Shares in Nortel Networks slipped into a tailspin Monday after the telecom equipment giant announced it had put its chief financial officer and its controller on paid leaves of absence.

Nortel's stock price fell more than 18 per cent, falling to $6.98 as thousands of investors dumped 99 million shares.

The Ottawa-based telecommunications company announced the executive suspensions after acknowledging that accounting errors were made in its latest financial statements.

CFO Douglas Beatty and controller Michael Gollogly are being sidelined "pending completion of the independent review" by the Nortel Networks audit committee, the company said in a statement Monday.

The review will examine what led to the company's restatement of 3½ years of financial results late last year.

Effective immediately, William Kerr is temporarily taking over as Nortel CFO, while MaryAnne Pahapill will fill the role of interim controller.

The telecommunications equipment maker also said Monday that it will miss the March 30 deadline for filing its official 2003 financial results.

And it confirmed it has received inquiries from both the U.S. Securities and Exchange Commission, and Ontario's Securities Commission.

The announcements prompted J.P. Morgan to downgrade Nortel shares to neutral, saying Monday's announcement "is an indication that accounting problems could be more serious than we had thought."

But another analyst, speaking on condition of anonymity, told CTV News that the review likely won't stir up any scandal.

"The likelihood of fraud at Nortel is very, very low. I trust these guys. It looks like incompetence," he said, though added: "The whole thing is unusual. There's an absence of information."

Last Wednesday, Nortel said it was delaying filing its annual report with the U.S. Securities and Exchange Commission because a review of its unaudited results may demand a restatement of the profit figures for 2003.

The company had reported a profit of more than $700 million. It was the first year in six the bellwether company posted a full-year profit.

One of Canada's first major technology enterprises to rebound from the bursting of the so-called "dotcom bubble," the company has yet to escape its troubles. Word of the revision last week was the second such announcement by the company in six months.

"The challenges that faced Nortel Networks and our industry over the past few years were unprecedented," Nortel CEO Frank Dunn said in October, 2003. "It is clear now that in such a volatile environment, errors were made."

Dunn's comments got the ball rolling in Nortel's internal audit committee. Last week, the committee asked Nortel to delay releasing its final 2003 results.

When the company went public with doubts about the veracity of its latest financial statements last week, Nortel stock fell into a tailspin. It had largely recovered by the end of the week, but lost those gains Monday.