Nortel Networks on Monday named Mike Zafirovski, a former Motorola executive, to take over as chief executive from Bill Owens who worked to restore the Canadian telecoms equipment manufacturer’s credibility following an accounting scandal.

Mr Zafirovski, who helped turn round Motorola’s mobile phone unit, was passed over for the group chief executive’s job and left in January.

At Nortel his biggest challenge will be reviving equipment sales to telephone service providers following the telecoms crash and an accounting scandal at the Ontario-based company that dated back to 1999.

“Bill re-established stability within Nortel and credibility with all its stakeholders,” said Harry Pearce, Nortel ’s chairman. “Mike can now build for the future on the strong foundation Bill Owens has given us.”

Mr Zafirovski will take over as president and chief executive in mid-November, when Mr Owens, a retired admiral and former vice- chairman of the US Joint Chiefs of Staff, steps down.

Mr Owens, aged 65, was named chief executive 18 months ago after Nortel revealed that it had misreported results for five years and ousted 10 executives including Frank Dunn, a former chief executive. While analysts credit Mr Owens with helping to stabilise Nortel, the company, they say more needs to be done to restore customer and investor confidence in a company known for its engineering prowess.

Mr Zafirovski joined Motorola in June 2000 from General Electric where he ran the lighting division.

He ran Motorola’s mobile phone business until being promoted to group president and chief operating officer in July 2002. He was the only internal candidate in 2003 for the chief executive’s job that eventually went to Ed Zander, a former Sun Microsystems senior executive.

Under Mr Owens, Nortel completed a full review of its accounts and established new accounting procedures.

More recently Mr Owens had begun to refocus Nortel on growth opportunities but his efforts to rebuild the management team faltered in June, when two senior executives, Gary Daichendt, president, and Gary Kunis, chief technology officer, left.

Nortel is seeking to win back business lost over the past few years to rivals including Alcatel, of France, Siemens and Lucent, over the past few years, and there are signs the strategy is working. Second-quarter profit almost tripled as demand from wireless carriers soared, and the company said sales this year would exceed analysts’ estimates.

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