TORONTO-Nortel Networks Ltd. said it has received a federal grand jury subpoena demanding documents to help in the ongoing criminal investigations of the company’s finances and top executives.
The company said the U.S. Attorney’s Office for the Northern District of Texas is conducting the criminal investigation. The subpoena asked for documents such as financial statements, corporate, personnel and accounting records since Jan. 1, 2000.
“The company will fully cooperate with the authorities in this matter,” said Nortel.
Nortel shares dropped 5.5 percent, or 21 cents, on the news to $3.59.
The company, which has been impressing telecom operators with its technologies and equipment, overstated its losses to the tune of more than $900 million. It also set up an independent body to review its finances. The company put off the release of its quarterly earnings because of its accounting problems.
The problems have attracted a slew of regulatory actions, as well as class-action lawsuits.
The company also fired its chief executive officer, Frank Dunn, as well as other top executives, including the controller and chief financial officer, late last month. Two finance executives based in the Dallas office, James Kinney in the wireless division and Craig Johnson in the wired business, have been placed on paid leave.
