YuuZoo appoints EY for review

Mainboard-listed YuuZoo Corporation has appointed Ernst & Young Advisory to carry out an independent third-party review on a number of claims and allegations made against the firm.

The social media and e-commerce company said in a bourse filing yesterday that the appointment was made in consultation with the Singapore Exchange (SGX).

The review will look into issues raised in e-mails to the SGX and in six Business Times articles referred to in an announcement on July 17.

These related to claims filed by former YuuZoo employees 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 had refuted the various statements and claims in the articles, saying that it believed a subsequent decline in share price could be linked to the allegations.

The review will also look into queries raised by the SGX.

These relate to the receivables from YZ Group and R M Bidder, the impairment of intangible assets in relation to Etisalat, the agreements with Mobile Futureworks Inc and OpenMobile Asia-Pacific, and the revenue recognition for franchise sales, including the valuation methodology adopted.

It will also investigate the complaints made by YuuZoo employees against the firm's former financial controller, including police reports and complaints filed with YuuZoo management.

The findings of the review will be reported to YuuZoo's Audit and Governance Committee and the SGX.

YuuZoo said in its announcement yesterday that all of the claims relating to the company's business and financials were already reviewed by its auditors, who gave YuuZoo a clean audit for the financial year ended Dec 31, 2016.

The company has also responded via announcements on the SGX to queries over claims and allegations made in public by certain parties.

This latest review is therefore the third time that the same issues will be looked at.

YuuZoo shares closed 3.3 per cent or 0.2 cent lower at 5.8 cents yesterday, before the announcement was made.

A version of this article appeared in the print edition of The Straits Times on October 20, 2017, with the headline 'YuuZoo appoints EY for review'. Print Edition | Subscribe