Zetrix AI Faces Legal Action and Financial Crisis Over RM314 Million Unpaid Revenue

A Privatization Model on Trial

In a commentary, the financial crisis at Zetrix AI Bhd and its ongoing revenue remittance crisis are examined, highlighting long-standing Malaysian models of public service privatization.

The origins of Zetrix did not stem from the divestment of a state enterprise, nor can its present financial troubles be pinned on any single government policy. However, the commentary argues that its original business model represents a familiar Malaysian arrangement where private concessionaires collect transaction-based revenue from services citizens previously obtained directly from the state.

Government Demands Millions in Unremitted Road Tax Collections

The government has acknowledged that the company operates collection services across multiple areas of public administration, including the renewal of road tax and licences. Zetrix owes the Road Transport Department (JPJ) over RM314 million in unpaid collections accumulated between May 19 and September 30.

The corporate crisis extends beyond unremitted collections. Transport Minister Anthony Loke detailed the government’s response during Budget 2027 debates, noting that JPJ initiated follow-up actions between May 19 and October 4 by issuing 35 reminder notices and holding four engagement sessions. After repeated warnings, the company submitted a post-dated RHB Bank Berhad cheque dated September 30, valued at RM231 million to settle revenue collected up to August 17, but the cheque could not be honoured.

Terminated Contracts Trigger Civil Action and Sukuk Pressure

JPJ formally terminated its services with Zetrix AI as a revenue collection agent effective October 5 and lodged a police report on October 7. Loke stated that the government is taking civil legal action against the collection agent for failing to settle the total outstanding balance and accrued late-payment penalties.

Concurrent financial pressures are mounting for the firm. A dissolution event has been triggered at Zetrix, presenting a severe hurdle for its RM2 billion sukuk facility following the violation of a shareholder-linked covenant. The company maintains that immediate repayment of the full outstanding amount is not required and that all scheduled payments have been made, while continuing discussions with sukukholders and trustees.

Subsidiary Faces Multimillion Tax Assessment and Civil Suit

Adding to its regulatory liabilities, Zetrix AI’s wholly owned subsidiary, My EG Sdn Bhd, received an additional income tax assessment from the Inland Revenue Board (LHDN) totaling RM353.13 million on October 28. That assessment relates to transfer pricing of RM333.10 million and deemed interest of RM20.02 million for the years of assessment 2021, 2022, and 2023, alongside a civil suit filed by the government against MyEG.

Zetrix AI stated that MyEG is confident in the merits of its position and has filed an appeal before the Special Commissioners of Income Tax while seeking an amicable resolution with LHDN.

While privatization mobilized private capital and introduced managerial disciplines, it also created a patronage-driven framework blending business and politics, leaving the state exposed when private operators fail.

Bypassing Intermediaries

To prevent future revenue leakages, the Transport Ministry and JPJ are revamping the MySIKAP portal and MyJPJ super app to reduce reliance on third-party collection agents. Discussions are underway between the Transport Ministry, the Ministry of Finance, and the Accountant-General’s Department regarding a proposed framework to route state funds straight into Treasury reserves, avoiding middlemen altogether.