Frank Dunn, the chief executive of Nortel Networks has been fired, even as the company continues to investigate the accounting issues that have plagued the company, reports Bloomberg.
bq. Brampton, Ontario-based company also fired its chief financial offer and controller and said Director William Owens, a 63-year-old retired admiral and former vice chairman of the U.S. Joint Chiefs of Staff, will replace Dunn. Nortel shares tumbled as much as 29 percent. Nortel’s second restatement in less than a year calls into question the extent of Nortel’s recovery. “How trustworthy are any Nortel numbers now? Anything they come out with now is going to have to be checked and double- checked before anybody believes anything,” said Gavin Graham of Guardian Group of Funds in Toronto said. Guardian Group, which manages the equivalent of $2.43 billion in assets including Nortel shares.
Good point! Given the accounting troubles at Global Crossing, and now at Nortel, I have to question how real has been the comeback for the former Broadbandits.
bq. Nortel said today that although its current review hasn’t been completed, a previously reported profit for the first half of 2003 will be restated as a net loss. Full 2003 net income, which Nortel had reported at $732 million, will be cut by about half, with those amounts applied to earlier periods, reducing reported net losses in 2002 and 2001. The company said there will probably be no material impact on prior revenue.”This restatement appears to be more serious than I thought,” said Duncan Stewart, who manages the equivalent of $91 million in the Dynamic Canadian Technology Fund and whose firm owns Nortel shares.