Kuala Lumpur, Malaysia – The Malaysian government has officially announced its complete abandonment of the potential acquisition of Datasonic Technologies Ltd., the company responsible for providing the country with sensitive identity documents, including passports and national identity cards. In a statement issued late on August 22 by the National Security Council, the government confirmed its final decision not to proceed with the proposed acquisition. The statement explained that authorities are simultaneously exploring and adopting alternative measures aimed at protecting the security and sovereignty of citizens’ identities. Furthermore, the authorities are committed to ensuring the best possible value for public expenditure.
Background to the financial presentation and trade tensions
This decisive decision came just days after NexG Bhd, the parent company of Datasonic, announced on August 21 that the government was seriously considering a potential acquisition valued at approximately RM7.5 billion (S$2.37 billion). In a formal filing with the stock exchange, NexG stated that the Malaysian Ministry of Finance had verbally requested Datasonic’s management, at a meeting held on July 24, to provide a price guideline for the potential acquisition. The company indicated that the request was made verbally, without any formal written documentation at the time. The Ministry declined to comment immediately on the matter.
NexG has recently become the focus of a wide-ranging business dispute after former CEO Victor Chen identified it as the target of what he called a business “hijacking” attempt by business tycoon Aminul Islam. Chen alleged this was part of a network he termed a “corporate mafia” involving multiple entities and parties. Although NexG management valued Datasonic at approximately 7.5 billion ringgit, they later cautioned investors that this valuation was neither independent nor final.
Current contracts and market effects
It is worth noting that Datasonic currently holds strategic and exclusive contracts to supply the Malaysian government with passports and national identity cards until 2032. The total value of these agreements is approximately RM2.46 billion. Datasonic is considered the core business and backbone of NexG, as well as the primary contributor to the company’s revenue and profits. Therefore, NexG warned in its statement to the stock exchange that any structural changes or potential share sales could negatively and directly impact its operations and potentially even affect its continued listing on the Malaysian stock exchange.
