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Free Malaysia Today
22-07-2025
- Business
- Free Malaysia Today
Sentiment sours for Sunway Construction after MACC probe
Sunway Construction's order book stands at RM7.9 billion as at June 2025, with data centres making up 49%. (Sunway pic) PETALING JAYA : Research houses said Sunway Construction Group Bhd's (SunCon) potential of winning multi-billion-ringgit data centre jobs may be affected by an anti-graft investigation into an employee's dealings with subcontractors. Its shares tumbled as much 17.6% yesterday after it announced in a bourse filing the Malaysian Anti-Corruption Commission (MACC) had initiated an investigation on the employee. The stock continued falling today and was down 3.5% or 19 sen to RM5.30 at 4.15pm, valuing the company at RM6.96 billion. Despite the fall, the shares have surged 40% over the past six months on the back of its ability to compete successfully for data centre construction jobs. However, the falling share price is the least of its worries compared to the potential damage the episode may inflict on the Sunway Group's squeaky-clean image. The construction company is a subsidiary of Sunway Bhd, which has a 54.55% stake through Sunway Holdings Sdn Bhd. In a note today, TA Research said it was 'surprised by the development, particularly given SunCon's strong reputation for corporate governance' and its established suite of compliance policies. The research house said the reputational damage inflicted on the group is not quantifiable at this juncture, and the negative news flow may weigh on its near-term ability to secure new contracts. This uncertainty is likely to persist until the investigation is concluded, it added. 'Furthermore, we do not rule out the possibility that new clients may impose more stringent due diligence or require additional assurance on project execution standards – potentially leading to delays in new project awards. 'Against this backdrop, we remain cautious on the group's near-term job replenishment prospects,' said TA, which maintained its 'sell' call and cut its target price (TP) to RM5.59 from RM5.76 previously. Nevertheless, TA said it was reassured the case appears to involve misconduct in a personal capacity, rather than 'systemic failure'. 'We believe it is unlikely to compromise SunCon's relationships with existing clients,' it added. Advantage to rivals Meanwhile, CGS International noted that while SunCon maintains this is an isolated incident with no senior management involvement, reputational risks could temporarily provide advantage to rivals like Gamuda Bhd and IJM Corp Bhd. 'This may impact some of SunCon's ongoing tenders, especially in the data centre space, of which we understand there are seven to eight totalling RM14 billion,' it said. However, given its strong brand equity and parentage, CGS thinks SunCon will be able to recover from this without impacting its new order wins materially over the longer term. It noted that SunCon's year-to-date FY2025 wins amount to RM3.5 billion and its order book stood at RM7.9 billion as at June, with data centres making up 49%. The revelation of the anti-graft watchdog's probe on the SunCon employee comes on the heels of MACC's investigation dubbed Op Ways since last Thursday, over alleged corruption involving a data centre construction project tender in Johor worth some RM180 million. The operation resulted in the arrest of a manager of a construction company, alongside his wife and two men in the Klang Valley.
Yahoo
22-07-2025
- Business
- Yahoo
Nga Kor Ming demands apology over ‘white elephant' claims as MACC clears RM150m MyKiosk project
KUALA LUMPUR, July 22 — Housing and Local Government Minister Nga Kor Ming today called on critics to apologise to his ministry after the Malaysian Anti-Corruption Commission (MACC) found no criminal elements in the MyKiosk project. Nga said the Ministry of Local Government and Rural Development (KPKT) had taken proactive steps by inviting the MACC to investigate the project following various allegations labelling it a 'white elephant' and other claims of mismanagement. 'There were previously various allegations labelling this project a white elephant and so on. Because of that, the KPKT took the initiative to invite the MACC to investigate. 'When the MACC didn't come to us, we went to them and handed over all the documents for their review,' he said during a question-and-answer session in the Dewan Rakyat. Nga said the MACC subsequently issued a statement confirming that there was no abuse of power, no criminal elements, and no signs of corruption related to the project. 'So to those who threw stones, don't hide your hands. On behalf of all the hardworking KPKT staff who have been tirelessly helping the people, I demand that those who made slanderous accusations apologise,' he said. Nga added that the MyKiosk initiative, which aims to provide standardised, low-cost business premises for small traders, remains part of the government's agenda to support grassroots entrepreneurs. In May, Parti Pribumi Bersatu information chief Datuk Tun Faisal Ismail Aziz claimed that the MyKiosk project was wasteful and had turned into a white elephant. Selangor MCA Youth also lodged a complaint with the MACC, urging an investigation into the funding and implementation of the RM150 million MyKiosk project. Its chief, Tan Jie Sen, claimed that despite the large allocation, just over half of the kiosks were occupied. Nga said as of July 2025, the occupancy rate for MyKiosk stood at 2,926 units (91.75 per cent), while MyKiosk 2.0 recorded an occupancy of 3,518 units (86.78 per cent).
