UPDATE 1-NYSE to delist Longtop Financial ADRs, suspends trading

Wed Aug 17, 2011 8:08am EDT

* Says to file delisting application with SEC

* Longtop stock halted since May 17

* Delisting to be effective 10 days after Form 25 is filed (Adds background on halts and delistings in paragraphs 4,5, factbox and list of halted companies)

By Divya Sharma

BANGALORE, Aug 17 (Reuters) - The New York Stock Exchange (NYSE) said the securities of Chinese software company Longtop Financial Technologies Ltd , which had been halted since May 17, will be delisted and suspended prior to the opening of trade on Wednesday.

Late on Tuesday, the exchange said in a statement it will delist the American depository shares and file a Form 25 delisting application with the U.S. Securities and Exchange Commission (SEC).

The delisting will be effective 10 days after the Form 25 is filed, unless postponed by the SEC, it said.

U.S. exchanges had to delist a number of Chinese companies in recent months after a rash of potential accounting scandals.

Also, shares of some Chinese companies have been halted for months, stranding investors who are unable to close out positions.

Last month, the NYSE had said it would start delisting proceedings against Longtop, which did not meet listing standards, and gave the company a certain period to appeal this decision.

On May 23, Longtop's auditor quit and a U.S. regulator opened a related probe, deepening concerns about possible accounting irregularities at the Chinese company. [ID: nL3E7GN1X1]

In recent months, shares of several U.S.-listed Chinese companies -- including China MediaExpress Holdings Inc and Harbin Electric -- have been hammered after research firms and short sellers such as Citron and Muddy Waters issued reports alleging potential accounting frauds. (Reporting by Divya Sharma in Bangalore; Editing by Joyjeet Das) (divya.sharma@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: divya.sharma.reuters.com@reuters.net))

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