FORMER NORTEL EXECUTIVES have been found not guilty of inflating the firm's financial performance in order to take home large bonuses.
Nortel's former CEO Frank Dunn and two other executives were accused of inflating the firm's accounts in order to qualify for large bonuses. Today the Ontario Superior Court found the three executives not guilty of all charges after a year-long trial.
Dunn, along with former CFO Douglas Beatty and former controller Michael Gollogly, were cleared of misrepresenting accounts during 2000 and 2004. According to Crown prosecutors, the trio allegedly created a loss in one quarter and then artificially engineered profits in three consecutive quarters in order to trigger bonus payments.
Nortel was once a darling of the telecoms industry with its networking equipment powering the dotcom boom in the late 1990s. However like many firms around that time, it's apparent market worth fell sharply as reality set in, with the firm's accounting being called into question as executives took home large bonuses.
Justice Frank Marrocco said in his ruling, "The accused are presumed innocent. The burden is on the prosecution. It was entirely appropriate that we go through this process to find out what happened. The burden, in my view, is not met. The charges are dismissed."
Nortel's collapse was one of Canada's biggest corporate failures. At one point the firm accounted for a third of the total value of the Canadian stock exchange, yet it saw its stock price fall by 99 percent and its financial results restated several times. µ