Posts Tagged ‘Nortel’

I used to work for these guys

November 12, 2008

Hmm.. $3.4 billion loss in 3rd qtr. Didn’t know Nortel made cars.

At least one analyst quoted in the article is positively gloomy on NT’s future:

The cost cuts notwithstanding, Nortel’s balance sheet and its business setbacks make the company attractive only to investors who betting that it will be broken up or sold, said Duncan Stewart, president of Duncan Stewart Asset Management in Toronto.

“It only exists as a possible speculative break-up value play,” he said. “As Nortel exists today, it cannot become a successful global leader in the telecom equipment industry.”

The good news so far is, analysts had been expecting 4 – 5,000 jobs to be cut. So far, about 1,300 will be let go.

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Mounties got their (Nortel) men

June 20, 2008

Former Nortel CEO Frank Dunn and other former Nortel execs were arrested by the Royal Canadian Mounted Police (or if you prefer the Gendarmerie Royale du Canada) for lying about corporate results back in 2002 and 2003. As you may or may not recall, Nortel stock hit a low of around 40 cents a share around 2001, 2002 and rebounded to like $8-10 a share on excellent earning news, that turns out to have been, untruthful.

I can imagine the redcoated and Sam Browne belted mounties with chiseled appearances showing up at the respective mansions of the ex-execs to escort them into custody. I would assume that the traditional address is for parade and such, the arresting officers probably just had business suits on.

Full disclosure: I used to work for Nortel for like 3 years, but as a contractor or consultant. I saw the meltdown up close and personally in 2000 – 2001. I’m not bitter about Nortel, I’ve been thrown out of classier joints than that before. I know a lot of people who were (are) though.

Nortel was the darling of O Canada before 2001. It had the largest stock evaluation of any Canadian company, and was the New Economy/DotCom/HighTech face of Canada. So it’s come to this, a perp walk.

From the RCMP website, the details:

(TORONTO, ON – June 19, 2008) – The Royal Canadian Mounted Police Greater Toronto Area Integrated Market Enforcement Team (RCMP GTA IMET) has charged:

Frank Dunn, age 54 of Oakville, Ontario, former CEO of Nortel;
Two count under Section 380(1)(a) of the Criminal Code of Canada;
Two counts under Section 397(1) of the Criminal Code of Canada; and
Three counts under Section 400(1) of the Criminal Code of Canada.

Douglas Beatty, age 53 of Toronto, Ontario, former CFO of Nortel;
Two count under Section 380(1)(a) of the Criminal Code of Canada;
Two counts under Section 397(1) of the Criminal Code of Canada; and
Three counts under Section 400(1) of the Criminal Code of Canada.

Michael Gollogly, age 49 of Oakville, Ontario, former Corporate Controller of Nortel;
Two count under Section 380(1)(a) of the Criminal Code of Canada;
Two counts under Section 397(1) of the Criminal Code of Canada; and
Three counts under Section 400(1) of the Criminal Code of Canada.

The fraud-related charges include: Fraud Affecting Public Market, Falsification of books and documents and False Prospectus. These charges pertain to allegations of criminal activity within Nortel Networks during 2002 and 2003. National IMET Program Leader C/Supt. Stephen White says, “Protecting and enhancing Canada’s economic integrity is one of the RCMP’s strategic priorities. This investigation demonstrates that although capital market investigations can be lengthy and complex, they are most effective when an integrated approach is used from the outset. We remain committed to working with our many partners nationally and internationally to prevent, detect and investigate serious capital markets fraud.”
_____________________________
Section 380(1)(a) of the Criminal Code of Canada;
Fraud Affecting public market

Section 397(1) of the Criminal Code of Canada; and
Falsification of books and documents

Section 400(1) of the Criminal Code of Canada.
False Prospectus

Pertaining to the Section 380 charge RCMP IMET allege that Dunn, Beatty and Gollogly fraudulently misstated the financial results of Nortel. The RCMP IMET further alleges in regards to the Section 397 charges that Dunn, Beatty and Gollogly made false entries and omitted materials particular in the books and documents in regards to the financial results of Nortel. The Section 400 charges allege that Dunn, Beatty and Gollogly circulated or published a statement or an account whether or not it was written or oral, knowing that it was false in a material particular, with the intent to deceive or defraud the members, shareholders or creditors of Nortel Networks Corporation. All of the charges pertain to the fiscal time period between January 1, 2002 and June 30, 2003, and allege that the financial statements of Nortel during this time period were misstated. This fiscal time period represents the fiscal year of 2002 and the First Quarter and Second Quarter of 2003.