Datuk Seri Ivan Teh: Fusionex Shuts Down After Court Order

Introduction: The End of a Malaysian Tech Icon

In a stunning development that has sent shockwaves through Malaysia’s technology industry, Fusionex Group, once hailed as a regional leader in artificial intelligence and data analytics, is shutting down following a court order. The decision to wind up the company, confirmed on December 17, 2023, affects over 500 employees and marks the collapse of one of Malaysia’s most celebrated tech success stories.

The order, sought by Japanese conglomerate Hitachi Ltd, comes just three years after it acquired Fusionex in a move once touted as a major boost for Southeast Asia’s data-driven innovation ecosystem. Now, that vision has disintegrated amid missing records, management resignations, and financial uncertainty.

The Announcement: Winding Up 13 Companies

Documents reviewed by The Edge reveal that Fusionex’s new CEO, Hiroyuki Kumazaki, announced the winding-up of Fusiotech Holdings Sdn Bhd—Hitachi’s Malaysian subsidiary overseeing Fusionex—and 12 other related companies under the group.

Kumazaki, appointed on December 6, 2023, cited an “inadequate handover of records and information by the previous management” as the key reason for the shutdown. His statement read:

“This decision stems from the insurmountable challenges arising from the inadequate handover of records and information by the previous management, which effectively left Hitachi without any form of information relating to the management, operations, and continuity of the business of Fusionex Group.”

In other words, Fusionex’s new leadership inherited a company stripped of critical data, unable to confirm its financial position, contracts, or even day-to-day operations.

Without proper documentation, Hitachi determined that the only viable course of action was to liquidate the group and allow court-appointed liquidators to manage the remaining assets.

The Fallout: 500 Jobs in Jeopardy

Fusionex’s collapse will directly impact more than 500 employees, spanning roles in data science, software engineering, research, training, and innovation.

While the company has not issued a formal “stop-work order,” a senior employee confirmed to The Edge that Fusionex is “winding down operations” pending the court’s appointment of official liquidators.

“They are still employed until the liquidation happens, until a court assigns a liquidator. We don’t know when that will be. It depends on the courts hearing and when they assign the liquidator,” the employee said.

He added that uncertainty and anxiety had gripped staff since news of the winding-up leaked. However, many employees—highly skilled in analytics and AI—are expected to find new roles quickly in Malaysia’s competitive tech job market.

“There are a lot of people who are worried about the uncertainty. But given their skills, most would have no issue getting a job soon,” he added.

Hitachi Steps In: Employee Compensation and Support

To soften the blow, Hitachi has pledged full December salaries for all employees and a goodwill payment equivalent to one month’s January salary. The Japanese parent company has also set up an internal support network to help affected employees find new employment opportunities in the technology sector.

According to internal documents, the management team is coordinating job placement assistance for staff, reaching out to partner firms and industry contacts to ease the transition.

This gesture underscores Hitachi’s intent to mitigate human impact while maintaining its reputation as a responsible global employer—even as it deals with the fallout from Fusionex’s implosion.

The Roots of the Crisis: A Troubled Transition

The current crisis can be traced back to early December 2023, when the previous senior management team—including Datuk Seri Ivan Teh, Fusionex’s founder and Group CEO—resigned abruptly.

Ivan Teh, who won EY’s Technology Entrepreneur of the Year Malaysia award in 2014, was widely regarded as the face of Malaysian AI innovation. His sudden exit, along with key executives, blindsided Hitachi and left a power vacuum in the company.

Kumazaki, brought in by Hitachi as the new CEO on December 6, discovered that essential management records were missing or inaccessible. This included financial ledgers, client contracts, HR data, and intellectual property documentation.

Hitachi’s subsequent internal audit confirmed that no formal handover had taken place before the management’s departure.

“The previous senior management departed the company immediately without any form of handover of the management and the operations. In addition, all information relating to the continuity of Fusionex operations and business was not shared before or handed over during their departure,” the company stated.

This left Hitachi unable to ascertain the group’s financial health or even verify ongoing projects, prompting an immediate risk assessment that culminated in the winding-up decision.

What the Court Order Means

The court order to wind up Fusionex Group means that its 13 subsidiaries—including those dedicated to training, innovation, and R&D—will be dissolved under judicial supervision.

A court-appointed liquidator will take over the company’s affairs, identify remaining assets, settle debts, and manage any ongoing legal disputes. The process could take months, or even years, depending on the complexity of Fusionex’s operations.

For now, the company’s day-to-day operations have effectively halted. Employees remain on payroll until liquidation begins, but most functions—such as client servicing, research, and software development—have ceased.

A Legacy of Innovation—and Missed Opportunities

Fusionex’s demise is particularly striking because it was once a Malaysian success story. Founded in 2009, the company grew rapidly, earning regional recognition for its big data, analytics, and AI-driven software solutions.

Its clientele included major corporations, government agencies, and global firms seeking enterprise analytics platforms. Fusionex positioned itself as a Southeast Asian alternative to Western tech giants, providing localized innovation at competitive prices.

