After the Crash, Zetrix AI Moves to Take Control of Philippine Venture

Zetrix AI Bhd, the listed Malaysian technology group formerly known as MY E.G. Services Bhd, has entered into a definitive agreement with Next Lion to pay RM130 Mn for its 50% stake in Philippines-based MYEG Ventures. The transaction is structured to increase Zetrix’s effective interest in MYEG Philippines to 74.5% from the existing 49% direct stake, making the Philippine operation a subsidiary upon completion.

The timing has drawn immediate attention from market observers. Zetrix signed the share purchase agreement with Next Lion on September 1, the first trading day after it issued an Unusual Market Activity (UMA) reply to Bursa Malaysia Securities.

In that regulatory filing, submitted on the evening of August 28, the company said no corporate development outside those already announced, and nothing at the negotiation or discussion stage, could explain the market rout. Eventually, a four-day sell-off wiped out nearly two-thirds of Zetrix’s market capitalisation, punctuated by a single-day drop of 30 sen to close at 29.5 sen. 

Under the agreed terms, Zetrix will acquire 15,253,893 shares in MYEG Ventures, representing Next Lion’s entire 50% interest. MYEG Ventures owns 51% of MYEG Philippines, a figure Zetrix later clarified to Bursa Malaysia to correct what it called an inadvertent error in its original announcement, which had erroneously put the figure at 60%.

The underlying ownership arithmetic is precise. Zetrix already owns 49% of MYEG Philippines directly. Buying half of MYEG Ventures gives it an additional 25.5% indirect interest through the latter’s 51% stake, taking its combined effective interest to 74.5%.

Following completion, MYEG Ventures will become a jointly controlled entity of Zetrix, while MYEG Philippines will become a consolidated subsidiary.

The RM130 Mn consideration will be settled through a combination of cash and up to 360,570,558 newly issued Zetrix shares. The exact issue price has not been fixed and will be based on the five-day volume-weighted average market price (VWAP) immediately before issuance. Any portion of the purchase price not satisfied through shares will be paid in cash drawn from internally generated funds. Zetrix expects to satisfy the conditions precedent by the end of the third quarter of 2026.

That structure leaves one critical part of the transaction economics entirely open. Zetrix has fixed the aggregate acquisition price at RM130 Mn, but not the eventual split between cash and equity. Because the share price determines how much consideration can be met through stock, investors do not yet know how much cash the acquisition will consume or how many of the maximum 360.57 Mn shares will ultimately be issued.

Spreading the full consideration across the entire share ceiling implies an issue price of about 36 sen. Priced below that, all 360.57 Mn shares together would be worth less than RM130 Mn, and Zetrix would have to pay the difference in cash.

At Zetrix’s September 2 close of 22 sen, for example, the maximum share issuance would be worth about RM79.3 Mn, leaving roughly RM50.7 Mn to be paid in cash. That remains an analytical illustration, not the eventual transaction mix, because the actual issue price will depend strictly on a future five-day volume-weighted average price (VWAP).

From Public Services to Enterprise Blockchain 

Zetrix began operations in 2000 as an electronic services provider for government and has since expanded into digital services, blockchain and artificial intelligence. Its Layer-1 Zetrix blockchain now sits at the centre of an ambitious push into cross-border transactions, digital identity and government technology across ASEAN.

MYEG Philippines has operated since 2017 as an electronic government-services and payments business. In June, Zetrix said the venture had signed digital-payment agreements involving the Professional Regulation Commission, Bureau of the Treasury, LANDBANK, Philippine Ports Authority and Bureau of Fisheries and Aquatic Resources, extending the government services network it has been building since commencing operations.

But these two entities are quite distinct. Zetrix is not directly buying another 25.5% of MYEG Philippines. It is acquiring half of MYEG Ventures, whose 51% holding in the operating company gives Zetrix an additional 25.5% indirect interest. The transaction, therefore, takes Zetrix from a 49% direct minority position in MYEG Philippines to 74.5% effective exposure, while MYEG Ventures itself remains under joint control.

That makes the acquisition far more consequential than a simple increase in economic exposure. The resulting 74.5% effective interest gives Zetrix majority control of MYEG Philippines and brings the operating company into the group as a consolidated subsidiary.

Timing also matters because Zetrix has been extending its technology ambitions beyond e-government services on which the group was originally built. The company has increasingly pitched its blockchain infrastructure alongside AI and other digital services as tools for public sector and cross-border applications.

In July, that push extended further into the Philippine government’s infrastructure. Zetrix Philippines Inc., My Blockchain Infrastructure Sdn Bhd (a Zetrix joint venture with Malaysian national research and development agency MIMOS Bhd) and the Philippines’ Department of Information and Communications Technology (DICT) signed an MoU to collaborate on a public blockchain based on the Zetrix protocol.

The specific areas identified include cross-border digital-ID interoperability between Malaysia and the Philippines, government-issued digital credentials and trade facilitation. The agreement envisages the Zetrix protocol as the underlying infrastructure for the Philippine public blockchain, although the MoU itself does not establish that a full national rollout has begun.

