has named a leading statesman to its board.
The Brampton, Ont., telecom gear company Wednesday tapped John Manley, a former deputy prime minister of Canada, to join Nortel as a director. Manley's appointment comes in the wake of last week's resignation of Frank Dunn, who was fired as CEO in April amid a deepening accounting scandal.
Dunn's May 21 departure from the board was disclosed in a Tuesday afternoon filing with the
Securities and Exchange Commission
. Nortel hasn't said why he walked away from his directorship, and Dunn declined to comment.
The moves on the Nortel board come as investors wonder about the true health of the telecom equipment giant. Nortel shares doubled early in the year on hopes of a broad telecom-industry spending recovery, but they have since given back their gains amid a series of restatements and government bookkeeping inquiries. The stock was flat Wednesday at $3.53.
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 the investigations.
"Nortel Networks is a great company, a technology engine in Canada and one that has been successful around the world," said Manley. "I am confident in Nortel Networks' future and I am pleased to be joining the board of directors. I look forward to being part of the team as we work through the company's immediate challenges and build on Nortel Networks' success as a leading provider of communications networking solutions."