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Accounts still in a mess

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Nortel does not have its accounts ready and doesn't know when they will be ready. The company is still reviewing the books for 2003 and is unlikely to have a better idea what is going when its second quarter results are due in late July. At the end of April it was only able to provide a cash balance.

The networking company overstated costs for 2001 and 2002 which meant that profits for 2003 were overly high. It expects the final figure to be about half the profit it originally claimed. The problem is made worse because Nortel paid bonuses to certain executives based on figures which now appear to be wrong.

The problems have attracted investigators from the US Attorney's office in Dallas, the US Securities and Exchange Commission and the Royal Canadian Mounted Police. It is also facing angry shareholders - 28 class action suits have been filed against the company. ®

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