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Nortel: Closer to the Truth?
It looks like we'll get a much better picture of Nortel's financial health in a couple months. The company said yesterday it will be able to release its 2003 and 2004 first and second-quarter numbers by the end of August, as well as updates on how much its financial statements will be affected after an independent audit committee completes its work. The question is whether/if Nortel will provide information about why CEO Frank Dunn, chief financial officer Doug Beatty and controller Michael Gollogly were fired “with cause” in April. It has become clear the audit committee – headed by ex-Royal Bank of Canada CEO John Cleghorn – had done a fair bit of work before it came to the conclusion that Dunn, Beatty and Gollogly had to be shoved out the door. If the magnitude of Nortel's accounting problems are relatively minor, it wil be interesting to see how Nortel paints its decision to clean house.