Nortel Releases Financial Information; Executives Fired
The Ontario-based Nortel Networks Corp. has finally released unaudited financial numbers to investors but the information has done little more than add to an already foggy situation, the National Post of Canada reported.
The company's long-awaited restatement for the first six months of 2004 did indicate that at least 10 percent of its work force-about 3,500 people-will be laid off by the end of the year, which the company hopes will result in $500 million a year in savings.
"It's a publicly traded company, and we still don't have any numbers from them. No one knows what the hell is going on," Karim Jamal, the Alexander Hamilton Professor at the University of Alberta, told the National Post. "They keep making vague disclosures and all they've created is a cloud of uncertainty over the company."
William Owens, the new chief executive of Nortel, confirmed that three more executives have been fired "for cause" for their part in an internal accounting scandal that Owens said will likely result in a restatement of the company's financial statements going back to 2000, the National Post reported.
The company is also demanding that the 10 senior executives who have been fired in the wake of the scandal return $10 million in bonuses they received last year. Letters have been sent to each of them, including deposed former chief executive Frank Dunn.
The bonuses, granted by the company's controversial executive bonus program, are being rescinded because the executives were in charge of the company's financial reporting, which is now under scrutiny by an audit committee comprised of a group of Nortel directors.
Two law enforcement agencies in Canada and the United States have begun criminal and regulatory probes while the Institute of Chartered Accountants of Ontario examines the role of the company's auditor, Deloitte & Touche LLP, the National Post reported.