>> Nortel Networks Corp. CEO and acting CFO Frank A. Dunn no longer holding down two jobs… Yesterday giant telco promoted controller Douglas Beatty to finance chief post… Beatty will also serve as CFO of Nortel Networks Ltd., Nortel’s principal operating subsidiary…
Like his last two predecessors, Beatty is a Nortel vet: he joined Canadian telecom-equipment maker in 1985… That came on heels of six-year stint doing control and treasury jobs at a large diversified Canadian investment company…
At Nortel, moved up finance ladder… In 1995 Beatty left to become VP of finance at Sprint Canada Inc…. He rejoined Nortel in 1999 as controller… Beatty’s appointment frees up Dunn to focus on getting once-high-flying Nortel back on track…
It hasn’t exactly been honeymoon in months since former CFO Dunn took over from John Roth, Nortel’s previous CEO… As new chief executive, Dunn inherited faltering company in urgent need of turnaround… If that put a damper on promotion, Wall Street didn’t quite throw ticker-tape parade either, instead giving Dunn lukewarm reception.
Disappointed investors had hoped for Mr. Fix-it from outside to return some of Nortel’s former glory… Others were disturbed by internal hire—what, no one else wanted the job?
To add to Dunn’s challenges, his chosen successor as CFO, 21-year Nortel vet Terry Hungle,didn’t work out so well… Hungle resigned after just two months on the job after getting called on carpet by Nortel for breaking company’s 401(k) rules… According to Nortel, Hungle sold company stock just before December earnings warning… With Hungle out, guess who was back in the top finance seat? The CEO…
As for CFO Beatty: he’s an unfamiliar face on the Street, despite his long history with company… Nortel watchers remain divided in their reactions…
Some analysts and investors give appointment thumbs-down, saying struggling company needs a fresh perspective from outside… Others argue that’s the last thing Nortel needs right now… “These guys need to get their house in order—you don’t need a lot of disruption,” Duncan Stewart, a fund manager at Tera Capital Corp. in Toronto, told Reuters… “This is not the time for Nortel to be out there with some guy who can pull rabbits out of hats.”
OK. Those who can’t decide on Beatty get chance to see new CFO in action when he makes his debut Thursday during second-quarter earnings call after market close…
Meanwhile, looks like Dunn just can’t catch a break… Hours after he announced Beatty’s appointment, Nortel was slapped with a C$6 billion ($3.9 billion) class-action shareholder suit, alleging improper accounting practices to pump up revenue… According to plaintiffs, Nortel extended financing to uncreditworthy customers so they could buy product, and booking revenues from 2001 through 2003 to bolster 2000 results…
>> French media and utilities group Vivendi Universal back in news… Troubled company appointed Jacques Espinasse senior EVP and CFO, replacing Guillaume Hannezo, who had been close ally of ousted CEO Jean-Marie Messier… Since Messier was forced out weeks ago, Hannezo’s departure was considered only a matter of time……
Espinasse was COO at French satellite-TV consortium TPS… Before that, held posts at Renault, car-parts firm Sommer Allibert, publishing firm Havas, and Bernard Tapie Finance, holding company of fallen French tycoon and politician Bernard Tapie… Espinasse acknowledged to press earlier this week that he had been approached about job, and admitted it would be a “challenge,” according to Reuters… Right now, company desperately trying to avert cash crunch by negotiating new credit lines with banks…
Given state of affairs, it’s hardly surprising Vivendi picked Espinasse… He’s no stranger to cleaning up financial messes… He joined Tapie as managing director in 1996, a year after Tapie’s business went into administration… Credit Lyonnais, now in control of the business, brought Espinasse in to put Tapie’s former house in order…
Quote of the Day
“Had I thrown my hat into the ring, there would have been the inevitable horse race between candidates. I think that’s very distracting to an organization.”
—Former AT&T CFO Chuck Noski, on why he removed himself from the running as CEO Mike Armstrong’s successor.
(To read more, see “Deconstructing AT&T.”)
