A former director of Nortel Networks called to testify in the fraud trial of three former executives of the company said Friday that the reserves adjustment Nortel had been legitimately registered financial results in early 2003 because he there was no reason to retain them.

This aspect is central in the trial because the Crown lawyers argue that the former CEO Frank Dunn and other senior leaders encouraged the inclusion of a number of provisions in the financial results to give the illusion that the company returned to profitability and thereby pocketing large bonuses. The continuation of fraudulent calls this technique.


In his testimony, the former director of planning and analytical procedures at Nortel, Brian Harrison, explained the reasoning that motivated the addition of $ 24 million to financial results.

The cons-examination of Brian Harrison supports the argument of the defense, which argues that the inclusion of funds was approved by external auditors.

The former director said that many items were included in the financial statements of the company in early 2003 because there was no reason to retain them.

Frank Dunn, former Vice President of Finance Douglas Beatty and former controller Michael Gollogly are accused of encouraging employees to use certain of Nortel’s cash reserves to manipulate the financial statements and satisfy the objectives of society, allowing them to cash and performance bonuses.

The defense lawyers argue that senior managers had no reason to falsify the accounts of Nortel in the first two quarters of 2003 since they would have boxed premiums of nearly $ 10 million even if he had to rely the figures published after two revisions of financial statements conducted for these periods.

Release Link:Nortel

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