Covansys confident of averting Nasdaq delisting

Covansys Corporation, a US based technology firm, today said it was confident of filing the 10-Q form (for quarterly results) for the three months ended March 31, 2004, before the deadline date when it would be forced to delist from Nasdaq.

In early May the Michigan-based firm had indicated that due to some 'fixed assets readjustment' the filing of first-quarter results has been delayed.

Convansys has a strong presence in India with three development centres here. The company's Chennai offshore development centre houses 2,400 people, followed by the Bangalore centre, which has a headcount of 700. Over 100 people work out of the Mumbai centre on enterprise solutions.

Reacting to queries on reasons for the delay in the filing the quarterly results, K Subramaniam, president and chief executive of Covansys' Indian operations, said, "The notification letter we received from the Nasdaq was triggered by our delay in filing our 10-Q form and is not related to our current operations or financial performance. We recently completed a physical inventory of our company's fixed assets and identified both physical losses, and obsolescence of certain property and equipment, mainly computers and related peripherals."

He added that the company was now working to resolve issues surrounding the proper accounting treatment for these losses, which, as announced earlier this month, represent less than one per cent of total assets.

Subramaniam said, "Covansys has requested a hearing before a listing qualification panel of the Nasdaq. As a result, the delisting will be stayed pending the outcome of the hearing, which should occur within the next 30-45 days. At present, no firm date has been received for the hearing. Following final resolution of these issues, we intend to file our 10-Q form with the Securities and Exchange Commission as soon as possible, at which point we will be in full compliance with the Nasdaq filing requirements."

The company's stock is now traded under the symbol, CVNSE, against the earlier symbol of CVNS, indicating the delay in filing of financial results for the first quarter of 2004.