KUALA LUMPUR: Shares in My E G Services Bhd (MyEG) fell as much as 3.82% to close at the day’s low of RM2.77 yesterday, after the Home Affairs Ministry said the government was looking at an alternative to break the monopoly of the renewal of foreign work permits that are currently being offered by MyEG.
“There were a lot of companies which presented their products in 2012, and MyEG was the only [company that] could perform what the government wanted them to do,” Deputy Home Affairs Minister Datuk Wan Junaidi Tuanku Jaafar told reporters outside the Parliament building yesterday.
“[But] now the government is looking at an alternative to MyEG under Mampu (Malaysian Administrative Modernisation and Management Planning Unit) by the government,” he added.
However, he noted that the government is looking at this alternative, but has not implemented it yet.
“There is nothing wrong with MyEG, it’s just to not have a monopoly,” he stressed, noting that the government is sensitive towards the complaints raised over the RM38 processing fees recently.
He explained that the government had consented to MyEG (fundamental: 3; valuation: 1.1) collecting the RM38 from employers rather than having the employers pay RM300 or RM500 to an intermediary.
“So which one is better? Now the government is getting less than that,” he added.
Currently, employers pay MyEG RM125 for immigration processing fees when renewing work permits for their foreign workers. These employers also pay an additional RM38 charge per worker per year.
Later, in a statement, DAP Member of Parliament for Bukit Mertajam Steven Sim Chee Keong said what the deputy minister seemed to miss was that the government was “effectively crushing all other middlemen in favour of one”.
“By pocketing RM38 per transaction and having the monopoly on this service, MyEG is expected to earn RM100 million a year. On top of that, MyEG is expected to receive billions of ringgit annually in processing fees before remitting them to the government,” he said.
Sim called on the government to terminate MyEG’s appointment and then to have the Immigration Department provide the online service like the other online services they are already providing.
The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.
This article first appeared in The Edge Financial Daily, on April 9, 2015.