Magna Must Find New Director to be in Compliance
Updated: Tuesday, August 29, 2006 6:49 PM
By Ryan Conley
Posted: Tuesday, August 29, 2006 4:22 PM
As a result of Gino Roncelli's departure from its board of directors on Aug. 22, Magna Entertainment Corp. is no longer in compliance with Nasdaq's audit committee requirements and must find a new director to return to good standing, it was announced Tuesday.
MEC made public Tuesday a recent letter from Nasdaq that said the company had until next year's annual shareholders meeting in August to regain compliance by appointing another independent director or face being delisted from the computerized trading network.
Nasdaq rules state that a company's board must have a majority of independent directors. Roncelli's departure left MEC with just two independent directors.
The Nasdaq letter, dated Aug. 23, said MEC had four days from the document's receipt to announce the non-compliance issue or face delisting, and Tuesday's press release by the company met that deadline. The release said MEC "has commenced a search to replace Mr. Roncelli . . . and intends to regain compliance with Nasdaq's audit committee requirements prior to the expiration of the cure period."
In an e-mail to The Blood-Horse
, Nasdaq spokesman Wayne Lee declined to comment on the specifics of MEC's situation, noting that, if any company fails to maintain enough independent directors it is "technically deficient," but is entitled to a cure period to regain compliance.
"All the markets have the same rule," he wrote.
MEC acquires, develops, and operates racetracks and related casino and pari-mutuel wagering operations, including off-track betting facilities. Toward the close of trading Tuesday, MEC (Nasdaq:MECA) stock price was trading at $4.35.
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