April 29, 2004

HANG ON DEAR, HERE COME THE MARINES!

Nortel clears decks for admiral (Mark Evans and Wojtek Dabrowski, National Post, 29/04/04)

Nortel Networks Corp. shares tumbled almost 31% yesterday after the embattled telecom equipment maker fired chief executive officer Frank Dunn and two other senior executives -- a move the company said is "particularly difficult but ... the right decision."

The surprise announcement is the latest fallout of an accounting controversy that has damaged Nortel's credibility and scuttled the positive momentum generated by the company's painful restructuring.

It also raises the possibility that after earnings are restated to wipe out a profit in the first half of 2003, the executives dismissed yesterday will have to return tens of millions of dollars in paid-out bonuses.

Mr. Dunn, chief financial officer Doug Beatty and controller Michael Gollogly were "terminated for cause." Nortel chairman Lynton Wilson would not provide specific reasons why the three executives were fired. He said Mr. Dunn's termination was "about accountability for financial accounting. That is the concern, that is the issue."[...]

William Owens, who has been a member of Nortel's board since 2002, was named Mr. Dunn's successor. Bill Kerr has been named CFO while MaryAnne Pahapill was appointed controller.

Mr. Owens, who had been vice-chairman and co-CEO with satellite operator Teledesic LLC, has an extensive military background.

The 63-year-old was vice-chairman of the Joint Chiefs of Staff and the second-ranking military officer in the U.S. From 1990 to 1991, he served as commander of the U.S. Sixth Fleet.


One of the great things about being Canadian is you know the U.S. military will be there to fix any serious mess you get yourself into.


Posted by Peter Burnet at April 29, 2004 1:10 PM
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