This article first appeared in The Edge Financial Daily, on December 22, 2015.

KUALA LUMPUR: Information and communications technology (ICT) security solutions provider Scan Associates Bhd, which is embroiled in a boardroom tussle with former chief executive director and co-founder Datuk Dr Norbik Bashah Idris, hopes to break even this financial year ending June 30, 2016 (FY16) backed by cost-cutting efforts.

Its executive director Mak Siew Wei, who is a substantial shareholder of the company with a 6.19% stake, said Scan Associates is looking to reduce its operating costs.

“Currently, the business is still ongoing as per what it is supposed to be and we have no plans to close down any of our business units. The key here is to cut our operating costs such as office rental,” he told reporters after the ACE Market-listed group’s annual general meeting (AGM) yesterday.

“Previously, we were paying RM60,000 a month in rental, and now we are paying somewhere between RM3,000 and RM4,000 a month. So, these are some of the measures that we can undertake moving forward,” Mak said.

A July 24 filing with Bursa Malaysia showed that Norbik, together with former director Hussin Othman, has requisitioned an extraordinary general meeting to be convened to vote on the removal of four company directors including Mak. Norbik held a 5.89% stake in Scan Associates as at Sept 22.

Scan Associates is currently being managed by its executive committee, after the resignation of Norbik in June this year.

Earlier, at yesterday’s AGM, the group deliberated and addressed the audited financial statements for FY15.

The court, meanwhile, has ordered for the AGM to be adjourned to Jan 15, 2016 to further deliberate the other six items on Scan Associates’ AGM agenda, as well as to re-elect former director Yeoh Eng Kong based on a High Court order dated Dec 16.

Yeoh is another substantial shareholder of Scan Associates, with a 7.79% stake as at Oct 13.

For the 18 months ended June 30, 2015, Scan Associates saw its net loss widen to RM19.2 million from RM2.1 million a year ago, mainly due to the difficult environment which led to impairments in development expenditure and receivables totalling RM13.8 million.

For the first financial quarter ended Sept 30, 2015 (1QFY16), it posted a net loss of RM379,000 compared to a net profit of RM47,000 in 1QFY15. Revenue fell to RM1.95 million from RM1.98 million in 1QFY15.

Scan Associates was classified as Guidance Note (GN3) company on May 18 by Bursa. As a GN3 company, it is required to comply with some conditions, including submitting to the securities exchange a regularisation plan and obtain their approval to implement the plan within 12 months.

Whether or not the group will remain as an ICT-based company in the future, Mak said it will depend on its regularisation plan, but declined to elaborate as it is still a work in progress.

“We still have five months to go, and when the time comes, we will make the appropriate announcements,” he added.

Scan Associates closed 4.5 sen yesterday, with a market capitalisation of RM9 million.