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A man walks past a company sign at a Nortel Networks office tower in Toronto in this 2009 file photo.

NATHAN DENETTE/THE CANADIAN PRESS

The Crown will not appeal a January court ruling that found three former Nortel Networks Corp. executives not guilty of fraud.

An official from the Ontario Attorney-General's Ministry said the Crown has determined it does not have grounds to appeal the acquittals of former Nortel chief executive officer Frank Dunn, former chief financial officer Douglas Beatty and former controller Michael Gollogly.

"The Crown's right of appeal from an acquittal is very limited and must be based on a question of law alone that might have impacted upon the verdict," spokesman Brendan Crawley said Tuesday. "In this matter, the Crown has determined that there is no basis for an appeal."

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Justice Frank Marrocco of the Ontario Superior Court found the three men not guilty on Jan. 15 after a long trial, ruling the accounting manipulations that caused the company to restate its earnings for 2002 and 2003 did not cross the line into criminal behaviour.

He said Nortel had a 20-year history of setting up inflated accounting reserves to help meet earnings targets, but ruled the decisions that formed the basis of the Crown's case were either not fraudulent or were not material for a company the size of Nortel.

The three men were accused of manipulating Nortel's financial results in 2002 and 2003 to push the company to profitability and trigger bonuses for themselves worth over $12-million in total.

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Real Estate Reporter

Janet McFarland is the real estate reporter for The Globe and Mail’s Report on Business, with a focus on residential real estate trends. She joined Report on Business in 1995, and has specialized in reporting on corporate governance, executive compensation, pension policy, business law, securities regulation and enforcement of white-collar crime. More

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