In Canada, the shadow of Nortel is large and, seemingly, persistent.
The fallen Ottawa tech giant, which once represented 36% of the total value of the Toronto Stock Exchange and employed 90,000 people, is back in the news.
Former Nortel chief financial officer Douglas Beatty, former controller Michael Gollogly and former CEO Frank Dunn face seven charges, including two charges of Fraud over $5,000, three charges of falsifying public statements, and another charge of omitting key financial information from a financial record.
The trio were actually arrested in June 19, 2008 by the RCMP after the US Securities and Exchange Commission filed civil fraud charges against them and a fourth defendant, MaryAnne E. Pahapill.
The seemingly endless downward spiral of Nortel actually began more than a decade ago. On October 25, 2000, then CEO John Roth warned, for the first time, that the company would not meet its sales targets. The stock fell from $96 to $71 that day. By 2002, half of the company’s 90,000 workers had been laid off. And then it got worse. Debt downgrades, missed reporting deadlines and financial restatements killed a meager rally in the stock. Nortel declared bankruptcy on January 14, 2009.
What is Nortel’s legacy? Can any good be salvaged from the ruins of what was perhaps the most widely held stock in Canadian history? On Monday, Cantech Letter’s Nick Waddell talked to BNN’s Michael Hainsworth about Canadian tech in a post-Nortel world.