CEO Morning Brief

Iris Corp to Offload 80% of NIISe Project Developer for RM70 Mil

Publish date: Tue, 14 Feb 2023, 08:47 AM
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TheEdge CEO Morning Brief
Iris Corp to offload 80% of NIISe project developer for RM70 mil

KUALA LUMPUR (Feb 10): Hot on the heels of dominating headlines earlier this week, Iris Corp Bhd has moved to dispose of 80% equity interest in its wholly-owned subsidiary Iris Information Technology Systems Sdn Bhd (IITS) — the developer of the RM1.13 billion National Integrated Immigration System (NIISe) — for RM70 million in cash.

In a bourse filing, Iris said the stake is being sold to information technology company Tass Tech Technologies Sdn Bhd, which is wholly-owned by Tass Tech (M) Sdn Bhd (TTSB). The share sale agreement was inked on Friday (Feb 10).

A check with the Companies Commission Malaysia (SSM) showed that as on Nov 7, 2022, Tass Tech (M) was 70%-owned by Shukor Ahmed, while the remaining 30% was held by Raja Muhammad Badiuzzaman Raja Chulan.

Raja Muhammad Badiuzzaman, a former G3 Global Bhd group chief executive officer, is the executive director and CEO of Tass Tech.

Iris reasoned that the disposal would enable the group to unlock its value of investment in IITS and would contribute positively to its cash flow. Proceeds from the disposal are to be used for working capital and any future business expansions undertaken.

The group said the disposal is not subject to the approval of its shareholders or any relevant authority.

The disposal is expected to be completed in August upon full settlement of the RM70 million from TTSB within six months from now.

On Monday, the New Straits Times quoted Immigration Department director general Datuk Seri Khairul Dzaimee Daud as saying that the Home Ministry had set aside RM900 million for the roll-out of NIISe in two years, and that the new system was expected to be a "game changer" that would improve the department's efficiency and customer experience.

NIISe will replace the current Malaysian Immigration System (myIMMS) that the department has been using for about 13 years. It will converge all immigration transactions, including passport renewals, visa applications, applications and renewals of permits for foreign workers.

On Tuesday, MY E.G. Services Bhd — which is currently a concession holder for immigration-related services — saw its share price drop 26.7% or 25.5 sen to 70 sen, while Iris Corp's shares climbed 32% or four sen to 16.5 sen.

The NIISe project was initially awarded to Iris Corp with a value of RM1.16 billion, but the amount was subsequently reduced to RM1.13 billion after the government agreed to reduce the applicable sales and service tax for the project.

Alleged MACC probe into NIISe

The New Straits Times also reported on Monday that the Malaysian Anti-Corruption Commission was investigating a former prime minister and his son-in-law over possible abuse of power in the award of the NIISe project.

Former prime minister Tan Sri Muhyiddin Yassin on Tuesday denied the allegations and asserted that the claim “is a malicious lie created to smear my image and that of my family”.

The former premier said he was never involved in the award of the NIISe contract to Iris Corp and added that it was done in accordance with the government’s standard procedures, supervised by the finance ministry and other relevant ministries.

He also stressed that none of his family members had any vested interest in Iris Corp, be it in the capacity of a shareholder or company director.

According to bourse filings back in 2021, Iris Corp said the project was secured by IITS via an open tender process which began with a request for proposal by the Home Ministry on May 23, 2019.

Shares in Iris Corp on Friday closed down half a sen or 3.57% at 13.5 sen, giving the group a market capitalisation of RM456.22 million.

Source: TheEdge - 14 Feb 2023

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