Nortel Networks Corp. fired its president and CEO, Frank Dunn, today as well as its chief financial officer and controller. The termination of the top executives comes in the wake of mounting accounting trouble disclosures at the Toronto telecommunications equipment manufacturer.
Nortel named William Owens, who has been a director of the company since February 2002, as the new president and CEO. Previously, Owens was chairman and CEO of Teledesic LLC, a satellite communications company, and he served as vice chairman of the U.S. Joint Chiefs of Staff.
Nortels board chairman, Lynton Wilson, said the firings are about accountability for financial reporting.
"These actions are an important step in the process of restoring confidence in the Companys leadership and financial reporting," Wilson said.
Nortels disclosures of faulty bookkeeping follow a rash of similar accounting scandals at numerous large companies in the telecommunications and IT sectors, including WorldCom Inc. (now called MCI Inc.), Computer Associates Inc. and Adelphia Communications Inc.
The U.S. Securities and Exchange Commission and the Ontario Securities Commission are investigating Nortel, and the companys own audit committee is conducting a review.
Today the company announced that it will revise its financial results for 2003, in addition to revisions covering financial results back to 2000. It will report a reduction of about 50 percent in the 2003 net earnings announced previously.
Former CFO Douglas Beatty and former controller Michael Gollogly, who were put on paid leave of absence in March, were fired today as well. Four additional unnamed financial executives have been put on leave of absence, the company said.