NORTEL Networks, the Canadian telecoms equipment maker, yesterday placed its finance director on leave after admitting that it would have to restate last year’s results for a second time.

The company’s shares tumbled 15 per cent in lunchtime trading as the technology giant said that Douglas Beatty, the chief financial officer, had been “placed on paid leave of absence” pending an audit commitee review.

Mr Beatty’s suspension comes less than a week after Nortel said it would delay filing its annual report because it was reviewing the “circumstances leading to the restatement” of results announced last October.

As a result, Nortel had concluded that it would have to examine its 2003 results for a second time and restate results “for one or more earlier period”. The company asked its audit committee to investigate.

That inquiry has now led to the suspension of Mr Beatty, who has been the company’s chief financial officer since July 2002. Also suspended yesterday was Michael Gollogly, the financial controller.

It is not clear how great the sums of money are involved, and analysts were yesterday divided on whether it was still worth hanging on to the company’s stock.

The previous restatement, announced in October and detailed in December last year, covered three and a half years, including the first part of 2003, but the sums involved were relatively insignificant. Investors then believed that the matter was essentially closed.

Nortel had been recovering from the severe downturn in telecoms equipment spending. Last year, the company returned to profitability, with profits of $732 million (£405 million), after a disastrous 2001 and 2002. Frank Dunn, chief executive, described 2003 as a “turning point” — an analysis accepted by most commentators.

So far, the chief executive has been relatively immune from criticism, although he was the company’s finance director before getting the top job in November 2001.

Over the weekend, Mr Dunn was facing criticism in his native Canada for being too fastidious in the face of possible criticism from the US regulator, the Securities and Exchange Commission. Nortel’s stock is traded in both Toronto and New York, which brings it under the SEC’s orbit.

Nortel is one of the world’s leading telecoms equipment makers. Even after the share fall, the company, a world leader in fixed-line network technology, is worth $23 billion.

The company has appointed an interim chief financial officer, William Kerr, a former employee, and an acting controlling, MaryAnee Pahapill, who was previously the group’s assistant treasurer.

In New York, the shares closed down $1.19 at $5.24.