NEW YORK ( TheStreet) -- Duoyuan Printing (DYP), a Chinese reverse-merger company under investigation by the Securities and Exchange Commission for fraud, said the New York Stock Exchange has decided to delist its stock as of April 4.
Duoyuan said it has appealed that decision with the NYSE's board of directors of regulation. Before the Big Board can remove the stock, the exchange must apply to the SEC -- a procedure that, among other things, depends on the outcome of any appeal by the company.
Still, Duoyuan said, "no timetable has been established as to when the Committee of NYSE Regulation would be able to hear such an appeal." If the stock is removed from the exchange, it will trade on the over-the-counter bulletin board, the company said.
Duoyuan, a small manufacturer of printing equipment, has failed to file a financial report with the SEC since May 2010. The company fired its auditor, Deloitte, in September, after the firm raised red flags about the company's accounting. The move appeared to prompt
the SEC's formal investigation
last October, which Duoyuan disclosed only on March 18. (The agency is conducting a broader investigation into Chinese small-cap stocks, particularly those that came public in the U.S. through reverse mergers, a controversial process sometimes called a reverse takeover, or RTO.)
Duoyuan still doesn't have an auditor.
Duoyuan had until April 13 to file the delinquent reports under NYSE rules. That constituted the initial six-month window the exchange offers to late-filing companies. Under normal circumstances, Duoyuan would have the possibility of filing for an extension.
But because the company still hasn't hired an audit firm, and because of the "various disclosures" made by Duoyuan on March 18 -- including, presumably, the SEC probe -- the NYSE decided that the company's common stock "is no longer suitable for continued listing on the NYSE and that any additional trading period is not appropriate," the exchange said in a press release.
In its own press release, the company included remarks by Everett Chui, its "Audit Committee Financial Expert." He said the company's own internal investigation into the red flags raised by Deloitte "has made substantial progress. We anticipate its completion at the end of April 2011, at which point we plan to engage an auditor to allow us to complete our SEC filings and fulfill the listing standards of the NYSE." Chui, a Hong Kong accountant, was hired by Duoyuan to oversee the internal investigation.