BEIJING, Sept. 6,
2022 /PRNewswire/ -- Cloopen Group Holding
Limited (NYSE: RAAS) ("Cloopen" or the "Company") today announced
that the independent special committee of the Company's Board of
Directors (the "Special Committee") has substantially completed its
independent internal investigation (the "Independent
Investigation") into the issues disclosed in the press release
issued by the Company on May 3,
2022.
As previously announced, the Company's Board of Directors (the
"Board") formed the Special Committee to oversee the Independent
Investigation of the employee misconduct and transaction
irregularities that were raised to the Board's attention by KPMG
Huazhen LLP, the Company's previous independent registered public
accounting firm, during its audit of the Company's consolidated
financial statements for the fiscal year ended December 31, 2021. The Special
Committee retained White & Case LLP as its independent
legal advisor, which has been assisted by BDO Limited as the
independent forensic accounting expert. The Company provided
substantial cooperation with the
Independent Investigation.
The Independent Investigation generally covers the fiscal
year 2021. For certain large customer accounts, relevant evidence
in the fiscal years 2018 to 2020 was also reviewed. Based on the
assessment from the Independent Investigation, the Special
Committee has found that, as a result of the uncovered employee
misconduct and transaction irregularities, the Company's reported
revenues were inflated by approximately RMB11.6 million (unaudited) in the second quarter
of the fiscal year 2021 and by approximately RMB17.8 million (unaudited) in the third quarter
of the fiscal year 2021, representing approximately 4% and 6% of
its reported total revenues in the same period, respectively. The
Company's reported costs and expenses were inflated by
approximately RMB9.2 million
(unaudited) in the second quarter of the fiscal year 2021 and by
approximately RMB1.8 million
(unaudited) in the third quarter of the fiscal year 2021. The
Company would also fall significantly below its previously
announced revenue guidance on the fourth quarter of the fiscal year
2021. The financial impact and the affected historical financial
statements remain subject to the review by the Company's incumbent
auditors. The Independent Investigation did not uncover any
evidence indicating that the Company's chief executive officer or
chief financial officer had participated in the employee misconduct
and transaction irregularities.
The Company has taken significant remedial measures, including,
among others, (1) discontinuing certain implicated business
department, and (2) terminating, requesting the resignation of, or
giving disciplinary warnings to relevant employees.
In connection with the Special Committee's findings and
recommendations, the Company is also in the process of implementing
a number of additional remedial measures to enhance internal
controls and financial review policies and procedures, including,
among others, improving various relevant internal policies and
providing related employee trainings. Going forward, the Board and
management of the Company are committed to adhering to best
practices for compliance and corporate governance.
The Special Committee may continue to perform certain additional
investigation steps if necessary.
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). Cloopen's mission is to enhance the daily communication
experience and operational productivity for enterprises. Cloopen
aspires to drive the transformation of enterprise communications
industry by offering innovative marketing and operational tactics
and SaaS-based tools.
For more information, please visit
https://ir.yuntongxun.com.
Forward-Looking Statements
This press release contains forward-looking statements made
under the "safe harbor" provisions of Section 21E of the Securities
Exchange Act of 1934, as amended, and the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes,"
"estimates," "confident" and similar statements. Cloopen may also
make written or oral forward-looking statements in its reports
filed with or furnished to the U.S. Securities and Exchange
Commission (the "SEC"), in its annual report to shareholders, in
press releases and other written materials and in oral statements
made by its officers, directors or employees to third parties. Any
statements that are not historical facts, including statements
about Cloopen's beliefs and expectations as well as its financial
outlook, are forward-looking statements. These forward-looking
statements are based on Cloopen's current expectations and involve
factors, risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking statements.
Such factors, risks and uncertainties include, but not limited to
any further findings from the Special Committee's additional
investigation steps (if any), and the review by Cloopen's auditors
of the financial impact of the uncovered employee misconduct and
transaction irregularities and the affected historical
financial statements. Further information regarding these and other
risks, uncertainties or factors is included in Cloopen's filings
with the SEC. All information provided in this press release is
current as of the date of the press release, and Cloopen does not
undertake any obligation to update such information, except as
required under applicable law. All forward-looking statements are
qualified in their entirety by this cautionary statement, and you
are cautioned not to place undue reliance on these forward-looking
statements.
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