KUALA LUMPUR (Oct 19): Datasonic Group Bhd, whose share price plunged 36.7% in the morning session on news that the company was implicated in the charges against former deputy prime minister Datuk Seri Ahmad Zahid Hamidi, clarifies that neither the company nor any of its directors has made payment to Zahid in relation to the supply of chips for passports.

In an announcement to Bursa Malaysia during market's lunch break, Datasonic said its subsidiary Datasonic Technologies Sdn Bhd (DTSB) won a five-year contract to supply passport polycarbonate datapages and printing system based on per passport produced through an open tender in April 2012.

"DTSB was awarded for the supply of 12.5 million chips on Dec 15, 2015 based on value proposition of enhanced chips security (to put the chips bonded into the polycarbonate datapage instead of at the back of passport cover) and 15% lower pricing as compared to the previous vendor that provided a total saving of RM56.25 million to the government over a period of five years," said Datasonic.

Zahid was appointed as deputy prime minister and home minister in July 2015.

According to the charge sheet against Zahid, on April 26, 2017, Zahid received a bribe from Chew Ben Ben, a director of Datasonic Group, in the form of two cheques worth RM5 million and RM1 million produced by Sarana Kencana Sdn Bhd to a Maybank account owned by Lewis & Co as kickback.

Zahid, under his capacity as the home minister then, facilitated the appointment of DTSB to undertake a five-year contract to provide 12.5 million chips for Malaysian passports to the Immigration Department under a direct negotiation process at the Ministry of Home Affairs.

To recap, based on the company's announcement to Bursa on April 13 this year, Datasonic has been awarded a RM270.7 million contract by the Ministry of Home Affairs to supply 9.96 million polycarbonate biodata pages to Jabatan Imigresen Malaysia (JIM) for 46 months commencing from Feb 1 this year to Nov 30, 2021.

The contract signifies Datasonic's continuation of supplying polycarbonate biodata pages to JIM after the previous RM364.4 million contract to supply 12.5 million pages ended in January this year, which it won earlier.

The sizable contract stemmed the sharp fall on Datasonic's share price back then, rebounding from 77 sen — the lowest since November 2013 to a high of RM1.01 after the announcement.

News that Datasonic was implicated in charges against Zahid sparked heavy selldown on the company's shares. The stock tumbled to five-year low of 44 sen, down 25.5 sen with 41.4 million shares traded. Some RM344.25 million market capitalisation has been wiped this morning.