Nortel, North America's biggest maker of telephone equipment, said it was not the target and that the charged executives were dismissed for cause in 2004.TORONTO (Reuters)
- The Royal Canadian Mounted Police laid criminal charges against
former Nortel Networks Corp Chief Executive Frank Dunn and other
onetime executives on Thursday, accusing the men of fraudulently
misstating the telecom equipment maker's results.
Aside from Dunn, who faces seven counts, former Chief Financial
Officer Douglas Beatty, and Michael Gollogly, Nortel's former corporate
controller, also face charges.
The market enforcement team of the RCMP said the three were also
accused of making false entries and omitting materials in Nortel's
books.
Police said the charges pertain to the period between the start of 2002 and June 30, 2003.
In a statement issued shortly after the charges were announced,
Nortel -- North America's biggest maker of telephone equipment -- said
it was not the target and that the charged executives were dismissed
for cause in 2004.
The accounting scandal that hit Toronto-based Nortel earlier this
decade was one of the major hurdles it faced in its turnaround efforts
after the tech bubble burst in 2001.
It also forced the company to restate its results a number of times,
shaking the investor faith in its prospects and triggering a bevy of
investigations.
The police said they received co-operation from the U.S. Federal
Bureau of Investigation, U.S. and Ontario securities regulators and
Nortel itself.
The investigation has been a lengthy one: the RCMP became involved
in the case as early as May 2004. In February of this year, a media
report emerged that the charges against the former executives were
imminent.
(Reporting by Wojtek Dabrowski; editing by Rob Wilson)
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