Critical Path Puts Two Execs on Leave; To Probe Accounting Practices

The road was rocky for Critical Path (CPTH Quote) this morning. Its shares plummeted in pre-open trading on news it is investigating its revenue-recognition practices and has put two executives on "administrative leave."

Trading in the firm's shares was halted when the Nasdaq opened Friday morning. Before the open, the shares lost more than half their value in Island trading, sliding $5.94, or 59%, to $4.13, from their Thursday close of $10.06 on the Nasdaq.

The San Francisco-based Internet messaging software provider says it has formed a special investigation committee to determine whether its fourth-quarter results -- a net loss of $11.5 million, excluding special charges, on revenue of $52 million -- may have been ``materially misstated.'' Critical Path also said in its brief statement it "discovered a number of transactions" that put the financial results in a questionable light.

The company has put David Thatcher, its president, and William Rinehart, the vice president of worldwide sales, on administrative leave. It did not provide any other details.