Canada report

Nortel fires top executives over financial investigation

Nortel Networks, once one of Canada's most prestigious companies, has fired its three top executives over financial irregularities.

An investigation forced the country's largest technology company to restate several years of financial results.

Besides firing CEO Frank Dunn, financial chief Douglas Beatty and controller Michael Gollogly, Nortel will slash its reported 2003 earnings in half. Four unidentified senior financial executives were put on paid leave.

Nortel's finances are being investigated by U.S. and Canadian securities regulators while police have made inquiries.

"This company is fundamentally strong," said new CEO William Owens, a former U.S. admiral who was vice chairman of the U.S. Joint Chiefs of Staff and a Nortel director.

In making the sweeping changes, Nortel is trying to assure investors it will recover some of the luster it had as Canada's richest company.

The news caused investors to sell off shares, pushing the stock down to $5.33 from about $12 and cutting Nortel's market value by more than $8-billion.

The Brampton, Ontario, company was battered by the collapse of the telecom industry in 2001.

Auditor General Sheila Fraser is standing by her claims the Liberal government ignored its contracting rules in the sponsorship scandal.

Much of the controversy over Fraser's critical report has centered on a finding that $100-million of the $250-million spent went to Liberal-friendly ad agencies from 1997 to 2001.

In a report to a Commons committee investigating the alleged misspending, Fraser said her audit indicates widespread noncompliance with contracting rules.

"Documentation was poor and there was little evidence of analysis to support the expenditure of more than $250-million," she said.

- Canada has claimed a significant victory in the softwood lumber war with the United States. A North America Free Trade Agreement panel found U.S. lumber producers face no serious injury from Canada's $10-billion in annual softwood exports. The United States has levied duties averaging 27 percent on Canadian lumber, costing the industry thousands of jobs and $2-billion in penalties.

- Robert Macdonald, a University of Waterloo engineering professor who was shot in the head during a street robbery in Trinidad, died in a Kitchener, Ontario, hospital. Macdonald, who was 43, had been on life support and was returned to Canada on Wednesday. He was with a group of Canadians robbed by three men while they walked to their hotel in Port-of-Spain.

- Ontario wants the federal government to boost screening at airports as the number of potential SARS cases in China rises. Health Minister George Smitherman said, however, he doesn't believe it's necessary to close the border to Chinese visitors. SARS killed 44 Toronto-area residents last year.

- Newfoundland's 20,000 public service workers, on strike for 27 days, returned to their jobs as the provincial government moved ahead with enacting a back-to-work bill.

Canada's dollar was lower Friday as reports indicated the economy continues to stall. It traded at 72.81 U.S. cents, while the U.S. dollar returned $1.3734 Canadian before bank exchange fees.

The Bank of Canada key interest rate is unchanged at 2 percent, while the prime lending rate is 3.75 percent.

Stock markets are lower, with Toronto's composite index at 8,296 points and the Canadian Venture Exchange at 1,646 points Friday.

Lotto 6-49: (Wednesday) 16, 30, 36, 39, 45 and 47; bonus 22. (April 24) 4, 6, 15, 22, 23 and 27; bonus 25.

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