TORONTO, D.C., Jan. 12 (UPI) -- Former Nortel executives allegedly used inappropriate accounting methods to trigger large bonuses for management, the Financial Times reported Wednesday.
Nortel blamed the former chief executive officer, Frank Dunn, and nine other former financial executives for the Canadian telecom company's incorrect accounts, after the release of its delayed 2003 restatement of earnings on Tuesday.
Nortel CEO and President Bill Owens demanded that the fired executives repay their bonuses, or face a potential lawsuit.
Although the results of the 2003 and 2004 audit were delayed, in the 2003 report, Nortel included a brief review noting that Dunn had set internal earnings targets for late 2002 and early 2003.
The initial report indicated that senior management "conveyed the strong leadership message that earnings targets could be met through application of accounting practices that finance managers knew or ought to have known were not in compliance with U.S. (accounting principles) and that questioning these practices was not acceptable."
Nortel's restatement of their 2003 results showed a smaller profit of $434 million on revenue of $10.19 billion, unlike their initial 2003 results which reported a $732 million profit on revenue of $9.81 billion.
