TORONTO (Reuters)- The Royal Canadian Mounted Police laid criminal charges againstformer Nortel Networks Corp Chief Executive Frank Dunn and otheronetime executives on Thursday, accusing the men of fraudulentlymisstating the telecom equipment maker’s results.
Aside from Dunn, who faces seven counts, former Chief FinancialOfficer Douglas Beatty, and Michael Gollogly, Nortel’s former corporatecontroller, also face charges.
The market enforcement team of the RCMP said the three were alsoaccused of making false entries and omitting materials in Nortel’sbooks.
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 — saidit was not the target and that the charged executives were dismissedfor cause in 2004.
The accounting scandal that hit Toronto-based Nortel earlier thisdecade was one of the major hurdles it faced in its turnaround effortsafter 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 ofinvestigations.
The police said they received co-operation from the U.S. FederalBureau of Investigation, U.S. and Ontario securities regulators andNortel itself.
The investigation has been a lengthy one: the RCMP became involvedin the case as early as May 2004. In February of this year, a mediareport emerged that the charges against the former executives wereimminent.
(Reporting by Wojtek Dabrowski; editing by Rob Wilson)
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