Muhyiddin: Cabinet is firm with decision to terminate the contract
By AFIQ AZIZ
The government is expected to reissue a termination notice to Prestariang Bhd soon over the company’s RM3.5 billion National Immigration Control System (SKIN) concession with the Immigration Department.
Home Minister Tan Sri Muhyiddin Yassin said the move is in line with the Cabinet’s final approval to end the ICT software and training service provider’s 15-year contract.
Muhyiddin said prior to this, a termination letter was issued to the company after the ministry decided to review the concession, which was granted by the previous administration.
“We (the ministry) have already issued the notice to Prestariang despite the government’s request to postpone the cancellation of the contract. I consider that as a done deal.
“However, we will reissue the letter as the Cabinet is firm with the decision to terminate the contract,” he told reporters in Petaling Jaya yesterday.
On Monday, Muhyiddin told the media that the Cabinet had agreed to scrap the RM3.5 billion SKIN project.
However, in a filing to Bursa Malaysia, the company, through its subsidiary Prestariang SKIN Sdn Bhd (PSKIN), said it had not received any notification from the government over the matter.
“Prestariang board of directors wish to clarify that as of to date, PSKIN is not in default of the Concession Agreement and has not received any notice of default from the government,” the company told the stock exchange.
Despite the statement, the company’s share price plunged to a seven-year low of 30 sen on Monday, after faling 15 sen or 32.97%. Prestariang has lost some RM586 million in market capitalisation year-to-date, bringing its current market capitalisation to RM147.1 million.
Bursa Malaysia had also suspended proprietary day trading and intraday short selling of Prestariang shares for the rest of Monday, before trading was back to normal yesterday morning.
According to a media report, Muhyiddin had said the ministry would discuss with Prestariang’s representative to explain this matter and discuss the exit clause, including the compensation amount.
“The issue will be handled by Home Ministry Secretary General (Datuk Seri Alwi Ibrahim), and the termination letter will be issued as soon as possible,” he said.
In July, Alwi said the project would be reviewed, in line with the government’s financial constraint.