This article first appeared in The Edge Financial Daily on April 25, 2017

KUALA LUMPUR: Iris Corp Bhd is expected to make an announcement on the entry of a new substantial shareholder this week, which will be subscribing to the trusted identification (ID) company’s shares through a 10% private placement exercise.

Iris acting chief executive officer Choong Choo Hock said the company has engaged the investor and intends to announce the new development soon, confirming The Edge Financial Daily’s report last Monday. “At this point in time, we have engaged the potential investor and they basically have accepted our offer. Both parties will be making the announcement probably early next [this] week,” he said last Friday.

Choong said the new strategic partner will be subscribing to the entire 10% private placement.

Quoting a source, a local business weekly has reported that the investor is believed to be Destini Group Bhd managing director Datuk Rozabil Abdul Rahman and former Hong Leong Management Co Sdn Bhd managing director Paul Poh Yah Hong, through their vehicle Caprice Development Sdn Bhd.

The private placement forms part of the company’s three-pronged corporate restructuring plan, which aims to refocus on Iris’ core trusted ID business, to divest its non-core businesses and to raise additional funds. The plan was positively received by the board of Federal Land Development Authority (Felda), which holds a 21.33% equity stake in Iris through Felda Investment Corp Sdn Bhd (FIC).

Iris previously announced that the plan involves a fundraising exercise potentially involving equity funding, short-term debt financing, divesting non-essential assets and accounts receivable factoring. The company said the fundraising will involve engagements with various parties, including Malaysian Industrial Development Finance Bhd, key institutions, strategic investors, lenders and Iris’ creditors.

Felda chairman Tan Sri Shahrir Samad said the agency recognises the potential Iris has in the trusted ID and security business, and reiterated that it will maintain its stake in Iris. “We will maintain our stake through FIC, yes. I’ve always said that Felda will maintain its interest and stake in Iris. “A new shareholder and strategic partner has been brought in through the placement exercise. The new partner supports Iris’ direction going forward, which is to stay in the technology business,” he said.

Shahrir and Choong spoke to the media last Friday at a briefing on Iris’ proposed partnership with Norwegian biometrics company Zwipe AS to develop, manufacture and distribute payment cards and government ID solutions based on Zwipe technology.

The partnership was Iris’ first since the implementation of its corporate restructuring plan.

Iris co-founder and technical adviser Chas Yap said the two parties will look at possible ways they can work together to promote the new technology in Malaysia as well as on a global scale. “Iris has been in trusted ID for over 20 years and our facilities are all geared towards trusted ID. Zwipe, on the other hand, is pure payments and they’re an ID company as well. We are looking towards a future where we merge finance and ID together,” he said.