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Economy

Malaysia rejects $1.9 billion passport-supplier deal

Malaysia’s government has rejected a potential RM7.5 billion (US$1.9 billion) acquisition of Datasonic Technologies, the supplier of the country’s passports and national identity cards.

Source: The Business Times Singapore · August 23, 2026 at 3:01 AM · AI-assisted report

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Malaysia rejects $1.9 billion passport-supplier deal
Image: businesstimes.com.sg

SINGAPORE, 23 AUGUST 2026 —

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Malaysia rules out US$1.9 billion takeover of passport supplier

Market Impact

Datasonic Technologies, the company that supplies Malaysia’s passports and national identity cards, will not be acquired by the government, the National Security Council (NSC) confirmed on Saturday, 22 August. The decision comes after a brief consideration of a potential purchase worth RM7.5 billion (US$1.9 billion) that was floated by Datasonic’s parent company, NexG.

The NSC statement, released late on Saturday, said the government had decided against the acquisition “to preserve the security and sovereignty of citizens’ identities while ensuring value for public spending.” The council added that it would continue to explore other measures to safeguard identity data and maintain the integrity of the national identity system.

Datasonic’s parent, NexG, had announced on Friday that the government was “considering” a takeover. In a filing with Bursa Malaysia, NexG said the Ministry of Finance had requested an indicative price for a possible acquisition during a meeting on 24 July. The request was made verbally, and no written document was issued, the filing noted. The ministry declined to comment on the matter.

The company’s valuation of Datasonic at RM7.5 billion was described by NexG as “not an independent valuation.” NexG’s management has repeatedly highlighted that Datasonic is the core business of the group and the main contributor to its revenue and earnings. A disposal of the unit could affect NexG’s operations and even its continued listing on Bursa Malaysia, the company warned.

Datasonic currently holds contracts to supply passports and identity cards to the Malaysian government until the end of 2032. The agreements are collectively worth about RM2.46 billion. The company’s role in the national identity infrastructure has made it a strategic asset, prompting the government’s initial interest in a takeover.

The dispute surrounding NexG has attracted additional scrutiny. Former executive Victor Chin has identified the company as the target of an “attempted hijacking” by labour tycoon Aminul Islam. Chin described the situation as part of a “corporate mafia” involving law enforcement agencies. The allegations have raised concerns about the integrity of corporate governance within the group.

The decision to rule out the takeover follows a broader context of Malaysia’s focus on protecting critical national infrastructure. The government has been reviewing its approach to strategic assets, particularly those linked to personal data and national security. The NSC’s statement underscored the importance of maintaining a and secure identity system, especially in light of increasing cyber threats and the growing reliance on digital identity platforms.

Stakeholders in the industry have reacted to the decision. A spokesperson for the Ministry of Finance said the government remains committed to ensuring that public spending delivers value and that the integrity of the national identity system is upheld. “We are exploring alternative ways to secure the system and protect citizens’ data,” the spokesperson added.

NexG’s board has expressed concern that the potential sale could destabilise the company’s core operations. “Datasonic is integral to our business model,” the board said. “Any divestment would have significant implications for our revenue stream and could jeopardise our listing status on Bursa Malaysia.”

The move also has implications for the broader Malaysian economy. The passport and identity card sector is a critical component of the country’s digital infrastructure, supporting e‑government services, border control, and financial inclusion initiatives. A stable and secure identity system is essential for maintaining investor confidence and facilitating cross‑border trade.

Looking ahead, the government has indicated that it will continue to monitor the situation and assess other options to safeguard the national identity system. The NSC’s statement suggested that future measures could include enhanced regulatory oversight, investment in cybersecurity, and collaboration with private sector partners to strengthen the infrastructure.

In the regional context, Malaysia’s decision aligns with a trend among Southeast Asian governments to assert greater control over strategic assets that underpin national security and digital identity. Countries such as Singapore and Indonesia have similarly tightened oversight of companies involved in identity management and data protection.

The outcome of this case will likely influence future policy decisions regarding the acquisition of critical infrastructure assets. While the government has ruled out a direct takeover of Datasonic, it remains open to other forms of partnership or investment that could enhance the security and resilience of Malaysia’s identity system.

In summary, Malaysia has decided not to acquire Datasonic Technologies, despite earlier indications of a potential RM7.5 billion purchase. The decision reflects the government’s priority to protect citizens’ identities and ensure value for public spending. The case highlights the complex interplay between national security, corporate governance, and public investment in a rapidly digitalising economy.

Related: Bursa Malaysia · Singapore

Reporting based on The Business Times Singapore. Figures and claims are subject to revision as the story develops. DomainFork publishes editorial context, not investment advice — see our editorial standards.