The former chief executive of bankrupt Nortel Networks and two former senior executives were found not guilty on Monday of falsifying financial reports in what prosecutors said was a scheme to report profits and gain bonuses.
Ontario Superior Court Justice Frank Marrocco dismissed all charges against former chief executive Frank Dunn, chief financial officer Douglas Beatty and corporate controller Michael Gollogly. The verdicts come four years to the day after Nortel sought bankruptcy protection and began liquidating.
Each former executive faced two counts of fraud after being accused of participating in a book-cooking scheme from 2002 to 2003 designed to trigger US$12.8 million in bonuses and stocks for themselves. They were fired in 2004 and pleaded not guilty when the case went to trial last year.
Marrocco said the burden of proof was not met and said he was “not satisfied” the financials were misrepresented.
The men hugged and congratulated each other after the verdicts.
The prosecutor declined to comment as he left the courtroom, saying he needed to read the ruling.
David Porter, Dunn’s lawyer, called it a complete vindication. The defense said there was no evidence that the accused were involved in a conspiracy with countless accredited accountants from Nortel and outside auditors Deloitte & Touche.
Dunn defended Nortel’s practices.
“For a very long time, integrity has been the foundation of Nortel Networks’ corporate governance and business practices. The documentary evidence and testimony re-affirmed this core value that I witnessed over my 28 years with the company,” he said in a statement. “I am looking forward to turning the page on this chapter of my life.”
Nortel was once the world’s second-largest telecommunications gear maker. During the 1990s telecom and Internet boom, Nortel had more than 95,000 employees.
At one point in 2000, it accounted for one-third of the market value on the entire Toronto Stock Exchange and had a market capitalization of US$297 billion.
However, Nortel grew too quickly, overpaying for acquisitions with its inflated stock. The company was bleeding revenue as the dot-com bubble burst and spending on network gear vanished.
Nortel’s stock has since been delisted and is worthless. The company filed for bankruptcy in 2009 and has since sold its remaining businesses piecemeal to various buyers for more than US$7.8 billion, one of largest asset sales in Canadian history.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s