Mavcap says money not meant for 1 Malaysia email
UPDATED @ 07:09:02 PM 27-04-2011
KUALA LUMPUR, April 27 — Malaysia Venture Capital Management Bhd (Mavcap) confirmed today it had invested RM5.5 million in a Tricubes Bhd subsidiary, but it clarified that the money was meant for the development of mobile solutions and not the 1 Malaysia email project.
The clarification from the government fund, started to provide seed money for start-ups with high growth potential, has now raised questions again about Tricubes Berhad’s finances. The IT company also confirmed Mavcap’s clarification in a filing to Bursa Malaysia this evening.
“Malaysia Venture Capital Management Bhd would like to state that we have made an investment of RM5.5 million directly into Tam Tam Sdn Bhd, the subsidiary company of Tricubes Bhd,” Mavcap chairman Datuk Dr Abdul Samad Alias said in a statement today.
He said that Tam Tam’s business portfolio included providing mobile solutions such as sales force automation software catering to small-to-medium enterprises (SMEs) involved in sales and marketing, and enforcement software to the police force and local councils.
Tricubes wholly acquired Tam Tam on December 27 last year when it bought an 81 per cent stake in the company for a total cash consideration of RM81, according to a filing made by Tricubes to Bursa Malaysia.
Abdul Samad also stressed today that Mavcap, the country’s largest venture capital company, would “remain steadfast” in its commitment to catalyse development in Malaysia and spur the growth of information and communication technology (ICT) companies with its investments.
In the filing made to Bursa Malaysia this evening, Tricubes said Mavcap’s convertible securities had been invested via Tam Tam.
“Mavcap invested in Tam Tam by subscribing to 400,000 Redeemable Convertible Preference Shares (RCPS) of RM0.10 each with a premium of RM13.65 each, in Tam Tam for a total consideration of RM5.5 million,” the filing said.
“The RCPS shall be subscribed in two tranches of 254,546 RCPS and 145,454 RCPS for considerations of RM3.5 million and RM2 million, respectively.”
Tricubes’ share price on the ACE Market ended at 26.5 sen a share with 422,173 shares traded today, up one sen from yesterday’s close.
Tricubes chief executive Khairun Zainal Mokhtar told reporters yesterday that the company had borrowed some RM5.3 million from Mavcap to help kick-start the controversial 1 Malaysia e-mail project.
He said under the deal, Mavcap, which is controlled by the Minister of Finance Inc, can convert the debt into Tricubes shares.
Tricubes triggered Bursa Malaysia Securities’ Guidance Note 3 (GN3) in October last year when the company was flagged by auditors concerned about its weak financial standing.
Tricubes was one of only 12 GN3 companies listed on the Bursa Malaysia website as of March 9.
The launch of the 1 Malaysia email service is expected by July.
It will be given free to all Malaysians aged 18 and above who register for an account with the National Registration Department (NRD) or by using a USB biometric device sold by Tricubes.
The Malaysian Insider understands that Tricubes is pinning its hopes on the Employees Provident Fund (EPF) and Internal Revenue Board (IRB) to sustain the service through pension and tax notifications.
Prime Minister Datuk Seri Najib Razak has said that the 1 Malaysia e-mail project will have a gross national income (GNI) impact of RM39 million up to 2015 and will allow direct and secure communications between Malaysian citizens and the government.
But critics say the government should focus on infrastructure projects such as the provision of clean water or broadband across the country rather than working on a free email service which is already available through Hotmail, Yahoo! and Google Inc.
Detractors also question why loss-making Tricubes, at risk of being delisted after it triggered Bursa Malaysia Securities’ GN3, was tapped to spearhead the project.
Tricubes has said it is collaborating with Hotmail service owner Microsoft Corp for the project but provided no details.