The tumultuous boardroom battle, played out in the public eye since January, saw its share price more than halve over the past six months. However, the dust appears to have settled with an almost new board with a clean slate seeking to show Revenue Group is back to business.
In a Bursa filing on Friday, the group said it proposed to acquire a 51% equity interest in Innov8tif Holdings Sdn Bhd for RM36 million from glove maker Hong Seng Consolidated Bhd.
Innov8tif Holdings is an investment holding company that owns Innov8tif Solutions Group and Xendity Sdn Bhd, together referred to as Innov8tif group.
The digital ID solutions provider specialises in ID verification (IDV) technology to support e-know your customer (e-KYC), e-know your business (e-KYB), anti-fraud processes, customer onboarding process automation, and mobile biometric authentication.
Revenue plans to fund the acquisition via a combination of its existing cash balance, internally-generated funds and/or borrowings.
Interestingly, Hong Seng acquired the 51% stake in Innov8tif Holdings just six months ago for RM30.86 million. In a filing with Bursa Malaysia, it said it is disposing the stake as it has “no experience in the digital industry”. At least Hong Seng came away with a RM5.15 million gain from its disposal.
The acquisition appears to be more synergistic for Revenue than it was for Hong Seng. The former explained the acquisition as a “strategic move” to acquire Innov8tif group’s digital identity (ID) assurance and digital onboarding businesses to complement and enhance its existing businesses providing payment solutions.
“This includes electronic data capture terminals, electronic transaction processing, and digital payment solutions,” it said.
Innov8tif claims to have over 70% market share in Malaysia, and its digital onboarding and IDV solutions are designed to transform existing processes for businesses, especially those in industries with high compliance requirements.
In a separate statement, Revenue executive director Teh Chee Hoe said Innov8tif group has a strong customer base that includes major banks, fintechs, telcos, government agencies, and insurance companies in Southeast Asia, including Singapore, Indonesia, the Philippines, Thailand and Cambodia.
“By leveraging each other’s strengths, both parties can cross-sell and accelerate research and development efforts to widen their footprint in the Southeast Asia region with integrated solutions and cashless payment gateway services,” said Teh, one of the new directors who replaced those who resigned during the boardroom struggle.
End of boardroom conflict?
The Revenue Group boardroom saga blew up in January when the board suspended co-founders and executive directors Brian Ng and Dino Ng after certain complaints made against them. The company then lodged a report with the Malaysian Anti-Corruption Commission (MACC) against the duo.
The brothers, who collectively held the largest shareholding bloc (23.7%) in the company, denied any wrongdoing. They were subsequently arrested by the MACC and charged in the sessions court on March 14 for fraudulent disposal of a company vehicle, made five years earlier.
About a week later, the brothers announced their resignation from the board. In their parting statement, the brothers claimed there had been attempts to take over Revenue Group since December 2022, and to oust them.
“Many baseless allegations have been levelled against us to achieve this end. We will fervently defend ourselves against these allegations at the appropriate forum and are confident of succeeding,” they added.
Earlier in March, six directors including co-founder and managing director Eddie Ng also quit from the board.
Last month, the group gave an assurance that its operations will continue unaffected by events of the last few months.
“Internally, we now have in place a new board of directors, whose collective relevant experience and knowledge provide the group with enhanced governance, leadership and overall management quality,” group executive director Francis Leong said in a statement on April 11.
Shareholders are hoping the new leadership’s move to acquire Innov8tif Holdings will turn out to be an astute investment, and a first step towards rebuilding the public’s trust in the company.
At market close on Friday, Revenue’s shares closed two sen or 6.56% higher at 32.5 sen, giving it a market capitalisation of RM163.97 million.