MyEG has first-mover advantage, says MD

Wong(pic), who is the substantial shareholder and managing director of MyEG Services Bhd, held insignificant stakes in the two companies with 3.92% in Palette and 0.31% in MUI. Wong said that he disposed of all his shareholding in Palette and MUI because certain media had picked up the information in the annual reports and created a misconception of an impending corporate exercise in the companies

PETALING JAYA: Government service provider MyEG Services Bhd group managing director Wong Thean Soon said the company has spent close to RM150mil on its Goods and Services Tax (GST) programme, where it has acquired close to 20,000 dongles, and there are grounds to seek compensation should the programme be cancelled.

Wong is well known for his position as the managing director and single largest shareholder of MyEG Services Bhd, which had a market capitalisation of some RM7bil prior to the stock hitting limit down on Monday and Tuesday. MyEG, which has lost close to RM3bil in market cap, is seen to be related to the previous ruling party.
 
Wong owns some 30.26% of MyEG via his vehicle Asia Internet Holdings Sdn Bhd, and 7.76% under his name. 

In a lunch hosted for investors yesterday in its office, Wong said all of MyEG’s contracts have agreements behind them, although the one with the highest risk is the GST contract.  

“We have not recognised any revenue (from the GST contract). Everything else is business as usual. We have not had a chance to speak to any government official,” he told the 28 attendees yesterday.
 
Wong said that typically, MyEG negotiates for the renewal of its contracts a year before its expiry. The GST contract expires in 2020, hence negotiations should take place next year. 

He added that other players can certainly replicate what MyEG does, although he feels that MyEG can compete efficiently and effectively. Its first-mover advantage is another huge plus point. 

“Do I think we can work with the new government? Yes, I think we can. I believe we can establish a good relationship. MyEG is one of the government's flagship MSC projects and I think we are probably the only one still left. Remember that MSC is Tun Dr Mahathir Mohamad’s initiative. I cannot proclaim that this is rocket science but it takes time, operational time to put things in place,” he said. 

When asked whether MyEG was going to make itself politically neutral, Wong believes that will not be the case. 

“We have to be close to the government of the day as we are a government e-service provider,” he told the investors.
 
Wong believes there is no need to see a change in MyEG’s shareholding. 

MyEG will be hosting a Ramadan event for Tun Mahathir next week.
 
On MyEG’s longer-term outlook on its earnings, Wong said he cannot say for sure because he is uncertain what the government policies are going to be. 

“Right now, we are just going on with business as usual. All these contracts are under the e-government flagship but some of our services are added on – I am not sure the added-on services can be for open tender,” he added.

On Wednesday, Bursa said in an announcement that MyEG’s lower limit price was RM1.27 following two consecutive days of the stock hitting limit down.

MyEG’s last traded price before GE14 was at RM2.58 on May 8. As of 12.30pm on Thursday, MyEG was down 17 sen to RM1.10 on volume of 248.49 million shares.