Nortel Networks named William Owens as its new president and CEO, replacing Frank Dunn, who was dismissed "for cause." Nortel Networks also fired its former chief financial officer, Douglas Beatty, and former controller, Michael Gollogly, both of whom had been placed on paid leave of absence by Nortel Networks on 15-March-2004. Four other individuals who were senior line of business finance executives have also been placed on leave of absence.
Nortel Networks Audit Committee has been undertaking an independent review of the circumstances leading to the restatement of Nortel Networks financial statements for 2000, 2001 and 2002 and the first and second quarters of 2003. Although the review is ongoing, the company has determined that financial results for 2003 will need to be revised. It has also determined that Nortel Networks will need to restate the financial results reported in each of its quarterly periods of 2003 and for earlier periods including 2002 and 2001. These restatements are likely to include:
- a reduction of approximately 50% in previously announced net earnings for 2003; these amounts will largely be reported in prior periods, resulting in a reduction in previously reported net losses for such periods including 2002 and 2001;
- a reported net loss for the first half of 2003 compared to the previously announced net earnings for that period;
- no material impact to prior period revenues; and
- no material impact to the Company's cash balance as at December 31, 2003.
In a statement, Nortel Networks' Board of Directors said the action was "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."
The new CEO, William Owens, has been a director of Nortel Networks since February 2002. Until this appointment, he was the chairman and CEO of Teledesic LLC, a satellite communications company.
Nortel Networks also announced the appointments of William Kerr as chief financial officer and MaryAnne Pahapill as controller have been made permanent. http://www.nortelnetworks.com
- Teledesic, a broadband satellite venture backed by Bill Gates, Craig McCaw Saudi Prince Alwaleed Bin Talal, The Boeing Company and others, suspended its development work in September 2002.
