The government agreed to allow Bestinet Sdn Bhd to raise its fees to foreign workers from RM100 to RM215 per person after the company slapped the government with a legal letter demanding RM1.63 billion.
The letter was sent before the company’s contract for the Foreign Worker Central Management Service (FWCMS) was renewed, the Public Accounts Committee heard.
The FWCMS is a system used by the government to process foreign workers entering Malaysia and is owned by Bestinet.
In September the government extended the company’s contract by six years to Jan 31, 2031, allowing Bestinet to charge workers RM215 for the issuance of each Epass (work permit), for an estimated 2.5 million foreign workers.
The Public-Private Partnership Unit under the Prime Minister’s Department approved the rate, higher than the RM100 charged before.
Demand had strong legal basis
Home Ministry official Hebat Hisham Mohd Yusoff said the fee hike was related to the letter of demand served to the government by Bestinet.
“The government agreed because there was an RM1.63 billion claim from the company. The claim was based on the argument that it (Bestinet) was not allowed to collect anything (from workers) in the duration of the contract from 2018 until May 31, 2024.
“We consulted the Attorney-General’s Chambers (AGC) and they were of the view that the company has a strong case and there is a basis for the claim.
“Thus, we sought a middle ground and agreed upon the RM215 fee for the issuance of each Epass,” the ministry’s deputy division secretary (Immigration Affairs) said.
Hebat told the PAC that Bestinet had sought compensation of RM1.63 billion based on a letter of acceptance (LOA) signed by the government with the company for the development of the FWCMS between 2018 and May 31, 2024.
The cost was calculated based on the six-year tenure of the contract, during which time the company said it did not charge the RM100 per pass that it issued to 2.2 million foreign workers.
The sum also included a four percent interest on loans provided by the company.
However, the PAC in its previous meetings noted that the LOA states that the FWCMS was supposed to be at no cost to the government.
Even so, Hebat said in consultations with the ministry, the AGC found the company’s claims to be valid.
“Thus we (the government) agreed on the RM215 rate to avoid the government from being dragged to court,” said Hebat.
Exclusive rights
Hebat also told the PAC that under the newly signed six-year contract, the FWCMS will provide 15 modules for the whole Epass ecosystem that start from the job advertisement for foreign workers and end with the Check Out Memo when workers leave the country.
Bestinet will also have the monopoly of issuing the Epass, as MY EG Services Bhd (MYEG)’s contract will not be renewed after Feb 1, 2025, the PAC was told.
MYEG has a contract to issue the first-year Epass.
This prompted the PAC to urge the government officials to do a proper notification and termination service accordingly on MYEG to avoid similar cases where the government might face a similar legal predicament as it had with Bestinet.
“Once it (the contract) has been reviewed, then a decision was made to exercise the option of not extending it for another year, right?
“Also, make sure we have the right reasons on it so that the PAC does not have to hold another (similar) proceeding on it, then (the government) has to say we renewed the contract to avoid getting sued.
“And then we have to give MYEG another contract. We don’t want this to happen,” said PAC member Syahredzan Johan.
Surprised by deal extension
Syahredzan was also taken aback that the Bestinet deal was signed on Sept 3, 2024, granting the company the rights to develop, supply, provide, and maintain the FWCMS.
This is despite the PAC’s ongoing proceedings and issues flagged by the auditor-general.
“I am a bit surprised to know that this contract has finally been signed as previously there are indications of several issues that obstructed its signing.
“Yet, now (we) have been informed that it has been signed,” the Bangi MP said after Home Ministry secretary-general Awang Alik Jeman informed the PAC of the signing of the contract.
In response, Awang did not address the speedy decision and merely said the deal had gone through the due process and cabinet approval.
“Based on the cabinet meeting notes presented by the chief secretary on Aug 14, 2024, the contract extension was for six years. Yes, six years,” he said.
Govt collecting on behalf of Bestinet
Last Friday, Malaysiakini reported that the PAC estimates that by charging each migrant worker RM215, Bestinet could make up to RM3.3 billion from the deal.
However, Bestinet insists the government will not have to pay Bestinet and that the RM215 fee is collected by the Immigration Department from the worker on behalf of Bestinet.
“The government acts as an intermediary in the fee collection before it is passed to us. No additional charges are imposed on the government.
“The ones who will be paying are the employers seeking migrant workers. So, the ‘no cost to the government’ condition still applies,” Awang added.
He also said the estimated RM3.3 billion is overblown because it is estimated according to the number of migrant workers allowed in Malaysia.
“That doesn’t mean Malaysia pays 2.5 million migrant workers yearly,” he said.
Bestinet founder wanted in Bangladesh
Businessperson Aminul Islam Abdul Nor founded Bestinet. He previously divested from Bestinet but recently regained a small portion of the shares.
Aminul also owns shares in JR Joint Resources Holdings Sdn Bhd, which in turn owns part of Bestinet.
Earlier this month, it was reported that the Bangladeshi government sent Putrajaya a notice seeking the arrest and extradition of Aminul for alleged money laundering.
Aminul denies the allegations. - Mkini
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