Investors punish Datasonic, MyEG with RM1.6b value lost

Both firms vehemently deny the allegations and involvements in charges filed against Ahmad Zahid


Investors scurried and dumped Datasonic Group Bhd and MyEG Services Bhd shares last Friday, punishing the stocks and erasing RM1.59 billion in total market value after both companies were implicated in Datuk Seri Dr Ahmad Zahid Hamidi’s (picture) corruption cases.

The former deputy prime minister (DPM) was slapped with 45 charges of criminal breach of trust (CBT), accepting bribes and money laundering amounting to RM114.1 million last Friday morning at the Sessions Court in Kuala Lumpur.

The 65-year-old Umno president pleaded not guilty to all the charges. Shares of Datasonic and MyEG started to take a beating after both firms were linked to the charges faced by the Parliament Opposition leader. Ahmad Zahid has been accused of receiving bribes from Mastoro Kenny IT Consultant & Services Sdn Bhd to secure MyEG projects handled by the Home Ministry.

The former home minister was also slapped with charges of receiving bribes from Chew Ben Ben, a Datasonic director, according to the charge sheets. Datasonic was selected for the procurement of the additional supply of passport chips for five years or 12.5 million chips to be inserted into the Malaysian Biodata Polycarbonate Passport for the Immigration Department, in direct negotiation between the Home Ministry and Datasonic Technologies Sdn Bhd.

The former home minister was accused of receiving millions from the related parties.

A check on the Datasonic website named Chew as the deputy MD.

Both MyEG and Datasonic vehemently denied the allegations and their involvements in the charges filed against Ahmad Zahid.

“The board of directors would like to reiterate that the company had never made any payments to any party during the process to secure any of the company’s concessions awarded by the government,” MyEG said in a filing “The board would like to clarify that the company is not a party to the charges against former DPM Ahmad Zahid.”

MyEG claimed it has no knowledge of the company named in the charges, namely Mastoro, and has never engaged with any of its representatives or directors.

It added that it is unaware of the dealings between Mastoro and Ahmad Zahid, and that it never awarded any project to the company in question or appointed any vendor or contractor in its dealings with the Home Ministry.

In a separate filing, MyEG said it had received a letter from the Malaysian Anti-Corruption Commission (MACC) confirming that the company and its directors were not under investigation.

It said the MACC also confirmed that the company is not a party to the investigation leading to the charges against Ahmad Zahid.

Meanwhile, Datasonic said neither the company, nor its directors issued any payment to Ahmad Zahid in relation to the supply of the 12.5 million chips for the Malaysian passport.

It claimed that its unit Datasonic Technologies secured the five-year contract through an open tender in April 2012.

“Datasonic Technologies was awarded the supply of 12.5 million chips on Dec 15, 2015, based on the value proposition of enhanced chips security…and 15% lower pricing, compared to the previous vendor, that provided a total saving of RM56.25 million to the government over a period of five years,” the company said.

MyEG’s shares plummeted 37 sen to close at RM1.13 each, wiping out RM1.31 billion from its market capitalisation.

A total of 97.77 million shares exchanged hands before trade was suspended for the day at 2.30pm.

Datasonic’s shares tumbled 21 sen to close at 48.5 sen, erasing RM283.5 million in market capitalisation.

The company is on a RM233.38 million contract to supply all components of the Malaysian passports from Dec 1, 2016, to Nov 30, 2021.

However, shares of Iris Corp Bhd saw heavy buying last Friday. Its shares rose three sen to close at 17.5 sen. The company was the previous supplier of e-passport chips to the Malaysian government, but its contract was not renewed in May 2016.

Analysts expect both MyEG and Datasonic shares to continue to be under pressure despite the denials by both companies.

MyEG’s share price had already taken a beating after Barisan Nasional lost in the May 9 general election.