At its peak, Fusionex was valued at over RM 1 billion, with hundreds of skilled engineers and data scientists working across offices in Malaysia, Singapore, the UK, and the United States.

In 2017, the company made headlines when it voluntarily delisted from the London Stock Exchange’s AIM market, just five years after an oversubscribed IPO. The decision was framed as a strategic move to focus on long-term private growth without the pressures of quarterly reporting.

However, critics later argued that the delisting signaled governance weaknesses—a lack of transparency that may have foreshadowed today’s crisis.

The Hitachi Acquisition: Hope Turned to Turmoil

When Hitachi Ltd acquired Fusionex in 2020, optimism was high. The Japanese conglomerate wanted to strengthen its digital business arm through the acquisition, leveraging Fusionex’s cloud and analytics expertise to serve over 11,000 SMEs in Asia.

The acquisition led to the formation of Fusiotech Holdings Sdn Bhd, a Hitachi-owned entity headquartered in Malaysia. Fusionex’s management team, including Ivan Teh, retained operational control, while Hitachi installed non-executive directors to oversee governance.

Initially, the partnership seemed promising. Hitachi envisioned combining its global infrastructure with Fusionex’s local agility to drive innovation across Southeast Asia.

However, tensions reportedly surfaced over transparency, internal controls, and financial reporting.

By mid-2023, Hitachi’s audit committee requested detailed financial statements and operational data from Fusionex’s management. According to sources, the team failed to provide sufficient documentation, citing a supposed “government directive” that restricted sharing certain data with foreign entities.

Hitachi’s legal advisors later found that no such directive existed. The standoff escalated, culminating in Hitachi’s December 2023 winding-up petition.

Inside the Collapse: The Employee Perspective

Fusionex employees describe the past few months as chaotic and demoralizing.

“It was like watching a plane descend slowly,” one former engineer told The Edge. “We could see things weren’t normal—sudden resignations, missed meetings, unexplained delays in projects—but no one expected the company to actually shut down.”

Another employee, part of the data engineering division, said communication broke down completely after management’s departure:

“There was no leadership left to give direction. The new team came in, but they didn’t have access to systems or financial records. It was a total blackout.”

Despite the uncertainty, employees praised Hitachi for its swift intervention and fair compensation, noting that the parent company’s response prevented panic from spreading further within Malaysia’s tech sector.

Industry Reaction: Shock and Reflection

Fusionex’s closure has reverberated across Malaysia’s tech ecosystem. For years, the company was viewed as a national champion—proof that local talent could compete globally.

The news of its collapse has triggered discussions about corporate governance, investor oversight, and the fragility of tech startups dependent on founder-led leadership.

Industry veteran Dr. Mohd Nadzri, an independent digital transformation consultant, said the Fusionex case underscores the importance of strong governance structures post-acquisition:

“When large companies acquire startups, there must be clear transition plans and accountability mechanisms. This incident shows what happens when knowledge and control remain concentrated in a few individuals.”

Others warn that the incident could dent investor confidence in Malaysian tech ventures, particularly among foreign buyers wary of opaque management practices.

The Bigger Picture: A Lesson in Accountability

Fusionex’s collapse raises broader questions about Malaysia’s digital economy strategy. The government has invested heavily in positioning the country as an AI and data analytics hub through initiatives under Malaysia Digital Economy Corporation (MDEC) and MyDigital Blueprint.

But for international investors, the Fusionex scandal may highlight governance risks that need addressing before Malaysia can truly compete as a global tech destination.

Legal experts note that investigations into possible misconduct or record tampering could follow once a liquidator is formally appointed. If evidence emerges that management failed to fulfill fiduciary duties, civil or criminal proceedings could ensue under the Companies Act 2016.

Looking Ahead: What Happens Next

The court will next move to appoint official liquidators to handle Fusionex’s assets and obligations. Their tasks include:

• Recovering remaining financial assets and intellectual property.
• Paying outstanding debts and employee dues.
• Investigating possible mismanagement or misuse of company funds.

Given Fusionex’s complex structure—with multiple subsidiaries, overseas entities, and government-linked projects—the liquidation process could take a year or more.

For Hitachi, the priority will be to salvage its reputation and reassure clients and investors that its regional digital operations remain stable despite the collapse.

Conclusion: The Fall of a Tech Trailblazer

The shutdown of Fusionex marks the end of an era for Malaysian technology entrepreneurship. Once seen as a beacon of innovation and self-made success, the company now stands as a cautionary tale of how governance lapses and poor handovers can destroy even the most promising ventures.

For Datuk Seri Ivan Teh, the founder who built Fusionex from scratch and sold it to one of the world’s largest technology firms, the coming months may bring intense scrutiny as investigators unpack what went wrong.

Meanwhile, for Malaysia’s tech ecosystem, Fusionex’s downfall offers a sobering reminder: in an industry built on data and transparency, trust remains the most valuable currency of all.

Written by

Nancy Drew

Updated

3 months ago