The acquisition, therefore, links two parallel strands of Zetrix’s Philippine strategy that had previously sat alongside one another: an established government-services and payments operation and a newer attempt to embed its blockchain infrastructure more deeply within government digital systems.

A Regulator That Has Been Here Before

The 60% reporting error is not the first time the factual accuracy of a Zetrix market announcement has been at issue with the exchange.

In July 2025, Bursa Securities publicly reprimanded the company—then still trading as MY E.G. Services Bhd—and fined seven individual directors RM150,000 each. The total was RM1.05 Mn for announcements it found inaccurate, misleading and without a proper factual basis, as well as for failing to correct them promptly.

Group managing director Wong Thean Soon and executive chairman Datuk Norraesah Mohamad were among those fined. While the company stated it would seek a judicial review of the reprimand, the historical friction frames the current error.

Against this backdrop, the current ownership correction matters far beyond basic arithmetic. The true 51% figure emerged only after Bursa queried the transaction announcement, noting that Zetrix’s latest annual report recorded MYEG Philippines as a 49% joint venture. This holding could not logically sit alongside a 60% stake held by an outside partner.

Issuing Into a Falling Market

The open financing architecture adds another variable because Zetrix’s market value has fallen sharply since the deal terms were originally structured. The stock closed 17% lower at 22 sen on September 2 after falling as much as 15% to 22.5 sen in the minutes immediately after trading resumed from a temporary one-hour halt. This marked a fourth straight trading-day decline and its lowest absolute level in about 12 years.

More than 825 Mn shares changed hands during the rout. Over those four volatile sessions, Zetrix lost about two-thirds of its market capitalisation, or about RM3.46 Bn, leaving the company valued at approximately RM1.77 Bn.

The heavy selling came as Wong grappled with the fallout from a margin call. He told analysts and investors he needed time to resolve the forced sale. Days earlier, as the collapse began, he had told The Edge that “all remains good at Zetrix, and there is no issue with the company,” as far as management was concerned.

Bourse filings reveal that Wong disposed of 99.8 Mn shares at 29.9 sen on August 28 for about RM29.8 Mn. Through his private vehicle Asia Internet Holdings Sdn Bhd, he also sold 4.29 Mn shares at 60.6 sen on August 27 and 52.3 Mn shares at 48 sen the following day, for a combined RM27.7 Mn. Wong remained Zetrix’s largest shareholder with a 27.5% interest after the disposals, down from about 29.25%.

Bursa Malaysia issued an unusual market activity query on August 28 after the stock hit limit down and intraday short selling was suspended. Zetrix replied that it saw no basis for rumours linking the company to former human resources minister M Saravanan, who faced three corruption charges and pleaded not guilty the same day.

The consideration shares are not the only equity issuance currently before shareholders. Zetrix proposed a private placement of new ordinary shares on August 13 and returned to the proposal on August 28, the same day it told the exchange that nothing was pending.

Because the consideration-share price is still to be fixed, the sharp fall in Zetrix’s stock makes the eventual cash-equity mix highly critical. The 360.57 Mn share ceiling limits how much stock the company can deploy. If the eventual issue price remains materially below the 36 sen required to cover the entire RM130 Mn through equity, the financial difference will have to come entirely from internally generated cash.

For Zetrix, the RM130 Mn deal is, therefore, less about entering the Philippines than about fundamentally changing the nature of an existing position. It already has an established local operating history, regional government relationships and a payments platform.

What it is purchasing now is greater operational control over the business through which it hopes to turn those relationships into a broader digital services franchise.

Control Is Easier to Measure Than the Payoff

Bursa explicitly asked Zetrix for the quantitative basis of the purchase consideration. The company stated the price was based on an internal valuation of MYEG Ventures and the percentage being acquired, while its board also considered MYEG Philippines’ historical performance, five-year projections, business prospects and growth potential, the strategic value of strengthening its Philippine operations and potential synergies.

However, the regulatory disclosure does not provide enough of the underlying valuation methodology, forecasts or baseline assumptions for investors to reconstruct or verify the RM130 Mn price tag independently.

Nor has Zetrix published any revenue, profit or net asset figures for MYEG Ventures itself, the specific company whose shares it is buying. The internal valuation underpinning the price is not one outside shareholders can cross-examine against disclosed corporate accounts.

Filings identify the vendor by name alone. Zetrix has not stated where Next Lion is incorporated or who controls its operations.

That is where execution risk sits. The July agreement with the Philippine government is an MoU, not evidence that a national blockchain rollout has already generated material revenue. The acquisition gives Zetrix more control over its local platform, but it does not by itself guarantee that government collaborations will translate into transaction volumes or earnings.

Also, the subsidiary status does not create value on its own. The investment case rests entirely on whether greater operational control allows Zetrix to turn MYEG Philippines’ government relationships and existing payments infrastructure into a substantially larger commercial business.

The deal will ultimately be judged on two variables that consolidated accounting control cannot answer. The first is whether Zetrix can convert its 74.5% effective interest into materially higher earnings. The second is how much cash it must commit to get there. Both questions now sit with a board the exchange has already reprimanded once for what it said in public, and with shareholders who learnt the size of the stake being bought only after the regulator asked.