Yahoo
19-07-2025
- Business
- Yahoo
Malaysia's AI darling NationGate sees shares tumble after it got raided in a scrap metal smuggling probe
Shares of NationGate Holdings, Nvidia's only manufacturing partner in Southeast Asia, took a beating this week after the company disclosed a raid into one of its subsidiaries by Malaysian authorities. On Tuesday, Nationgate admitted that the Malaysian Anti-Corruption Commission (MACC) raided the premises of NationGate Solution, a wholly-owned subsidiary, as part of an ongoing investigation into scrap metal smuggling. Nationgate's shares fell 14% on Tuesday to reach 1.45 Malaysian ringgit ($0.34). Shares pared back losses over the rest of the week, but are still down over 10% from Tuesday. On Thursday, NationGate stated that the raids did not involve any specific board members or senior management, and that the company didn't expect a significant hit to its finances or operations. In a response to Fortune, a spokesperson from NationGate Holdings said that it is an electronic manufacturing services company and that scrap metal trading has never been part of the company's business. The spokesperson added that the MACC visit to NationGate Holdings' subsidiary is part of an industry wide investigation, and that as a responsible corporate citizen, NationGate is giving full assistance to the MACC investigation. Malaysia's state news agency Bernama reported on Tuesday that the MACC launched a crackdown on scrap metal smuggling syndicates operating in five states that have resulted in an estimated tax revenue loss of 950 million Malaysian ringgit ($223.9 million). The report added that preliminary investigations revealed these syndicates exported scrap metal to India, China and other countries but reported them as machinery or other metals not subject to the 15% export tax imposed by the government. NationGate, ranked No. 243 on the Southeast Asia 500, was the fastest-growing company on Fortune's ranking of the region's largest companies by revneue. 2024 sales surged 720% to reach 5.3 billion Malaysian ringgit ($1.6 billion), largely thanks to surging growth in its data computing segment. NationGate is the only company in Southeast Asia that assembles Nvidia's highly sought-after graphic processing units (GPUs) into AI servers. Nvidia's GPUs are the most used in high-performance AI applications. But the AI boom and the link to Nvidia are also a risk for NationGate. In early March, Malaysia and neighboring Singapore faced U.S. allegations of being channels for controlled chips to make their way to China. U.S. officials were reportedly interested in whether DeepSeek, the scrappy Chinese AI startup, got its hands on Nvidia processors it wasn't supposed to have. Singapore's Law and Home Affairs Minister K Shanmugam said in March that servers containing chips subject to U.S. export controls appeared to have been sent to Malaysia. Malaysia's Trade Minister Tengku Zafrul Abdul Aziz then said officials were investigating and vowed to take necessary action. Separately, Singapore has also charged three men with fraud for allegedly misrepresenting the end-user of computer servers that may contain Nvidia chips. On Monday, Malaysia announced that all exports of high-performance U.S. AI chips will now require permits for exports, and that individuals and companies must notify the government at least 30 days prior to shipping such hardware. NationGate has distanced itself from the subject and has clarified that it's not involved in any investigations. Yet investors are still spooked. NationGate's shares are down over 40% year-to-date. Update July 19, 2025. This article has been updated with a statement from NationGate Holdings. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
