Nortel Networks, under investigation for accounting problems, said on Wednesday it had fired its three top executives as both U.S. and Canadian securities regulators probe the leading telecom equipment maker.
Nortel, based in Brampton, Ontario, said it expected a 50 percent reduction in 2003 net earnings as it restates results and added that its first-quarter 2004 results would be delayed. But losses for previous years would be revised down.
The company said chief executive Frank Dunn had been "terminated for cause" and would be replaced by William Owens, a director of Nortel since February 2002.
Nortel shares dropped $1.50, or 27 percent, to $4.14 in on the Instinet electronic brokerage system before the market opened. The shares closed at $5.64 in New York on Tuesday.
Nortel named William Kerr as chief financial officer and MaryAnne Pahapill as controller.
Former chief financial officer Douglas Beatty and former controller Michael Gollogly, both of whom had been placed on paid leave of absence by Nortel on March 15, 2004, have also been terminated for cause, the company said.
Nortel is under investigation by the U.S. Securities and Exchange Commission and by the Ontario Securities Commission, Canada's top securities regulator, after a restatement of earnings last year and a warning in March that a second restatement would likely be needed.
Nortel's accounting woes began in October when it warned it would restate financial data going back to 2000.
Investors initially viewed the restatement as a housekeeping exercise. But they were shocked when Nortel warned on March 10 that it would likely restate results for the second time and delay filing key documents with U.S. regulators.
The company had been due to report first-quarter results on Thursday.