Nortel Networks Corp., the telephone equipment manufacturer whose accounting is being investigated by U.S. and Canadian , said federal prosecutors in Texas have demanded company documents as part of a criminal investigation.

A federal grand jury wants financial statements and corporate, personnel and accounting records dating back to Jan. 1, 2000, the Brampton, Ontario-based company said in a writen statement. Nortel, North America's largest maker of phone equipment, has 4,300 workers in Richardson, Texas.

The U.S. Securities and Exchange Commission started investigating Nortel after the company in March said it was reviewing certain accruals and provisions and might have to revise results that had been restated in November.

Nortel last month fired chief executive Frank Dunn and two of his top deputies and said the second restatement might cut 2003 profit in half. The company put four of the finance chiefs at its main divisions on paid leaves of absence. James Kinney of the Wireless Networks division and Craig Johnson of the Wireline Networks unit worked out of Nortel's office in Richardson, Tex.

Nortel said it plans to cooperate with authorities. Company spokeswoman Tina Warren declined to elaborate.

"We cannot confirm or deny the existence of an investigation," said Kathleen Colvin, a spokeswoman for the U.S. attorney's office in Dallas.

Nortel has said that it is reviewing executive bonuses based on last year's return to profitability. The company has declined to say how much it paid, and who received the bonuses. Nortel is facing at least nine class-action lawsuits.

A criminal investigation "can strengthen the class actions against the company," said Thomas Caldwell, chairman of Caldwell Securities Ltd. in Toronto, which holds Nortel shares. "These people have to get this mess cleaned up."

Nortel shares closed 23 cents lower at $3.57 yesterday on the New York Stock Exchange. They have declined 16 percent this year.