BEIJING, May 3, 2022 /PRNewswire/ -- Cloopen Group Holding
Limited (NYSE: RAAS) ("Cloopen" or the "Company") today announced
that it has formed an independent special committee to investigate
certain employee misconduct and transaction irregularities.
The Company's Board of Directors (the "Board") has formed an
independent special committee (the "Special Committee") to oversee
an internal investigation of the issues that were raised to the
Board's attention by KPMG Huazhen LLP ("KPMG") as discussed below
(the "Independent Investigation"). The Special Committee initially
comprises three independent directors of the Board. The Special
Committee has been empowered to retain independent advisors,
including independent legal advisors and forensic accountants, in
connection with the Independent Investigation.
During its audit of the Company's consolidated financial
statements for the fiscal year ended December 31, 2021, KPMG raised to the Company's
management certain misconduct of several employees of the Company,
including fabricating certain
documents. In addition, KPMG advised the Company that they
identified irregularities relating to certain customers'
transactions for previous years. The Company currently expects
that the impact from such employee misconduct and transaction
irregularities would be 5%-10% of the revenue for the
three-month period ended June 30,
2021 and 15%-20% of the revenue for the three-month period
ended September 30, 2021. These
figures have not been independently verified by the Special
Committee or its advisors and are subject to change as the
Independent Investigation proceeds. The Company has not concluded
on the potential implications on its consolidated financial
statements of previous years. The Company will release additional
information concerning the Independent Investigation in due course
and is committed to taking appropriate measures to improve its
internal controls.
On April 29, 2022, KPMG notified
the Board of its resignation as the Company's independent
registered public accounting firm. KPMG advised the Company, prior
to its resignation, of the following material weaknesses:(1)
insufficient accounting personnel with appropriate U.S. GAAP
knowledge for accounting of complex transactions, presentation and
disclosure of financial statements in accordance with U.S. GAAP and
SEC reporting requirements; (2) lack of sufficient documented
financial closing policies and procedures; and (3) insufficient
authorization or review controls in the revenue and the purchase
processes.
About Cloopen Group Holding Limited
Cloopen Group Holding Limited is a leading multi-capability
cloud-based communications solution provider in China offering a full suite of cloud-based
communications solutions, covering communications platform as a
service (CPaaS), cloud-based contact centers (cloud-based CC), and
cloud-based unified communications and collaborations (cloud-based
UC&C). The Company's mission is to enhance the daily
communication experience and operational productivity for
enterprises. The Company aspires to drive the transformation of
enterprise communications industry by offering innovative marketing
and operational tactics and SaaS-based tools.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The word
"expects," "anticipates" and similar terms and phrases are used in
this notification to identify forward-looking statements. Risks,
uncertainties and assumptions that could affect the Company's
forward-looking statements include, among other things, any changes
to the Company's preliminary assessment of the financial impact
disclosed in this press release, any anticipated financial results
as a result of the Company's independent registered public
accounting firm to be engaged to complete its audit of the
Company's financial statements, the ability of the Company and its
auditors to be engaged to confirm information or data identified in
the review, the Company's ability to complete and file future
periodic filings with the SEC on a timely basis and other risks and
uncertainties discussed more fully in the Company's filings with
the SEC. Unless required by law, the Company expressly disclaims
any obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or
otherwise.
For investor and media inquiries, please
contact:
Cloopen Group Holding Limited
Investor
Relations
Email: ir@yuntongxun.com
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SOURCE Cloopen Group Holding Limited