Malaysia rules out $2.37 billion takeover of passport supplier

Malaysia's government has officially ruled out a potential acquisition of Datasonic Technologies Sdn Bhd, the company responsible for supplying the nation's passports and national identity cards. The decision comes after Datasonic's parent company, NexG Bhd, announced on August 21 that the government was exploring a potential takeover valued at RM7.5 billion (S$2.37 billion).

The National Security Council issued a statement late on August 22, confirming the government's decision not to proceed with the acquisition. The council emphasized that while the government will continue to explore measures to protect the "security and sovereignty" of citizens' identities, ensuring value for public funds remains a priority. The Ministry of Finance had previously requested an indicative price for a takeover from Datasonic during a meeting on July 24, though this request was reportedly verbal and without a written document.

NexG Bhd has been embroiled in a corporate dispute, with former executive Victor Chin identifying it as a target of an "attempted hijacking" by labor tycoon Aminul Islam, allegedly as part of a corporate mafia involving law enforcement agencies. NexG's valuation of Datasonic at RM7.5 billion was noted as not being an independent valuation.

Datasonic currently holds contracts to supply passports and IDs to the Malaysian government through 2032, with these agreements collectively worth approximately RM2.46 billion. As Datasonic is NexG's core business and primary contributor to revenue and earnings, any disposal could significantly impact NexG's operations and its stock market listing.