As scooped by Convergencialatina, investigations conducted by authorities in the US Stock Market on a possible accounting scandal are haunting Nortel Networks, main gear maker in Canada. Nortel is to reorganize results 2003, that may go down some 50%. Besides, the firm has delayed presentation of the first balance sheet of the year. It would be one of the most resounding cases of “creative accounting” among gear vendors.

In Wall Street, corporate stock reached a bottom of US$ 3.80, 30% lower. Therefore, Nortel dismissed Frank Dunn, CEO of the firm, who was replaced by William Owen. The list adds two top executives: the financial director, Douglas Beatty, and the “controller” Michael Gollogly, both suspended as from last month. William Kerr and Mary Anne Pahapill will be the substitutes, respectively.

Dunn had taken over the firm in 2001, and before he was the General Financial Director. The Executive may have prompted Nortel Networks to resume benefits for the first time since1997, after executing a cost-cut plan, that rendered plant close-downs and 60,000 layoffs.

In November 2003, Dunn announced the accounts of the gear maker between 2000 and the first half of 2003 were inflated in US$ 123 million, in addition to having hidden losses. On April 5th this year, Nortel annonced being under the eye of the Securities and Exchange Commission (SEC) of the USA given alleged irregularities in corporate accounts. On that day, Nortel stock started sliding to US$ 6.29.