SGX hits YuuZoo with another notice of compliance

The initial findings from an independent review of mainboard-listed YuuZoo Corp have been referred to the relevant authorities for possible breaches of listing rules.

The company has also been slapped with yet another notice of compliance - its second in as many months - from the bourse operator.

In an exchange filing yesterday, the Singapore Exchange (SGX) said a draft report from YuuZoo's independent reviewer, Ernst & Young Advisory (EY), showed that YuuZoo has not given EY the necessary access to information and data.

The review was also restricted by scope exclusions imposed by YuuZoo that were "inconsistent with the spirit of an independent review", the SGX added.

The bourse said it issued a notice of compliance to YuuZoo yesterday, requiring EY to submit an executive summary of the initial findings to SGX as soon as these are finalised. The company will also be required to release these findings publicly.

The bourse suspended the trading of YuuZoo shares last month after the company missed a disclosure deadline tied to regulatory queries over its full-year results for the 12 months ended Dec 31, 2017.

The suspension will be lifted when regulators are satisfied that "the state of affairs of the company can be ascertained and the shares... can be traded on a fair, orderly and transparent basis".

YuuZoo appointed EY last October to carry out an independent third-party review after a number of claims and allegations were made against the firm.

The review would look into issues raised in e-mails to the SGX and in six Business Times articles referred to in an announcement on July 17 last year. These related to claims filed by former YuuZoo staff against its former financial controller, including two different police reports, one of which was filed over alleged extortion. Claims were also raised by the former financial controller in an e-mail sent to the SGX after his services were terminated.

YuuZoo in July rebutted the various statements and claims in the articles, saying it believed a subsequent decline in share price could be linked to the allegations.

The review would also look into queries raised by the SGX. These relate to the receivables from YZ Group and RM Bidder, the impairment of intangible assets in relation to Etisalat, the agreements with Mobile FutureWorks and OpenMobile Asia-Pacific, and the revenue recognition for franchise sales.

A version of this article appeared in the print edition of The Straits Times on April 03, 2018, with the headline 'SGX hits YuuZoo with another notice of compliance'. Print Edition | Subscribe