Nortel announced late Monday that it had received a letter from the Mounties, informing it of the criminal investigation. The company said it will cooperate fully. The Mounties have already been informally looking into Nortel's accounting practices, the company said.
The news of the investigation comes just days before the telecommunications equipment maker is expected to releasefor the first two quarters of 2004.
The Brampton, Ontario-based company has not yet stated financial results for this year. It has beenand plans to restate earnings for 2001, 2002 and 2003. Final figures for 2003 are expected to be filed by the end of September. The company announced two weeks ago that it would release unaudited results for the first half of 2004 on Aug. 19.
The Mounties aren't the only ones investigating Nortel. Since March, when the company announced that it would be cutting its stated 2003 profits of $732 million by half, several agencies have launched probes.
The U.S. Attorney's Office in Texas, where Nortel is headquartered in the United States, launched its ownin May. The are also investigating.
In April, the company, including President and CEO Frank Dunn.
Despite its accounting woes, Nortel is still winning deals. Last week, it announced a Bharat Sanchar Nigam, the largest telephone provider in India. The deal is expected to generate more than $500 million in sales for Nortel over the next several years. It is the first major wireless contract the company has won in India.wireless networking equipment to
But financial analysts have been cautious about the company's prospects, as uncertainty surrounding the financial scandal looms.