By Pucong Han
Columbia Journalism School
Reporter at People’s Daily Online
ZST Digital Networks, Inc. (“ZST”), a major developer, manufacturer
and supplier of digital and optical network equipment to cable system
operators and providers of GPS tracking devices and support services for
transport-related enterprises in China, announced that its Board of
Directors has decided to seek a voluntary delisting from the NASDAQ
Global Market on April 6, 2012.
According to the unaudited third quarter 2011 financial Results, the
third quarter net income of ZST increased 28% year-over-year from $6.4
million in 2010 to $8.2 million in 2011.
As previously disclosed in the Company’s Current Report on Form 8-K,
filed with the Securities and Exchange Commission (SEC) on March 30,
2012, BDO China Dahua CPA Co., Ltd. (“BDO”) informed ZST of its decision
to resign as ZST’s independent registered public accounting firm,
effective March 26, 2012.
According to the official notice filed by BDO, ZST seriously
restricted their audit procedures for the year ending December 31, 2011.
“We planned a more simple procedure to confirm the bank balance; but
[ZST] refused and insisted we follow the process [ZST] had arranged,”
said Bo Zhong, Chairman of the Board of Directors, and Huifang Liu,
Chairwoman of the Audit Committee. “We were unable to continue providing
our services as the independent registered public accounting firm for
[ZST].”
“The restrictions placed on us by the company had substantially
limited our work scope,” said Zhong and Liu. “The restrictions on the
audit procedures could indicate a probability that there were material
errors in previously issued financial statements.”
In view of the Company’s inability to continue to comply with
NASDAQ’s continued listing requirements set forth in Listing Rule 5250
(c)(1), requiring filings to be made with the SEC on a timely basis, the
Company has notified The NASDAQ Stock Market of its intent to
voluntarily delist its common stock from the NASDAQ GM.
According to the press release, ZST intends to file Form 25, a
notification given to the SEC by a national securities exchange telling
of the removal from listing, on or about April 16, 2012. ZST anticipates
that the delisting of its common stock will become effective on or
about April 26, 2012. ZST expects that its common stock will be eligible
for trading on the over-the-counter market thereafter.
(Pucong Han is an intern reporter at People’s Daily Online. He is
from Columbia Journalism School. Pucong can be reached at:
puconghan@gmail.com)
The article has been published at http://english.people.com.cn/90778/7785882.html
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