Nortel Names New CEO, Other Top Execs

Owens replaces Frank Dunn, who was "terminated for cause," according to a company statement. Kerr and Pahapill were appointed to those posts on an interim basis in March after Nortel placed CFO Douglas Beatty and Controller Michael Gollogly on paid leave of absence. Beatty and Gollogly also were terminated for cause, the company said.

The Brampton, Ontario-based telecommunications company also said it will delay the release of its first-quarter financial results and restate financial results reported in each of its 2003 quarterly periods and for earlier periods, including 2002 and 2001.

Nortel made the personnel changes amid ongoing investigations of the company's finances by U.S. and Canadian regulators. In addition, Nortel said four other senior finance executives have been placed on paid leave of absence pending further progress of an independent review.

Both the U.S. Securities and Exchange Commission and the Ontario Securities Commission launched investigations after Nortel restated earnings last year.

Throughout Nortel's financial turmoil, customers have expressed some concern but haven't delayed purchases because of it, according to solution providers.

"We've had a few inquiries, but I don't think anybody views Nortel as a risk or as not solvent," said Tony Parella, president and COO of Shared Technologies, a Dallas-based solution provider.

As the financial saga plays out, technology and price remain the factors driving sales at the street level, said Rob Finucan, president of Ottawa-based solution provider Combat Networks. "I haven't talked to any customers that have any doubts that Nortel is still going to be around," Finucan said.

Nortel's audit committee has been reviewing the company's past financial results since last fall. Though the committee hasn't yet determined the full extent of the required adjustments to Nortel's financial results, it has estimated that the company will need to reduce previously announced earnings for 2003 by about 50 percent.

"The board of directors believes that the actions announced today are about accountability for our financial reporting and are in the best interest of the company and all of its stakeholders, including our investors, customers and employees," Nortel Chairman Lynton "Red" Wilson said in a statement.

Shares of Nortel fell more than 28 percent Wednesday morning, down $1.61 to $4.03, following the announcement.