Accounting & Tax

Nortel Won’t Meet Restatement Deadline

The maker of communications technology cites the volume and complexity of the work for the delay of one month or more.
Ed ZwirnSeptember 7, 2004

It’s going to take a little longer for Nortel Networks Corp. to review its books than the company had earlier announced.

Nortel, a Toronto-based technology company that has found itself the focus of criminal and regulatory probes in the United States and Canada, announced late last week that it wouldn’t be able to meet the deadline it announced just weeks ago for restatement of years of financial results.

The company, which had announced August 19 that it planned to restate all of 2003, the first half of 2004, and earlier periods “including 2002 and 2001” by the end of September, now says it will redo 2003 and first-half 2004 by the end of October and follow this “as soon as practicable, with any required amendments to periodic reports for prior periods.”

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The delay is because of the “the volume and complexity of the work involved,” according to last week’s announcement.

The August 19 announcement, in which the company released preliminary results for the first half of the year, also reported that it was cutting 3,500 jobs, or 10 percent of workforce, and cited new measures to enhance corporate governance and ethics.

The layoffs included the firing of seven finance executives. In April, the company sacked former president and chief executive officer Frank Dunn, chief financial officer Douglas Beatty, and controller Michael Gollogly.

The company said it will “demand repayment by these individuals of payments made under company bonus plans in respect of 2003, and will take further additional action with respect to these individuals, if appropriate.”

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