Nortel Admits Financial Results are in Dispute

Mar 22nd, 2004 • Posted in: News

Special to Newsline from Canadian correspondent Errol P. Mendes

OTTAWA
Nortel shares plummeted 21 percent on news last week that the company’s audit committee and a law firm were disputing recently announced financial results that stated that Nortel made a profit of $732 million in 2003.

In the wake of this news, the company has put its chief financial officer and controller on paid leave while the company works on a restatement of its financial reports, which will be the second restatement in recent months.

Meanwhile, the financial sectors in Canada and the United States are questioning the status of $140 million in bonuses for the management of the company — bonuses paid for stock performance based on results that are now in dispute.

A Nortel spokeswoman told the Globe & Mail that it would be “inappropriate to speculate” about whether the bonuses could be revoked.

Both the U.S. Securities and Exchange Commission and the Ontario Securities Commission are conducting inquiries into the accounting dispute.

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