YuuZoo quits office with unsettled rents; CEO resigns over unpaid salary

More trouble appears to be brewing at YuuZoo Networks Group Corp (formerly YuuZoo Corporation) as the social media company vacates its flagship office at the iconic 20 Science Park Road, Teletech Park, in Singapore without settling its rent.

This comes several days after its chief executive officer of barely a year, Mohandas - who goes by one name - resigned due to unpaid salary, The Business Times (BT) understands.

Late Friday, BT visited YuuZoo's office on the third floor of Teletech Park, a building designed by the late Kenzo Tange for telecom research and development firms. But the doors were locked, with a couple of notices pasted on them.

In the notices addressed to Yuuzoonow! Pte Ltd, landlord Ascendas Singbridge informed the indirect wholly-owned subsidiary of YuuZoo that it was in breach of its obligations as a tenant.

"Amongst other obligations, the rent, service charge and other sums due to us have remained unpaid for at least seven (7) days after becoming payable,'' wrote Tan Sai Chin, manager of lease operations on behalf of Teletech Park Pte Ltd.

The notices to the company stated that in a letter dated March 11, 2019, the landlord's solicitors, Eversheds Harry Elias LLP, had notified the firm that the tenancy would be terminated and premises re-entered on March 14, "since there has been no full settlement of the outstanding amounts to us by the given deadline''.

YuuZoo disclosed on Sunday night that Mr Mohandas tendered his resignation on March 5, a day after it was accepted by the board. It said the reason for his resignation, which takes effect this morning (March 18), was the company's inability to continue Singapore operations amid a trading suspension. However, Mr Mohandas will continue to serve as non-executive member of the board.

Mr Mohandas joined YuuZoo in 2016 as head of Business Operations, then head of South and Southeast Asian Operations.

According to Singapore Exchange Listing Rule 704 (7), any appointment or cessation of service of any director, CEO, or equivalent rank, must be announced by the board immediately.

Attempts by BT to contact key members of YuuZoo's management had been unsuccessful.

YuuZoo was founded in 2008 by Thomas Zilliacus, a Finn, and Ron Creeve, an Australian. It was listed on SGX in Sept 2014 through a reverse takeover (RTO) of W Corporation.

The company, which claims to be one of the world's first third-generation social e-commerce companies with access to over 118 million registered users in 164 countries, had been in the spotlight previously over several issues.

These included multiple resignations of its audit committee chairman, independent directors, chief financial officer (CFO) and external auditor; highly questionable disclosures; loss-making acquisitions and investments; and aggressive accounting policies. In January this year, it lost two independent directors who resigned after several months.

One of the more contentious departures was that of group financial controller Thai Youn Fatt, who left in 2017 after refusing to sign off on YuuZoo's revenue recognition policy. Mr Zilliacus himself resigned last April, following an investigation by the Commercial Affairs Department (CAD) into the affairs of the company.

Singapore's white collar crime buster had raided the offices of YuuZoo last April and interviewed the company's former management staff, including Mr Zilliacus, as part of its investigation into possible breaches of the Securities and Futures Act. It seized valuation reports, audit plans and materials prepared by various professionals as well as several hard disks, chargers and adapters of certain employees.

Last May, Mr Zilliacus provided a bond, and got his passport returned to him for overseas travel.

The company's woes led to a plunge in the company's share price and eventually the suspension of trading in YuuZoo shares in March 2018 on the auditors' inability to give their opinion on the veracity of financial statements for the year to Dec 31, 2017. Eventually, when the audited results for that period were released in September 2018, they showed a 12-month net loss of S$101 million, against the net profit of S$2.29 million that the group had reported, while the audited revenue came in at S$18 million, against the unaudited figure of S$62.2 million.

YuuZoo had some S$136,000 in cash and cash equivalent on Dec 31, 2018, down from S$3.2 million a year ago.

Angela Tan

18 March 2019