SINGAPORE (Apr 2): Singapore Exchange Regulation (SGX RegCo) on Monday issued YuuZoo Corporation with its second notice of compliance in less than a month.

SGX RegCo has ordered independent auditors Ernst & Young Advisory (EY) to provide it with a copy of the executive summary of its initial findings on YuuZoo as soon as it is finalised. The findings in the interim report is also to be released immediately via SGXNet upon its receipt.

On July 2017, YuuZoo announced it was engaging an independent auditor to investigate claims of poor corporate governance in the e-commerce company.

See: Scrutinising YuuZoo’s deals

See also: Shares in YuuZoo down 1.4% at 6.9 cents after initiating plans to investigate BT claims

As directed by the exchange, the scope of the review was to include revenue recognition from franchise sales, receivables from YZ Group and RM Bidder LLC as well as impairment of intangible assets run relation to Etisalat and receivables from related parties.

According to SGX RegCo, auditor EY said in its draft report dated Feb 23 it was not given the necessary access to information and data required to perform the review. In addition, EY said the review was restricted by scope exclusions imposed by YuuZoo.

These actions "were inconsistent with the spirit of the independent review," said SGX RegCo.

"Listing Rule 1405(1)(b) provides that the Exchange may, for the purposes of ensuring that the market is fair, orderly and transparent, require an issuer to makes specified disclosures," said SGX RegCo in its latest notice of compliance to YuuZoo.

"Failure to comply with the requirements imposed by the Exchange shall be deemed to be a contravention of the Listing Rules," said SGX RegCo, adding that it reserves the right to release the interim report and any of the initial findings via SGXNet, in order to allow shareholders and the investing public to be informed of EY's findings.

SGX RegCo issued YuuZoo with its first notice of compliance on Mar 5, asking the group to get its statutory auditors to vouch for the accuracy and reasonableness of some other numbers in its unaudited FY2017 income statement.

See: SGX hits YuuZoo with compliance notice to explain variance in numbers

YuuZoo was also asked to explain why certain metrics recently announced in its FY17 earnings fell short. The exchange had noted there were a number of errors in the announcement and had asked the company to make the relevant amendments and reproduce the revised announcement.

Trading of shares in YuuZoo were suspended since Mar 19 after the statutory auditors of YuuZoo informed the company and SGX that they are "unable to obtain sufficient appropriate audit evidence" to provide an opinion as required in a notice of compliance (NOC) issued on Mar 5.

See: SGX slaps trading suspension on YuuZoo