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YuuZoo responds to Business Times commentary
YUUZOO Corporation has responded on Friday to a commentary published in The Business Times that questioned its disclosure and accounting practices.
YuuZoo said in a six-point response to a July 6 commentary, titled "YuuZoo: More troubling issues" by associate professor of accounting at the NUS Business School Mak Yuen Teen that it had cancelled a deal to acquire Relativity Media in October 2016 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 2017.
An agreement was made between YuuZoo and Etisalat Nigeria in 2016, but Prof Mak had pointed out that it seemed to duplicate another deal in November 2014. YuuZoo said on Friday that the earlier one was inked by YuuZoo UK, a franchisee. This unit discontinued operations in late 2015, and as such a new deal with Etisalat Nigeria was in 2016 signed directly between YuuZoo and Etisalat.
YuuZoo also questioned Prof Mak's intention to highlight that the owner of YuuZoo UK, Mark Cramer-Roberts, had petitioned for bankruptcy in 2005. "How this in any way is relevant to YuuZoo, which was only formed in May 2008, remains completely unclear."
In response to Prof Mak's queries about why YuuZoo did not disclose anything about the financial distress faced by Etisalat, it stressed that the Nigerian company is a client and not a partner. "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'."
YuuZoo also stressed that YuuCollect, while dominant as its ecommerce revenue source, is not the only one.
In addition, YuuZoo said that it does not take "an element of credit risk", nor has ever stated that it recognises revenue because "its platform is unique", in response to another point made by Prof Mak.
YuuZoo's counter was down 0.6 Singapore cent, or 7.23 per cent to close on Thursday at S$0.077.