Shares in Nortel Networks Corp. sank as much as 27% in early morning trading following the announcement that CEO Fr...
April 28, 2004
Shares in Nortel Networks Corp. sank as much as 27% in early morning trading following the announcement that CEO Frank Dunn and two other senior executives with the company had been fired for cause.
William Owens, a company director who also served as the Commander of the U.S. Sixth Fleet during Operation Desert Storm, has been appointed president and CEO of the company.
“I am fully committed to doing all that is necessary to maintain the business momentum and leadership position of this company,” he said in a statement issued today.
“As an organization, we remain committed to our business strategy of technology and solutions leadership in helping our customers transform their networks to drive revenue growth and improved productivity. And importantly, I want to see this company meet the highest standards of integrity and transparency in its financial reporting.”
Dunn, former chief financial officer Douglas Beatty and former controller Michael Gollogly have all been fired as a result of financial reporting irregularities. Beatty and Gollogly were placed on paid leave of absence in March.
A Nortel audit committee has indicated there will be a reduction of upwards of 50% in previously announced net earnings for 2003 and reduction for reported net losses dating back to at least 2002.
“The Board of Directors believes 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,” a statement from Nortel said.