PETALING JAYA: Shares in Mesiniaga Bhd soared to a new high of RM1.84 during intraday trading yesterday, after the market was closed for two days for the Chinese New Year celebration.
The information technology firm saw its share price closing 18 sen or 11.2% higher to RM1.79, making it to the top-10 biggest gainers’ list on Bursa Malaysia.
The spike in interest in Mesiniaga came about last month after the company announced that it had won a RM1.9bil contract.
The contract was from Xiddig Cellular Communications Sdn Bhd for the commissioning of the core, metro distribution and access network for the Malaysia International Internet Gateway (EM-IIG) project.
However, the hype was shortlived as there were questions in the market on the validity of the project.
The project came under scrutiny, especially on the financial viability of the EM-IIG project, given’s Xiddig’s loss-making status and the lack of clarity on the nature of the funding for the high-speed broadband project.
The Companies Commission of Malaysia’s records showed that Xiddig, an alternative mobile communications line provider, had posted an after-tax loss of RM2.38mil in financial year 2017 (FY17), against a meagre revenue of RM55,137.
The company’s total assets in FY17 stood at RM10.09mil, marginally higher than its total liabilities of RM9.5mil. Its issued share capital was RM10mil.
When StarBiz contacted the owner of Xiddig, Datuk Seri Abdul Rashid Abdul Rahim, who owns a 96% stake, he said the EM-IIG project was viable financially and operationally.
He said the project would be undertaken on a private finance initiative basis.
Abdul Rashid also claimed that Xiddig had secured the support of “a group of investors” who would provide the key funding sources.
Abdul Rashid is the brother of Baling MP and former Tabung Haji chairman Datuk Seri Abdul Azeez Abdul Rahim. “We have enough funding, but we cannot disclose much information on it due to our non-disclosure agreement with the investors. We target to recoup our investments and break even in four years,” he had said last month.
The EM-IIG project had also came under scrutiny after Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail denied saying that the government would extend its full cooperation to the project, three days after Mesiniaga announced the contract.
In a statement, the Deputy Prime Minister’s Office also said Wan Azizah had not approved the text of the speech that was delivered on her behalf during the launch of the EM-IIG project on Jan 22.