of absence on March 15.
At that time, William Kerr was made chief financial officer and MaryAnne Pahapill controller. Those appointments have now been made permanent, Nortel said Wednesday.
In addition, four other unnamed employees who were "senior line of business finance executives of Nortel Networks" have been placed on paid leave pending further review.
Nortel is under investigation by the U.S. Securities and Exchange Commission and by the Ontario Securities Commission for accounting problems.
Lynton (Red) Wilson, chairman of the board for Nortel Networks, said in a news release that the actions announced today "are about accountability for our financial reporting and are in the best interests of the Company and all of its stakeholders, including our investors, customers and employees."
"These actions are an important step in the process of restoring confidence in the company's leadership and financial reporting."
Following a review by the Nortel Networks audit committee, the company also announced:
A reduction of approximately 50 per cent in previously announced net earnings for 2003
A reported net loss for the first half of 2003 compared to the previously announced net earnings for that period
The Brampton, Ont.-based company had been due to report first-quarter results on Thursday. That has been delayed now.
"The company can report, on a preliminary unaudited basis, that its cash balance as at March 31, 2004 was approximately US$3.6 billion, down from approximately US$4.0 billion as at December 31, 2003," the news release said today.
In trading this morning, Nortel shares stumbled $2.30 on the TSX, or 26.78 per cent, down to $5.55.
Nortel stock closed on the Toronto market Tuesday at $7.58, down nine cents. That is far from its once high price of $124.50 in the summer of 2000.
"I am fully committed to doing all that is necessary to maintain the business momentum and leadership position of this Company," Owens said in a news release.
Before his appointment at Nortel, Owens was the chairman and chief executive officer of Teledesic LLC, a satellite communications company. He was vice chairman and co-chief executive officer from August 1999 to June 2003.
Prior to that, he was president, chief operating officer and vice chairman of Science Applications International Corporation (SAIC), one of the largest employee-owned high-technology companies in the United States.
Owens has also served as vice chairman of the United States Joint Chiefs of Staff, and was the second-ranking military officer in the United States.
CTV.ca News Staff
Nortel Networks has fired its chief executive Frank Dunn "for cause," as well as its former chief financial officer and former controller as it reviews the circumstances leading to the restatement of financial results going back as far as 2000.
Dunn, who took over the job in autumn 2001, is being replaced as president and CEO by William Owens. He was appointed as a Nortel director in February 2002.
Former CFO Douglas Beatty and former controller Michael Gollogly have also been "terminated for cause." They had both been placed on paid leave of absence on March 15.
At that time, William Kerr was made chief financial officer and MaryAnne Pahapill controller. Those appointments have now been made permanent, Nortel said Wednesday.
In addition, four other unnamed employees who were "senior line of business finance executives of Nortel Networks" have been placed on paid leave pending further review.
Nortel is under investigation by the U.S. Securities and Exchange Commission and by the Ontario Securities Commission for accounting problems.
Lynton (Red) Wilson, chairman of the board for Nortel Networks, said in a news release that the actions announced today "are about accountability for our financial reporting and are in the best interests of the Company and all of its stakeholders, including our investors, customers and employees."
"These actions are an important step in the process of restoring confidence in the company's leadership and financial reporting."
Following a review by the Nortel Networks audit committee, the company also announced:
A reduction of approximately 50 per cent in previously announced net earnings for 2003
A reported net loss for the first half of 2003 compared to the previously announced net earnings for that period
The Brampton, Ont.-based company had been due to report first-quarter results on Thursday. That has been delayed now.
"The company can report, on a preliminary unaudited basis, that its cash balance as at March 31, 2004 was approximately US$3.6 billion, down from approximately US$4.0 billion as at December 31, 2003," the news release said today.
In trading this morning, Nortel shares stumbled $2.30 on the TSX, or 26.78 per cent, down to $5.55.
Nortel stock closed on the Toronto market Tuesday at $7.58, down nine cents. That is far from its once high price of $124.50 in the summer of 2000.
"I am fully committed to doing all that is necessary to maintain the business momentum and leadership position of this Company," Owens said in a news release.
Before his appointment at Nortel, Owens was the chairman and chief executive officer of Teledesic LLC, a satellite communications company. He was vice chairman and co-chief executive officer from August 1999 to June 2003.
Prior to that, he was president, chief operating officer and vice chairman of Science Applications International Corporation (SAIC), one of the largest employee-owned high-technology companies in the United States.
Owens has also served as vice chairman of the United States Joint Chiefs of Staff, and was the second-ranking military officer in the United States.
