FORMER YuuZoo Corporation chief executive James Matthew Somasundram was fined S$35,000 for negligence in relation to overstating revenue of S$13.3 million for the first quarter of 2016’s results.
Somasundram pled guilty to the second of four charges relating to the Securities and Futures Act for misleading financial statements. The other three charges of overstating revenue for different financial statements were taken into account during his sentencing.
An extension to Thursday (Jun 27) was granted to Somasundram in paying the fine. Failure to pay the fine would result in three months imprisonment.
Somasundram was appointed CEO of Yuuzoo in October 2015, before stepping down one month later for health reasons.
“It is undisputed that the accused was the CEO of YuuZoo and was in position to make enquiries on the veracity of the FY2016 results, but instead relied on the board of directors,” said District Judge Wong Peck during sentencing.
She noted that Somasundram was made aware of issues raised by YuuZoo’s auditor Moore Stephens.
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The company, which is now known as YuuZoo Networks Group, is listed on the Singapore Exchange mainboard. Several of its quarterly reports released between 2015 and 2016 were allegedly misleading, as investigations found they overstated revenue by US$4.6 million to US$18.8 million.
Shares of YuuZoo have remained suspended since March 2018. The company disclosed that it was under investigation in April that year by the Commercial Affairs Department for possible breaches of the Securities and Futures Act.
Four other YuuZoo officers remain at large, including former executive chairman Thomas Zilliacus, chief financial officer Michael Parker, and independent directors Anthony Williams and Ozi Amanat. Warrants of arrest have been issued against them, and Zilliacus has an additional Interpol red notice issued against him.
