ON March 28, the health minister said the government was still negotiating with MySJ Sdn Bhd over the terms of a software licence agreement for the MySejahtera app.

It appeared the health minister was responding to revelations on the website CodeBlue quoting court documents filed over a dispute among MySJ shareholders.

MySJ has four shareholders: Revolusi Asia Sdn Bhd (RA), which has an 81.4% share;  Hasrat Budi Sdn Bhd (HB) (10%), P2 Asset Management Sdn Bhd (7.1%) and Ganesan Shanmugam (1.5%).

In the court documents, it is claimed that in October 2020, Entomo Malaysia (formerly known as KPISoft Sdn Bhd) entered into a licence agreement with MySJ to transfer ownership of the intellectual property for MySejahtera and the app’s software licence to MySJ for RM338.6 million in a five-year deal.

P2’s claim, as disclosed in its statement of claim filed in the High Court on November 24, 2021 which is available publicly, was that it entered into a share sale agreement (SSA) with RA in December 2020. RA, at that point, was the legal and beneficial owner of 100% of MySJ. 

In return for RA selling 10% of the shares it held in MySJ, P2 is supposed to facilitate a letter of award (LOA) from the government to MySJ in respect of a proposal for a public private partnership (PPP) for the continued use of the MySejahtera app within 60 days from the date of the SSA (by  March 2, 2021) or within an extended period of another 30 days (April 2, 2021). The PPP ending in 2036 envisioned a super app with digital health, commerce, and payment facilities on MySejahtera where the data would be commercialised. 

P2 would pay RA the purchase consideration for a 10% share in MySJ in three tranches: RM10 million within seven business days from December 31, 2020, RM9.2 million within 21 business days from December 31, 2020, and RM76.8 million within 90 business days from the date of receipt of the LOA, altogether totalling RM96 million. Effectively it appears that RA had valued MySJ at RM960 million for 100% of the company in the SSA with P2.

The National Security Council (NSC) issued a letter to MySJ on May 21, 2021. 

In the suit, P2 argued that the NSC letter, although not termed an LOA, amounted to an LOA in accordance with the SSA and that the letter “has achieved what the LOA has intended to achieve or more.”

Entomo Malaysia and RA argued in their court response that P2 failed in obtaining the LOA as RA did not consider the NSC letter as P2 having achieved the objective of obtaining the LOA as described by the SSA.

On September 7, 2021, RA terminated its SSA with P2.

P2 filed a claim on November 24, 2021 against Entomo Malaysia, RA and MySJ alleging breach of the SSA.

Based on the above revelations, it appears necessary for the health minister to investigate and reveal to the public how P2, a company formed only two months before the signing of the SSA and which has directors, who are all below 30 years old with no known experience in the corporate sector, could brazenly represent to Entomo and RA that it could help to facilitate a LOA from the government to MySJ.

It will be interesting to know how and from where P2, a company without a track record and an operating business, received the funding for it to pay a sum of RM96 million to RA.

Were the shareholders and directors of HB and Ganesan Shanmugam, two other shareholders of MySJ, aware of the terms of the SSA between RA and P2 and the requirement under the SSA for P2 to procure a LOA from the government on MySJ’s proposal for a PPP with the government? Did RA sell its shares in MySJ to HB and Ganesan Shanmugam based on the same valuation that it sold to P2?

MySJ merely owns the intellectual property of MySejahtera and its software licence to develop and test and support the app. And the app only has one single user: the government of Malaysia.

As the health minister has clearly stated, the data belong to the government of Malaysia.

Without the ability to commercialise the data, MySJ’s value is based only on the development costs of the software, which it owns.

Was the sale price of RM338.6 million based on the cost of the app development? – March 30, 2022. 

* FLK reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.