KUALA LUMPUR (March 18): NexG Bhd (KL:NEXG) on Wednesday declared that the massive fair value losses from share investments that recently dragged the company into the red are now a "closed" matter, following a boardroom exodus that saw the departure of seven directors from the company after a brief power tussle.
NexG, which holds RM2.46 billion worth of contracts to supply Malaysian passport booklets and identity cards to the government, said its board concluded that the matter of the fair value losses "had been thoroughly ventilated, reviewed and accepted" by its audit and risk management committee and the board at their respective meetings to review the report on the company's performance in the third quarter ended Dec 31, 2025 (3QFY2026).
The decision came after a special board meeting on March 11 to discuss the company's response to two articles by The Edge (see: NexG sinks into red as RM145.6m paper loss on investments wipes out profits; NexG’s investment loss warrants attention) on the issue, its bourse filing on Wednesday showed.
NexG, formerly known as Datasonic Group Bhd, reported a net loss of RM130.88 million for 3QFY2026, as it recorded a fair value loss of RM145.6 million on certain quoted investments. While the company did not provide details on these investments, its past bourse disclosures showed a series of acquisitions into volatile penny stocks, including MMAG Holdings Bhd (KL:MMAG) and NexG Bina Bhd (KL:NEXGBINA), formerly Classita Holdings Bhd, that have seen steep drops in market value.
NexG spent RM88 million to buy 220 million shares or a 9.53% stake in MMAG at 40 sen each in March 2025. MMAG’s share price has since dropped 91.3% to close at 3.5 sen last Friday (March 13).
It also bought a 32.61% stake in then Classita Holdings in August 2025 at 15 sen apiece, together with 414.31 million warrants at between 3.5 sen and 4 sen apiece, for RM76.78 million. Rebranded NexG Bina since then, the counter's share price has dropped to 2.5 sen apiece, while its warrant price has skidded to one sen.
The latest announcement was framed as a "clarification" on the company's recent developments.
It came a day after NexG's freshly reinstated executive chairman and chief executive officer Datuk Abu Hanifah Noordin, together with NexG shareholder Siti Nur Aishah Ishak withdrew a lawsuit filed against NexG and six of the seven directors after their mass resignations. Hanifah, who was previously suspended on March 5 pending a review of the group's investments "to allow the committee and its advisers to continue their work without undue influence", was reinstated to his post on March 11.
The seven — Datuk Chong Loong Men, Kunal Tayal, Badrul Hisham Abdul Aziz, Mohamed Fairuz Mohamed Fauzy, Syed Farid Syed Ahmad Al-Attas, Mohd Zafil Ibrahim and Aswath Ramakrishnan — were directors that Hanifah, Siti Nur Aishah as well as Velocity Capital Sdn Bhd, who hold at least 10% of the company's shares, had sought to remove from the board.
Five of the seven directors resigned on March 11, while Kunal had resigned on March 10. Choong quit the board on March 8. This left Hanifah and executive directors Datuk Ab Hamid Mohamad Hanipah and Erna Ismail on the board.
Then businessman Datuk Ishak Ismail and his son, Mohamed Najib Ishak — who emerged as NexG's largest shareholders through Raya Aviation Holdings Bhd on March 4 — were appointed to the board on March 13, together with Michelle Yong Voon Sze, Lt Col (R) Roseli Abdul Gani, Lt Col (R) Khairudin Dahlan, Mohd Azmi Mat Nayan, Datuk Amirudin Abdul Wahab, Muthanna Abdullah and Datuk Anas Alam Faizli.
And the renewed board's first order of business last week was to announce that NexG's past invested in quoted shares were made strategically and in compliance with laws and listing requirements.
Shares in NexG ended half a sen or 1.79% lower at 27.5 sen on Wednesday, valuing the company at RM1.02 billion.