Troubled UMNO-linked firm Zetrix owes Malaysian government over $63 million in collections: Source

KUALA LUMPUR – A Malaysian firm whose listed shares have lost four-fifths of their value since August amid financial troubles is believed to owe more than RM200 million (S$63 million) to the country’s Road Transport Department (RTD).

Official documents seen by The Straits Times show that Zetrix AI failed to hand over money collected for the renewal of vehicle road tax, driving licences and traffic summonses from the very start of its three-year contract in May 2023.

This failure comes despite Zetrix – formerly known as MyEG, after the online government services portal of the same name – making billions of ringgit since it was first appointed in 2000 to provide digital counter services for agencies such as the RTD and the Immigration Department, handling permits and insurance for foreign workers.

“As at end September, the amount outstanding is well over RM200 million,” said a government official who asked for anonymity as the matter is politically sensitive due to UMNO’s presence in Prime Minister Anwar Ibrahim’s multi-coalition government.

“Right now, the Transport Ministry is mulling over the next step as it wants to have a more reliable digital payment system, but also wants to make sure the money owed is paid up.”

Effective Oct 5, the RTD will suspend MyEG and Zetrix as collecting agents.

“This decision was made after taking into consideration the lack of compliance with the terms and conditions of the agreement as well as the obligations that have yet to be fulfilled or resolved by the company,” it said in an Oct 2 statement.

As at press time, Zetrix has not responded to ST’s request for comment.

Zetrix has long had strong ties to prominent political figures, and its current executive chairman, Norraesah Mohamed, is a former UMNO supreme council member and senator.

It also suffered a sharp drop in share price after former human resources minister Saravanan Murugan was charged with corruption in late August, even as Zetrix denied any links to the leader from UMNO’s Barisan Nasional coalition.

Listed on Bursa Malaysia in 2005, the firm was a darling of the stock market when it was still called MyEG and a pioneer in online government services transactions.

At its peak in 2018, it had a market capitalisation of more than RM10 billion. It was valued at over RM6 billion in early 2026.

But when UMNO lost power for the first time since independence in the 2018 General Election, the company was shaken by the uncertain future of its monopolistic contracts.

Its deal with the RTD, for example, expired in May, and customers are now able to choose between using MyEG or the department’s own digital gateways.

Against this backdrop of the loss of its monopolies, it pivoted to new technology businesses such as artificial intelligence. Its blockchain technology now powers MyDigital ID, the national digital identity management platform.

The World Bank Group, through its private sector arm the International Finance Corporation, took an RM156 million stake in Zetrix in February to support the development of these technologies.

But external auditors have flagged soaring development costs as “a key audit matter”, highlighting the risk associated with the figure topping RM3.7 billion – more than half its total assets of RM6.7 billion – compared with less than RM200 million in 2020.

In August, Zetrix’s market capitalisation began a sharp decline, to just over RM1.2 billion currently, or roughly a fifth of its initial valuation. The share price closed at 16.5 sen on Oct 1, down about 80 per cent since the start of 2026.

This aggressive sell-down was primarily triggered by margin calls on pledged shares used as collateral for financing. This personal leverage unravelled against a backdrop of surging corporate debt, with Zetrix’s borrowings climbing to RM2.2 billion – nearly 14 times their level of RM160 million five years earlier.

Its net debt after taking into account its cash and cash equivalents now stands at RM1.65 billion, more than 23 times the RM71 million in 2021.

As a result, managing director and largest shareholder Wong Thean Soon has been forced to divest nearly two-thirds of his 29 per cent stake – the bulk of which was pledged – since Aug 27.

Zetrix is not the only UMNO-linked entity to owe the government money over the years. The National Feedlot Corporation received a RM250 million loan from the government in 2007 to launch a project to transform the local beef industry, but significant sums were instead used to purchase properties, including a luxury apartment in Kuala Lumpur.

In 2023, the court ordered the company controlled by the family of former UMNO women’s chief Shahrizat Jalil to repay RM34 million and hand the properties, as well as RM87 million previously seized, to the government.