On 24 August 2026, Zetrix AI Bhd (KLSE: ZETRIX) reported its best half-year ever. First-half net profit rose 42% to RM540.6 million on revenue of RM813 million. The board declared an interim dividend. The shares closed at RM0.655, valuing the company at RM5.28 billion.
Eight weeks later, the shares of Zetrix traded at RM0.05. The company, better known for most of its life as MyEG Services, has lost its long-held role collecting road tax for the Road Transport Department (JPJ). It was then reported that Zetrix owed JPJ RM314 million in collections it did not pass on. Police and the MACC are investigating, and Zetrix’s auditor has resigned. The dividend it declared in August was withdrawn, and it is in breach of a covenant on a RM2 billion sukuk, which could make RM2.16 billion repayable at once.
This article and analysis will answer two questions. How does a company reporting more than RM500 million in half-year profit end up unable to pay a government agency, and could investors have seen it coming?
What went wrong?
Not a single event broke Zetrix. Instead, four major weaknesses built up over several years, then set each other off within a few weeks.
A cash-generating business turned capital-hungry
For two decades, MyEG ran a simple yet lucrative cash generative business. It processed government transactions online, such as road tax and foreign worker permits, and took a fee. In 2020 it had a net cash surplus of RM63.3 million.
Then it pivoted to blockchain and AI under the Zetrix brand. It was estimated Zetrix spent more than RM3 billion on the new frontier. And rather than expensed, it was capitalised as “development costs” on the balance sheet.
Now, this is not to criticise capex spending when a new AI tailwind emerges. But while hyperscalers were making massive data centre and chip purchases, Zetrix’s frenzied spending on the AI frontier was vague and intangible.
Although the blockchain and AI segment grew fast on paper, the revenue came from overseas customers the company does not name.
Debt grew
When spending runs ahead of incoming operating cashflows, something has to fund the difference.
For Zetrix, as for most companies, it was debt.
By the end of 2025, it had net debt of RM1.2 billion. By June 2026, total borrowings had ballooned to RM2.19 billion.
The largest item in that mounting debt pile is a RM2 billion sukuk programme set up in November 2022.
The founder’s pledged shares made the house of cards taller
Co-founder and managing director Wong Thean Soon (TS Wong) held nearly 30% of the company.
But most of his shares were also pledged as security for loans. He was granted several extensions to meet margin calls, but when the extensions ran out, pledged shares were force sold, and the stock halved in a day on 28 August 2026. The forced sale pushed prices lower and triggered a chain reaction of further margin calls.
This would have been Wong’s personal problem, except for one clause. The sukuk terms require Wong to remain the company’s largest shareholder. Once the forced selling cut his stake to below 2%, the company was in breach. And without a waiver from sukukholders, the trustee can demand RM2.16 billion in principal and future profit payments at once.
The core business and moat were lost
The most damaging event concerns the old MyEG business, not the new one. Zetrix was required to pass on road tax and licence fees to JPJ within one working day. From 19 May 2026, it did not. By 30 September the arrears reached RM314 million.
Transport Minister Anthony Loke said the government sent repeated reminders, and that a RM231 million cheque dated 30 September was stopped by Zetrix before it cleared. On 5 October JPJ suspended Zetrix and its subsidiary MyEG Sdn Bhd as collection agents.
Zetrix says it has sent the government a proposal to settle. Loke wants the arrears paid first, and on 27 October told Parliament the government is taking legal action to recover the money.
The company has not said why it held back the money. The timing, starting about a month before the first margin call, suggests a cash squeeze. It’s an inference, not a finding.
Why couldn’t the profits save it?
Back to accrual accounting 101. Reported profit and cash are two different things. Capitalising development cost boosts reported profit in the short term, since cost goes onto the balance sheet rather than being expensed immediately in the income statement.
When a company that earned RM870.7 million in FY2025 struggles to pay RM314 million, it suggests the cash went straight back out the door on development.
The warning signs
Most of what broke Zetrix was in its own accounts before 28 August. None of it proved or foretold an impending collapse. But when strung together, these signs told investors the reported profit deserved a heavy discount.
Development costs ballooned significantly in just over 5 years and are clubbed under intangible assets. The auditor has in fact flagged them as a key audit matter every year since 2021.
The question investors could have asked: if the spending was producing revenue, why was so little being amortised, while the balance kept climbing and was still described as still under development?
And with the latest RM3.73 billion in intangible asset portion stripped out, tangible net assets will fall to just RM0.08 per share.
On its own, this observation is not a red flag. But when combined with the other factors, savvy investors would have had a hunch something was not right.
Where it stands, and what to watch
At RM0.075 per share at Monday’s close, Zetrix’s market cap stands at RM568.03 million.
Last week, it was at RM0.05 per share. Against all of this are RM2.19 billion in borrowings and RM314 million owed to JPJ. The company might still be holding on to cash and cryptocurrencies, but how much of that can be turned into available funds is a big question mark.
It’s too early to write Zetrix off. While the police and the MACC are investigating, nobody has been charged. For a turnaround, a few things need to happen. The next sukukholders’ meeting needs to reach a breakthrough, and Zetrix needs to cough up the money that it owes to JPJ.
And if the Q3 report, which comes out end November, points to a turnaround, then we might see a euphoric share price rally.
But the odds are stacked against this outcome. With the police now investigating the unremitted collections, the share trades at pessimistic levels, with market participation giving the stock prices what looks like a “dead cat bounce”.
For existing Zetrix shareholders, it’s either a total loss or a miraculous revival.
For those tempted to capitalise on the dead cat bounce, well, no comments from me. Share your successful trades in the comments, if any?
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