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Sarbanes-Oxley: Counting the cost

Rank's termination of its ADR programme and a survey on US public company costs highlight impact of legislation

Despite the extra year given in March to foreign companies to comply with the Sarbanes-Oxley Act in the US, the financial burden of the extra reporting requirements claimed another victim in July when Rank Group, the UK leisure company that owns the Hard Rock Café restaurant chain, announced its plans to delist from Nasdaq. In announcing its intention to terminate its American depositary receipt programme, Rank cited the costs of complying with SEC reporting requirements as its main reason.

In a statement to the press, Rank said: "Having considered the costs and benefits of maintaining a Nasdaq listing and SEC registration, Rank's board believes that the burden and expense of complying with SEC reporting and other applicable US obligations is out of proportion to the benefits obtained by the company and its shareholders as a whole."

The company also said that it intended to amend its articles of association to empower it to require US holders of its ordinary stock to transfer their shares, so as to allow the company to end its registration with the SEC.

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