Defence says former Nortel executives accused of fraud did nothing wrong

Lawyers for three former high-ranking Nortel executives argued Tuesday that improper accounting practices at the former technology giant were made in error, not intentional manipulations as the Crown suggests.

Lawuer David Porter, who represents Nortel’s ex-CEO Frank Dunn, says there were no “dishonest acts” by his client or the other two accused, ex-CFO Douglas Beatty and ex-controller Michael Gollogly.

All three men face two counts each of fraud for allegedly falsifying the company’s financial statements in 2002 and 2003 to trigger millions of dollars in bonuses for themselves.

Porter told the long-running fraud trial that the accounting decisions at Nortel during the time in question were done honestly and made with the information available at the time.

He argued that the accused were “transparent” and Dunn repeatedly told the accountants that “integrity was the underpinning of everything we do.”

The Crown has argued that the accused knew that accruals were being moved around to show a return to profitability when in fact the company was struggling financially so they could receive $12.8-million in cash and stock bonus payments when the company’s internal targets were seemingly met.

Porter says there is no evidence that the accused falsified or asked anyone to falsify Nortel’s accounting, conceal information from auditors or have any knowledge that what they were doing was wrong.

“In short, there is not a single instance of evidence to show fraud in this case,” he told Ontario Superior Justice Frank Marrocco.

The defence argues that auditors Deloitte and Touche were well aware of the company’s accrual policies.

Dunn, Beatty and Gollogly were fired from the company in 2004.

Nortel filed from bankruptcy in 2009. At its height, the company was one of the world leaders in telecom equipment and had more than 90,000 employees.

The closing arguments were expected to wrap up Wednesday. The trial began in January.

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