NIISe ‘curse’ claims another victim as Iris Corp slumps 30%

The controversial National Integrated Immigration System (NIISe) appears to be a poisoned chalice that has wreaked havoc on the share prices of two listed e-government services providers linked to the project.

Over the past week, MyEG Services Bhd and Iris Corporation Bhd have seen their share price tank over 30%, wiping RM2.31 billion off the market capitalisation in the case of MyEG.

The sharp drop occurred after immigration director-general Khairul Dzaimee Daud announced on Feb 6 that all immigration services would be fully back under government management by 2025. The next day, MyEG’s share price crashed 26.7%. By the end of last Friday, its share price had dropped 36.5% in just four days.

In the case of Iris Corp, its share price actually spiked temporarily after Khairul’s statement, but subsequently declined.

In just under a week, the ACE Market-listed company’s share price dropped by 30.3% from 16.5 sen on Feb 7 to 11.5 sen yesterday. Its market cap fell RM163.39 million to RM375 million yesterday from RM538.39 million last Tuesday.

Its shares fell 14.81% or two sen to close at 11.5 sen yesterday, with 170.11 million shares traded.

Investors have evidently not taken kindly to its announcement last Friday that it was disposing its 80% equity interest in wholly owned subsidiary, Iris Information Technology Systems Sdn Bhd (IITS) – the developer of the RM1.13 billion NIISe – for RM70 million cash.

NIISe contract ‘done through open tender’

Last Thursday, FMT reported that the Malaysian Anti-Corruption Commission (MACC) was investigating the award of a government contract to a former prime minister’s son-in-law.

The contract in question was speculated to be for the development of NIISe. Former prime minister and Pagoh MP Muhyiddin Yassin has since denied allegations linking him to the contract.

He said he was never involved in the awarding of the NIISe contract to Iris Corp, which he said was done through an open tender.

In a Bursa filing, Iris Corp named the little-known Tass Tech Technologies Sdn Bhd (TTTSB) as the buyer of its stake in IITS.

As of Feb 9, the directors of TTTSB are Raja Muhammad Badiuzzaman Raja Chulan and Malisa Mohd Zaki. However, the company’s website does not provide any information about its board of directors or its management team.

“The disposal consideration was arrived at on a willing buyer, willing seller basis, taking into consideration IITS’s audited net profit of RM0.48 million for the financial year ended March 31, 2022,” Iris Corp said in the filing.

It said the disposal would enable it to unlock the value of its investment in IITS, and that it would contribute positively to the company’s cash flow position.

The NIISe contract awarded to IITS in January 2021 was expected to be a boon for the parent company, which had been struggling with losses on and off.

For the six months ended Sept 30, 2022, Iris Corp managed to register a net profit of RM8.4 million, a massive improvement from the loss of RM0.75 million for the same period in 2021.

It has also recovered with a strong order book with a number of contracts for e-passport manufacturing and biometric cards. A recent deal amounting to US$36.69 million (RM160 million) was inked with Tanzania for the delivery of national e-ID cards and services.

Arduous journey to win NIISe contract

The NIISe contract was hailed as a triumph for Iris Corp and its subsidiaries, which missed out on a lucrative RM318.75 million deal back in 2015 to rival Datasonic Group Bhd for the supply of MyKad and consumables.

The loss is said to have led to its subsequent diversification into environmentally friendly farming and renewable energy projects. However, the strategy backfired and the group began divesting its non-core assets from 2017 onwards.

Iris Corp’s strategy to lean back into its strengths has helped it recover, and perhaps contributed to winning the contract.

NIISe is the successor to the 20-year-old Malaysian Immigration System (MyIMMs) and seeks to incorporate biometric technology to enable the adoption of e-Gates at immigration checkpoints.

With its history as an e-Passport pioneer, Iris Corp was a popular candidate for the contract ever since the request for proposal (RFP) was called for in 2019.

This followed the termination of the RM3.5 billion Sistem Kawalan Imigresen Nasional (SKIN) project by then home minister Muhyiddin, who was part of the Pakatan Harapan government.

After terminating the contract with Prestariang Bhd, the government opted for NIISe as it was 66% cheaper. FMT

NIISe ‘curse’ claims another victim as Iris Corp slumps 30%

Baca Artikel Menarik: