NetEase hearing to be held
( 2001-07-27 10:48) (1)
The Nasdaq-listed Chinese portal NetEase.com might not be delisted from the US stock market Friday, but the consequences of its close call will have a profound impact on the whole Internet industry.
"It is quite certain that my company will not be delisted on Saturday, as we have submitted an appeal to Nasdaq for a hearing on the delay of NetEase's annual report," said an executive Thursday.
NetEase announced on Monday that it received a notice from Nasdaq that it intended to delist the company's American depositary receipts at the opening of business on Friday as a result of NetEase's failure to submit its annual report.
According to Nasdaq's rules, the hearing will be held 10 to 45 days after the appeal is filed and the company cannot be delisted during this period.
"Our report will soon be finished and I believe we will be able to make the deadline so as to avoid delisting," the executive said.
She also denied reports that NetEase did not have audits on its financial reports after being listed and said that all financial reports, including that of the first quarter this year, were audited by the accounting firm Arthur Andersen.
Wang Ran, a well-known Internet strategy analyst in Beijing, also expressed reserved optimism about NetEase's fate in the near future.
"It is true that NetEase will not be delisted from the Nasdaq before a hearing. And if they hand in the annual report, the possibility of delisitng will be slim," he said.
However, most Chinese analysts have warned Chinese businesses to learn from NetEase and improve their management.
"The financial management of many Chinese businesses is similar to NetEase's, which is not even the worst managed," Wang said.
He said the skepticism of foreign investors of the transparency of financial structures may not be limited to NetEase.
Charles Li, an Internet legal expert, urged Chinese Internet companies to not only focus on the introduction of foreign investors, but build healthy corporate governance structures.
Although most industry analysts believe many Chinese companies have similar problems as NetEase's and think the incident will discourage foreign investors' confidence in Chinese dotcoms, they suggested that investors' interests in the Chinese Internet industry will not be inhibited.
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