will have to undertake its latest recovery without Frank Dunn's help.
The former turnaround CEO left the company's board Friday, according to a regulatory filing Tuesday. No reason was given for the move, which comes a month after Dunn and two other execs were fired for cause amid a storm of restatements at the Brampton, Ontario, telecom-equipment shop.
Dunn's belated departure came as a surprise to observers who assumed the executive had left the board when he was removed from the executive suite. Some telecom watchers said board changes often take place at prescribed times during the year, and that scheduling may explain why Dunn lingered for a month after being fired.
Reached at home, Dunn declined to comment. Nortel didn't immediately return a call seeking comment.
terminated in April as bookkeeping worries piled up at Nortel. His departure from the board was noted in a terse filing with the
Securities and Exchange Commission
"On May 21, 2004, each of Nortel Networks Corporation (the "Company") and Nortel Networks Limited (the principal direct operating subsidiary of the Company) received the resignation of Frank Andrew Dunn as a director of each respective company, effective May 21, 2004," Nortel's 8-K filing with the SEC read in part.
Citing issues with the timing of past revenue recognition, Nortel has repeatedly restated earnings over the last year. The company said in October that it would have to fix the timing of some $900 million in liabilities, accruals and provisions. In March, the company put its top financial officers on leave as it commissioned an inquiry into its bookkeeping. Last month, Nortel announced a restatement that will cut 2003 earnings in half. The company also fired Dunn and two other top execs as the inquiry moved forward.
The Justice Department, the SEC and the Ontario Securities Commission all are investigating potential accounting irregularities at Nortel. The company has said it is cooperating with all of the investigations.
Dunn was named Nortel's CFO in 1999 and later took the CEO job in 2002. Dunn helped Nortel's turnaround at the start of 2003 by claiming the company's restructuring was complete and that it would return to the black by the middle of that year.
Analysts and industry watchers say controversial
return-to-profit bonuses may have played a role in the questionable accounting that took place on Dunn's watch and the company's sudden banishing of red ink early last year. The company's splash into the black happened just as Nortel execs stood to collect an estimated $50 million in bonuses.
The spring's deepening accounting scandal dispelled investors' early-year optimism about a rebound at the long-suffering company. Nortel shares doubled to $8 in early 2004 as Wall Street speculated the company would benefit from a spending revival among big telco customers. But the stock has since given back all those gains as observers wonder about the company's true health.
On Tuesday, Nortel rose a nickel to $3.53.