Local IT firm Tricubes Berhad clarified why a Guidance Note 3 (GN3) for debt restructuring was issued to it by Bursa Malaysia, further claiming that the status does not effect its ability to implement and fund the RM50 million 1Malaysia Email project announced by the PM on Monday.

NONE “Tricubes had invested heavily in research & development, which has a long gestation period,” said CEO Khairun Zainal Mokhtar ( left ) in a statement in response to queries from Malaysiakini and other media on the matter.

He said this in response to a news report that his company has been classified as GN3, or a company in need of debt restructuring by Bursa Malaysia.

However, he said that his company is “well on the way to generate returns to recoup its investment”. No details were given over what R&D activity the company was engaged in and how much debts it had to restructure nor the amount of funds it has to recoup.

Khairun also argued that a GN3 company, like Tricubes, is still allowed by Bursa Malaysia to continue carrying out business activities, hence Tricubes is still eligible to bid for the 1Malaysia Email project, though he admitted that in order to remain listed, the company has to “regularise” its financial standing.

“Tricubes has achieved its first milestone in its regularisation plan set by Bursa Malaysia, with the appointment of its sponsor, M&A Securities Sdn Bhd in January 2011. The sponsor is expected to submit the company’s regularisation plan to Bursa Malaysia and obtain its approval no later than Oct 29, 2011.”

He also added that despite the company’s debts incurred as it “heavily invested in research & development”, the company had proven its ability to generate funding for this new project, convincing the government evaluation team which had met with Bursa Malaysia to clarify Tricubes’ GN3 status prior to making its final selection.

‘Internal funding and borrowings’

“Tricubes’ total investment over the next 10 years will be approximately RM50 million. Our initial investment is estimated to be at RM5.3 million. This includes infrastructure costs for hardware and software, maintenance and raising awareness of the project.

“We have secured initial financing through a combination of internally generated funds and borrowings. We expect to reinvest revenue received from the project to ensure sustainability,” he said.

NONE But the CEO did not respond to Malaysiakini ’s query on whether CIMB-owned venture capital company Commerce Technology Ventures Sdn Bhd, which owns a portion of Tricubes’ shares, will be involved in the project’s funding. CIMB is a company linked to Nazir Razak, the brother of the PM.

Khairun explained that the concept of a “Malaysian email” project was mooted by industry members during the NKEA Communications Content and Infrastructure (CCI) Lab organised by the Performance Management Delivery Unit (Pemandu) under the Economic Transformation Programme (ETP) in June 2010.

Apparently, as Khairun further described, the term “Malaysian Email” means the service must be operated and hosted by a Malaysian company. However, he states that the idea was non-exclusive and open. Any interested private party was free to submit its proposal to the government, though by virtue of the term “Malaysian email”, only Malaysian companies have any hope of being selected.

Malaysiakini was informed that several very prominent global IT players with expertise in email and social networking technology had bid for the project directly and through local partners, only to be turned down.

‘Microsoft as technology partner’

The proposals submitted, related Khairun, were assessed by e-government Entry Point Project (EPP) teams comprised of members from the Malaysia Administrative Modernisation and Management Planning Unit (Mampu) and official e-government network provider for the government GITN Sdn Bhd, to ensure sustainability and implementable business models.

Every proposal is assessed on similar criteria, which he said Tricubes met or surpassed, thus defeating other bids.

Malaysiakini ’s attempts to contact Mampu’s e-government unit on the matter has thus far failed to evoke any response.

Tricubes, while known for its enterprise mobility and identity authentication solutions, has no professed expertise in email and online network technology, though it partnered with software giant Microsoft in the project, with the software firm providing its Microsoft Live online platform technology, similarly available to its free Hotmail email service.

According to Khairun’s statement further, the 1Malaysia Email project implemented under the name “MyEmail” has two clear KPIs and targets:

  • 100% of Malaysians aged 18 and above to subscribe to this email by 2015.
  • 50 pecent of the subscribers using value-added services by 2020.
However, he contended that subscription to the email is voluntarily for Malaysians 18 and above, explaining that the KPIs and targets are just for performance monitoring and accountability and does not mean that Malaysians will be assigned to take up the service.