SINGAPORE (July 28): Mak Yuen Teen, associate professor at the department of accounting at the National University of Singapore Business School, says he has been a keen observer of corporate governance for almost 20 years, but he has never seen a company quite like YuuZoo Corp.
So far, Mak has published three commentaries raising questions about YuuZoo’s corporate governance. But the company has simply brushed off the accusations, saying his articles contained erroneous statements and posed misleading questions.
In his first commentary, Mak says there have been at least 15 departures of directors and key officers, including five CFOs and two audit committee chairmen. At that time, the company was also advertising for yet another CFO and another independent director was on the way out.
At the time of listing, YuuZoo had appointed BDO LLP as its external auditor. BDO subsequently issued a clean opinion for YuuZoo’s FY14 financial statements but decided not to seek reappointment at its first post-listing AGM. The replacement auditor, Moore Stephens LLP, issued a disclaimer of opinion for the FY15 financial statements and did not seek reappointment too. Its latest auditor, RT LLP, has issued an unmodified opinion with two emphasis-of-matter items and will be seeking reappointment.
Last year, a lawsuit was filed against YuuZoo, the executive chairman and several others in the US District Court of New York alleging federal securities fraud, common law fraud, negligent misrepresentation and breach of contract. Yet, no announcement had been made even though the SGX Rulebook requires disclosure of “significant litigation”.
The July 31 issue of The Edge Singapore has published an excerpt of a commentary by Mak and also contacted YuuZoo for a response. In reply, the company said that it has publically addressed Mak’s concerns and thanked him for bringing up corporate governance issues in the company.
Mak was also invited to be an advisor for YuuZoo to help the company strengthen its corporate governance.
“Instead of accepting the invitation to help the company improve its governance, he continued his public attacks on YuuZoo in yet another BT article on Tuesday July 11th, and is now doing the same in his latest online article,” replied Mohandas, COO of YuuZoo, to The Edge Singapore in an email.
“If he genuinely wants to improve the corporate governance of YuuZoo, then why did he decline the offer to advise the company on these matters?” added Mohandas.
To find out what YuuZoo’s other corporate governance issues are according to Mak, buy your copy of The Edge Singapore (Issue 790) which is on sale now.