SEC, Nasdaq gently coshing NEC
Dance of the acronyms
The SEC has moved up the pressure on NEC a notch, sending the Japanese firm an "informal inquiry letter".
The letter asks NEC to disclose certain documents to the US markets regulator, the firm said yesterday, adding it would cooperate fully with the SEC inquiry.
NEC has had a tricky few weeks in the US. Last month it received a delisting notice from NASDAQ after it failed to file its annual report in time, apparently to review its accounting practices. Its main problem, was how to recognise "revenue from maintenance and support services provided as part of multiple element arrangements with respect to IT solutions".
It's not immediately clear if this difficulty is the reason why it announced yesterday that it would begin preparing its accounts in line with Japanese accounting principals as of the first half of the fiscal year ending March 31, 2007, i.e., the six months ending September 30. In the meantime, the preparation of US GAAP results "may take considerable time".
It is also not clear what bearing this will have on its ongoing issues with NASDAQ. ®