KUALA LUMPUR (March 25): Nearly four years after Cahya Mata Sarawak Bhd (KL:CMSB) conducted an independent review of certain projects and investments that cleared current deputy chairman Datuk Seri Mahmud Abu Bekir Taib and former chief information officer Karl Vink @ Khalid Abdullah of any conflict of interest, the two are once again in the spotlight. This time, they are named in a lawsuit filed by the company.

CMSB and its subsidiary Cahya Mata Intelligent Technologies Sdn Bhd (CMIT) have initiated legal action against Abu Bekir, Vink and others for breach of trust and fiduciary duties related to a failed Enterprise Resource Planning (ERP) system, part of the company’s digital transformation project.

Notably, Abu Bekir and Vink were subjects of an independent review conducted by KPMG Management & Risk Consulting in 2021 that examined the financial management of certain investments and contracts amid allegations of conflicts of interest in contract awards and potential financial mismanagement at the executive level.

The review ultimately led to the suspension and subsequent departure of the group’s chief financial officer Syed Hizam Alsagof after the company chose not to renew his contract. Syed Hizam later sued CMSB for wrongful dismissal and won.

At the time, CMSB's board of directors concluded that the allegations of conflict of interest involving Abu Bekir and Vink were "without basis".

The current lawsuit for breach of trust and fiduciary duties centres around a digital transformation project awarded in 2019.

The project aimed to overhaul the Cahya Mata group's various information technology systems into a unified ERP platform, alongside revamping the group's network infrastructure to a cloud-hosted environment.

CMIT awarded the project to Vienna Advantage GmbH (VAG) on July 24, 2019, but terminated it on March 17, 2021.

On May 23, 2022, a restart contract was signed between CMIT and VAG.

However, a dispute arose from this restart contract, leading CMIT to initiate arbitration proceedings on Jan 10, 2025, due to VAG’s alleged failure to deliver and implement the ERP system.

CMSB’s suit names Abu Bekir and Vink, citing records from the Companies Commission of Malaysia and the German Company Register, which show that the two are shareholders of Vienna Advantage Asia Sdn Bhd (VA Asia), along with VAG. They were also directors of VA Asia prior to resigning on Jan 10, 2025.

The suit also names VA Asia, VAG, former CMIT senior general manager Izzul Abdul Kamar and managing director of Vienna Advantage GmbH (VAG) Atul Dua as defendants.

This legal action follows a lawsuit filed by Abu Bekir himself against CMSB, claiming he was denied access to the company’s accounts despite his role as a director. He is seeking a court order to inspect the company's accounts, as well as those of five subsidiaries.

The first mention of the legal action is fixed on April 21, 2025.

CMSB counts Lembaga Tabung Haji and Sarawak Economic Development Corp (SEDC) as its substantial shareholders. Tabung Haji owns a 6.8% interest while SEDC has a 5.67% stake.

Its share price closed 1.5 sen or 1.5% higher at 99.5 sen earlier, giving it a market capitalisation of almost RM1.1 billion. The stock is down 17.1% this year.

Read also:
Cahya Mata Sarawak sues deputy chairman Abu Bekir Taib, five others over failed project
Cahya Mata Sarawak initiates arbitration against Vienna Advantage over contract dispute
Cahya Mata Sarawak: Deputy chairman Bekir to stay on, conflict of interest allegation 'without basis'