NEC warned that its American depositary receipts may be delisted from the Nasdaq Global Select Market.
Last month, the Japanese electronics giant announced that Nasdaq would allow its ADRs to remain listed if the company met an April 2 deadline for filing its financial report for the fiscal year ended March 31, 2006.
On Thursday, NEC conceded that it is unlikely to meet the deadline; if that is the case, added the company, it has requested a review by the Nasdaq Listing and Hearing Review Council.
The Japanese electronics giant has issued about $86 million worth of ADRs on Nasdaq — less than 1 percent of its $11 billion-plus market capitalization, reported Reuters. Even so, the company told the wire service, a U.S. listing is valuable for raising the company’s profile overseas.
Reuters also reported that NEC restated three times last year, and that the company recently switched to Japanese accounting rules after its auditor questioned some of its financials.
This is the first business year that many foreign companies with U.S. listings must comply with Sarbanes-Oxley, noted Reuters. The wire service added that Sony, Pioneer, and Hitachi have recently disclosed that they will delay their annual reports, citing the additional compliance efforts required under the law.