KUALA LUMPUR (April 15): Iris Corp Bhd has called off the sale of an 80% stake in its wholly-owned Iris Information Technology Systems Sdn Bhd (IITS), the former developer of the RM1.16 billion National Integrated Immigration System (NIISe) project, for RM70 million cash.

Iris terminated the agreement after the buyer, Tass Tech Technologies Sdn Bhd (TTTSB), failed to pay the second tranche of the deal’s disposal consideration.

“The board wishes to announce that the company had on Aug 10, 2023, upon TTTSB's request, granted TTTSB a further extension of time to settle Tranche 2 payment on or before Feb 29, 2024. TTTSB had failed to make any settlement for Tranche 2 payment on or before Feb 29, 2024,” the company said in a bourse filing on Monday.

“In view of the above, the company has elected to effectively terminate the SSA (share sale agreement),” it added.

The deal inked on Feb 10, 2023 comprised three payments — a RM7 million deposit paid upon the agreement being signed, the RM41.13 million second tranche within three months of the agreement, and a RM21.88 million third tranche within six months. With the termination of the deal, TTTSB has forfeited the RM7 million deposit as agreed liquidated damages and compensation.

IITS lost the RM1.16 billion contract to develop the NIISe after the Home Ministry terminated the job in August last year due to its failure to meet the project’s planning schedule. The contract’s termination came just over two and a half months after the deadline was extended by 12 months till August 31, 2026.

IITS was initially awarded the RM1.16 billion NIISe contract back on March 1, 2021, during Tan Sri Muhyiddin Yassin’s administration, for a period of 54 months till August 31, 2025.

Iris disputed the termination and has sought arbitration over the matter at the Asian International Arbitration Centre (AIAC).

Meanwhile, it was reported that the ministry is shopping for a new contractor for the NIIse project.

Earlier this year, The Edge reported that Dagang NeXchange Bhd, HeiTech Padu Bhd and Theta Edge Bhd are understood to have been shortlisted for the project.

Shares in Iris ended unchanged at 30.5 sen, valuing the ACE Market-listed company at RM244.78 million.