Nortel has fired its president and chief executive officer (CEO), replacing Frank Dunn with William Owens, and delayed the release of its financial results for the first quarter of the year.

Nortel has been involved in an ongoing independent review of the circumstances leading to the reissuing of its financial statements for 2000, 2001 and 2002 and for the first and second quarters of 2003, the company said in a statement. As a result of those investigations, Dunn was "terminated for cause", Nortel said. Former CEO, Douglas Beatty, and former controller, Michael Gollogly, have also been terminated.

"Yesterday was a very long day for the board and its advisors," said Lynton Wilson, chairman of the board in a telephone conference call with media and analysts. "These actions are an important step in the process of restoring confidence in the company's leadership and financial reporting."

The telecommunications equipment maker is currently the subject of investigations by both the US Securities and Exchange Commission and by Canada's top securities regulator, the Ontario Securities Commission. "We are cooperating with all of the regulation authorities and we will continue to do so," Wilson said. "This is about the accountability for financial reporting. The investigations are ongoing and it would be inappropriate to comment further."

In March, Nortel placed its chief financial officer and its controller on paid leaves of absence due to questions over the company's 2003 financial results. At the time, the company appointed William Kerr as CFO and MaryAnne Pahapill as controller on an interim basis. Today, Nortel made those appointments permanent.

Owens, who has been serving as a director on Nortel's board since February 2002, was until this appointment, the chairman and CEO of the satellite communications company Teledesic.

With the company since August 1999, Owens had been Teledesic's CEO since June 2003. Owens' resume also includes stints as the president, COO and vice chairman of Science Applications International, as well as a military career that included serving as vice chairman of the US Joint Chiefs of Staff and as the Commander of the US Sixth Fleet during Operation Desert Storm. Owens "brings very strong leadership qualities to bring the company forward," Wilson said. No kidding.

Owens was quick to try and reassure Nortel's customers and shareholders. "To our customers I say: We will not let this distract us," Owens said. "To our shareholders: We're committed to getting this right."

Problems with its accounting practices came to light in October when Nortel announced it would restate the last three years' financial results as part of an ongoing review of its assets and liabilities. Then on 10 March, it said its would likely restate results for the second time and delay filing required financial documents with US regulators.

On Wednesday, Kerr said that as part of its restated results it expects a 50 percent reduction in 2003 net earnings, though losses in previous years will be revised down. "It's fair to say that all areas will be affected," Kerr said.