Prestariang SKIN files US$177 million claim against Malaysian government

• In December 2018, PSKIN received conformation of the termination by way of expropriation
• Has undertaken extensive technical studies and works on the project since 2014

PRESTARIANG SKIN Sdn Bhd (PSKIN), a subsidiary of Prestariang Bhd on April 15 filed a legal claim totalling US$177 million (RM732 million) against the Malaysian government for the unilateral termination of the “Sistem Kawalan Imigresen Nasional” or SKIN project by way of expropriation.

PSKIN secured a 15-year concession on Aug 9, 2017 to design, deliver, continuously maintain and provide scheduled upgrades for a new and much improved immigration and border control system for the Immigration Department of Malaysia. This would replace the existing Malaysian Immigration System (MyIMMS) but with added functionalities.

Under the Concession Agreement (CA), PSKIN was to receive approximately RM3.5 billion over the 15-year concession period, subject to the entire capital expenditure being privately funded by PSKIN. Payment to PSKIN by the government would only commence after SKIN is completely operational.

In December 2018, PSKIN received a letter from the Home Ministry confirming the Cabinet’s decision to terminate the SKIN project by way of expropriation. The termination took effect on Jan 22, 2019.

According to its Bursa Malaysia filing today, PSKIN commented it had undertaken extensive technical studies and works on the project since 2014 and a substantial amount of expenses have been incurred. The company had also entered into numerous third-party contracts for the purpose of executing the SKIN project.

In an interview with DNA, the founder of Prestariang, Dr Abu Hassan (pic) shared that one of components of SKIN was to be its risk assessment engine to help flag potential troublesome visa applicants that will be implemented in 37 embassies around the world. "It's about how you put intelligence around data," he said.

The parties had engaged in a few rounds of negotiations but were unable to reach an amicable settlement on the quantum. As a last resort, the Board of Prestariang is now litigating for its contractual payment based on the formula provided in the CA.