Nortel CFO Out
Nortel said in a press release that Douglas Beatty, the company's incumbent chief financial officer, and Michael Gollogly, the incumbent controller, have been placed on paid leave of absence, pending the completion of an independent review by Nortel's audit committee.
Nortel has named William Kerr as interim CFO and Mary Anne Pahapill as interim controller.
The news is likely to further rattle Nortel investors who heard last week that more auditing and restating of Nortel's earnings was at hand (see Nortel Rattles Nerves). This has also put the brakes on Nortel's stock, which more than tripled in value in 2003. In pre-market trading this morning, Nortel shares were trading down $0.37 (5.75%) at $6.06.
"The stock should really be getting smoked -- this is not a positive thing," says Kenhee Lee, principal of Q Capital Advisory Co.
Where this ends is not exactly clear. Nortel announced last October that it would be restating its results, and that has now come under review by the audit committee. Nortel announced last week that it will likely need to revise its results for certain quarters and the year ended December 31, 2003. It will also need to restate its previously filed financial results for one or more earlier periods.
In other words, it's restating the restatements.
Mr. Kerr originally joined Nortel Networks in 1994 as controller, according to the company. Before leaving Nortel in 2001, he held a number of senior positions in the company's finance organization.
Since joining Nortel in 1999, Ms. Pahapill has held a number of positions in the company's finance organization, including assistant controller and, most recently, assistant treasurer, according to Nortel's release.
Nortel said that today it will file with the Securities and Exchange Commission (SEC) Form 12b-25 Notification of Late Filing, delaying the report of its 2003 results beyond March 30, 2004.
— R. Scott Raynovich, US Editor, Light Reading