Marvell Tech Delisting Looms

The company says it must meet listing requirements by June 28.
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Marvell Technology (MRVL) - Get Report has less than three months to file its delayed financial reports with regulators or lose its listing on the Nasdaq.

The chipmaker, which has not filed financial results for the past three quarters, acknowledged what appears to be a hard deadline of June 28 in a filing with the

Securities and Exchange Commission

late Monday.

The company also noted that it has appointed two outsiders to head up a special committee of its board tasked with defending the company from shareholder lawsuits involving allegations of stock option backdating.

Marvell, like many tech companies, is embroiled in an accounting controversy involving the backdating of employee stock options. Marvell said in October that it had reached a preliminary conclusion that the actual measurement dates of certain past stock options differ from the recorded grant dates and that financial statements since the company's 2000 initial public offering should no longer be relied upon.

As the company figures out the amount of financial restatements it will make, it has delayed filing its periodic reports for the second quarter and third quarter of calendar 2006. On Monday, Marvell said it would not be able to file its annual report for 2006 on time.

Under Nasdaq regulations, any delay in filing quarterly financial reports automatically triggers the delisting process.

A special Nasdaq panel gave Marvell until March 7 to file its delinquent reports. Marvell appealed the decision to the Nasdaq Listing and Hearing Review Council. The listing council stayed any action to delist the stock as it considers the case, and it imposed a March 30 deadline for Marvell to submit materials.

But Marvell's filing with the SEC Monday noted that there appears to be no more grace periods left for the company to get its act together.

"Even if the Listing Council decides to continue its stay of the Panel's determination and our shares continue to be listed, we will still have to file our delayed Forms 10-Q and 10-K and otherwise meet NASDAQ's listing requirements by June 28, 2007 or face delisting," Marvell said."The Listing Council could also choose to require us to regain compliance by a date earlier than June 28, but it cannot extend the June 28 deadline."

A press release issued by Marvell concurrently with the SEC filing Monday said the company's shares would remain listed until the Nasdaq Listing Council reaches a decision, but it made no mention of the June 28 deadline.

Representatives from the Nasdaq and Marvell were not immediately available for comment.

Marvel said in the filing that a delisting could cause the company's stock price to decline and make the market for its stock less liquid, as well as make it more difficult or more expensive for the company to raise capital.

Shares of Marvell were unchanged in extended trading at $16.68.