Nortel board could see shake-up-report
Wed Sep 29, 2004 08:37 AM ET
TORONTO, Sept 29 (Reuters) - The board of directors at Nortel Networks Corp.(NT.TO: Quote, Profile, Research) could see a major overhaul as it faces internal squabbling and pressure from the company's biggest shareholders, a newspaper reported on Wednesday.
The National Post, citing sources, said that some of the telecommunications equipment maker's 11 current directors are not expected to seek reappointment at the company's annual meeting.
A date for the meeting cannot be set until Nortel, fighting to emerge from an accounting scandal, files its audited 2003 results.
The company, reviewing its books to fix accounting irregularities, is preparing to restate results stretching from 2001 to 2003. Final 2003 results and full numbers for the first half of 2004 are expected before the end of October.
Chairman Lynton Wilson, who has been on the board since 1991, could be one of the members departing, the sources said.
"A good part of the existing board has been there for quite a while and has presided over a whole series of very poor business decisions that have left Nortel a very weak company. We made it very clear the shareholders would be very disappointed if they put forward the same slate," a large institutional shareholder told the Post.
The Canadian Coalition for Good Governance -- which represents major Canadian institutional shareholders promoting best corporate governance practices -- met recently with Wilson and John Cleghorn, chairman of Nortel's audit committee, to request changes to the board, the newspaper said.
Nortel spokeswoman Tina Warren confirmed that Wilson and Cleghorn met with the coalition and "there were discussion regarding board renewal."
She added, "at no time during the meeting with the coalition was the subject of Mr. Wilson leaving the board raised by the coalition or discussed."
It was during that meeting that Wilson and Cleghorn were warned that "Nortel is at a high risk of disappearing. They realize the state of affairs and they realize that changes are needed for the company to have a chance of moving forward. Changes have to come and everybody knows that," a source said.
Brampton, Ontario-based Nortel is set to provide a bi-weekly update as required by regulators on Thursday.
($1=$1.27 Canadian)
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Data as of 29 Sep 2004 08:47 ET. Delayed at least 15 to 20 minutes.
Symb Company Last Chg Chg %
NT.N NORTEL NETWORKS 3.29 0.00 0.00
NT.TO NORTEL NETWORKS 4.19 0.00 0.00
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq and all other quotes delayed by at least 15 minutes.
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