KUALA LUMPUR (Nov 24): Iris Corp Bhd said it is taking its dispute with the Home Ministry over the cancellation of its contract for the National Integrated Immigration System (NIISe) to arbitration.
The group said its wholly owned subsidiary Iris Information Technology Systems Sdn Bhd (IITS) filed a notice on Friday to refer the dispute to the Asian International Arbitration Centre (AIAC).
"IITS firmly disputes the termination of the NIISe contract and is taking necessary actions to protect its interest and exercise its legal rights in relation to the NIISe contract," Iris said in a filing with Bursa Malaysia.
IITS was first awarded the NIISe contract worth RM1.16 billion in January 2021 for a period of 54 months commencing from March 1, 2021 until Aug 31, 2025.
On May 24 this year, the Home Ministry extended the contract by 12 months to Aug 31, 2026.
On the same day, Home Minister Datuk Seri Saifuddin Nasution Ismail said that there was a possibility of replacing IITS as a contractor of NIISe if the company is unable to implement the project.
Before the contract renewal, Saifuddin said the project had not achieved adequate progress as at March.
Then on Aug 14, Iris said IITS had received a notice for the termination of the contract with immediate effect.
It is worth noting that Iris was seeking to dispose of 80% of its stake in IITS to information technology company Tass Tech Technologies Sdn Bhd for RM70 million, which has now been delayed.
The two parties had already inked a share sale agreement in February for the disposal, and a RM7 million deposit has been paid, with an expected completion in August 2023.
However, Tass Tech had twice requested to defer the payment of the second tranche (RM41.13 million), which was supposed to be paid in May, and the third tranche (RM21.87 million), which was supposed to be paid in August.
The second tranche's payment date has now been deferred to Feb 29, 2024, while the third tranche's payment is delayed to May 31, 2024.
Iris' shares closed down 0.5 sen or 6.25% at 7.5 sen on Friday, giving the group a market capitalisation of RM244.72 million. The stock has declined 46.43% year-to-date.