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Tech company YuuZoo investigated by Singapore police over alleged ‘financial breaches’

Singapore-listed technology company YuZoo is under police investigation over allegations it breached the country’s Securities and Futures Act.

The company, which claims to make “social e-commerce networks” for brands, is being probed by the police’s Commercial Affairs Department over breaches related to its franchise arrangements between 2013 and 2016.

According to The Straits Times, the company’s Singapore headquarters were raided last week and its chief executive officer, Thomas Zilliacus, has handed over his passport to the CAD.

In a statement posted on SGX, the company said: “As at the date of this announcement, the CAD has not disclosed to the company any further details on the above mentioned investigations.

“The company will cooperate fully with the CAD in its investigation and will make announcement as and when there are further significant developments with regard to this matter.”

Founded by music entrepreneur Ron Creevey and former Nokia Asia Pacific chief executive Thomas Zilliacus, YuuZoo specialised in making gamified social commerce platform.

As of 2015, the company claimed to have  partners and franchisees in 68 countries, including China, France and Nigeria.

Among YuuZoo’s most notable products released in Singapore was an intriguingly-named mobile game called Honey Snatch. 

However, since its listing on the SGX in 2014, YuuZoo has been embroiled in a civil lawsuit in New York that alleged the company and its founders, including  Zilliacus and Creevey, had engaged in securities fraud.

In the lawsuit, the founders are alleged to have made YuuZoo look like a successful entity valued at $US383 million (S$490 million).

Since the Singapore police’s investigation was launched, YuuZoo’s trading on SGX has been suspended.

In its latest financial statement from last year, the company made significant losses of S$20,678,000 before tax. The previous year, it had made a gross profit S$4,102,000.

Meanwhile, its losses before interest, taxes, depreciation, amortisation came to S$12,758,000 against its EBITDA of S$12,222,000 in 2016.

Despite claiming to raised,  S$30 million in investor funding, the company’s revenue from last year amounted to little more than S$519,000. The year previously, YuuZoo had made S$4,878,000, marking a fall of nearly 90 per cent.

According to the results, the losses were caused by “significant impairments of available for sale assets”.

Zilliacus has been contacted for further comment.

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