YuuZoo responds to commentary in Business Times

Thomas Zilliacus, co founder and executive chairman of YuuZoo poses for a photograph.
Thomas Zilliacus, co founder and executive chairman of YuuZoo poses for a photograph. PHOTO: ST FILE

SINGAPORE - YuuZoo Corporation has responded to a commentary published in The Business Times that raised further issues relating to its disclosure and accounting practices.

The social media and e-commerce firm said a pre-market filing with the Singapore Exchange on Friday (July 7) that it sought to clarify several points made in a July 6 commentary by associate professor of accounting at NUS Business School Mak Yuen Teen, titled "YuuZoo: More troubling issues".

On an earlier deal to acquire Relativity Media that was cancelled in October 2016, YuuZoo said it did so because "conditions precedent were not met, and the due diligence revealed that Relativity had mispresented its business during the negotiations leading up to the agreement".

YuuZoo added that it had already clarified this point in February this year.

In his commentary, Prof Mak noted that the agreement made between YuuZoo and Etisalat Nigeria in 2016 appeared to duplicate another deal that was made in November 2014.

YuuZoo, in response, said the earlier agreement was inked by YuuZoo UK, a franchisee which discontinued operations in late 2015, and therefore a new deal with Etisalat Nigeria was signed directly between YuuZoo and Etisalat in 2016.

YuuZoo also questioned Prof Mak's mention of YuuZoo UK owner Mark Cramer-Roberts' bankruptcy petition in 2005. "How this in any way is relevant to YuuZoo, which was only formed in May 2008, remains completely unclear," it said.

The firm went on to stress that Etisalat is a client, and not a partner, in return to Prof Mak's questions on why YuuZoo did not disclose anything about the financial distress faced by the Nigerian company.

"In view of the announcement, there is therefore no reason to expect any negative consequences on YuuZoo's cooperation with Etisalat Nigeria. Any possible issues with Etisalat Nigeria also has little impact, if any, on YuuZoo's 'foray into Nigeria'," it said.

In addition, YuuZoo refuted claims that YuuCollect was its only source of e-commerce revenue. It said that while YuuCollect was the dominant source of revenue for e-commerce in 2016, it was not the only one.

YuuZoo also said it does not take "an element of credit risk", nor has it ever stated that it recognises revenue because "its platform is unique".

YuuZoo shares were down 1.3 per cent or 0.1 cent at 7.6 Singapore cents as at 10am on Friday.