Zetrix AI Faces Potential Breach of RM2 Billion Sukuk Covenant

Zetrix AI Bhd, the Malaysian AI and blockchain company, has seven days to fix a problem in its RM2 billion Sukuk Wakalah programme after its founder lost his place as the biggest shareholder, according to a Bursa Malaysia filing reported by The Star on Oct 16. Banks force-sold shares held by managing director Wong Thean Soon, leaving his combined stake at 1.895% as at Oct 15, The Star reported.

Zetrix AI Bhd faces a potential breach of a covenant in its RM2 billion Sukuk Wakalah programme after founder Wong Thean Soon stopped being its single largest shareholder when banks force-sold his shares. It must remedy the potential breach by Oct 22, 2026; if it doesn’t and no waiver follows, it could face accelerated repayment, according to BusinessToday Malaysia.

What the covenant requires

The sukuk programme dates from November 2022 and carries a key-shareholder condition, according to The Edge Malaysia. The Edge reported that the issuer must ensure Wong does not sell, transfer, or otherwise dispose of his shares in a way that ends his position as single largest shareholder without the consent of the sukuk holders. In its Bursa Malaysia filing, quoted by The Star, the company said: “Consequently, the company is therefore considered to be in potential breach of covenant under the Sukuk Wakalah Programme which requires Wong to remain, directly or indirectly, the single largest shareholder of the company.”

How the stake fell

MARC Ratings said in September that Wong’s shareholding had dropped to 12.1%, made up of 6.5% direct and 5.6% indirect, from 30%, largely triggered by margin calls, according to The Star’s Sept 18 report. MARC added that a further reduction could lead to a covenant breach. By Oct 15, The Star reported, citing the company’s filing, his combined direct and indirect stake was 1.895%.

What happens next

The company must remedy the potential breach within seven days, which sets the Oct 22 deadline, according to The Star. Malaysiakini reported that the alternative is to seek the sukuk holders’ consent through an extraordinary resolution. BusinessToday Malaysia reported that if the breach isn’t resolved by Oct 22 and a waiver isn’t secured, Zetrix AI could face accelerated repayment of RM2 billion in outstanding principal and RM164.5 million in future coupon obligations. Headlines in The Edge Malaysia and The Malaysian Reserve put the potential repayment at about RM2.16 billion.

The company said it is “currently in discussions with the sukuk trustee in relation to the aforesaid matter” and will make further announcements on material developments. Its own wording is “potential breach”, and no outcome from those talks had been reported as of Oct 16.

Rating watch and balance sheet

MARC placed its AA-IS rating on Zetrix AI’s Islamic Medium-Term Notes programme of up to RM2 billion on MARCWatch Developing, The Star reported in September. The Edge later reported that MARC revised the watch to negative from developing. MARC said borrowings rose to RM2.2 billion as at end-June 2026 from RM160.5 million in 2021, channeled toward development spending on AI and blockchain platform services, per The Star. NST reported cumulative development expenditure of RM3.7 billion, equal to 56% of total assets, alongside first-half 2026 net profit of RM540 million. The Halal Times has covered Zetrix’s AI products in earlier reports.

Separately, The Edge reported that Zetrix AI and MyEG were suspended as Road Transport Department collection agents from Oct 5. NST reported outstanding Road Transport Department remittances of RM314 million.

Market reaction

Trading in the shares was halted at 9:19am on Oct 16, The Star reported. Malaysiakini reported that the shares fell 7.69%, or half a sen, after trading resumed at 10.19am, as 235 million units changed hands. By the close, NST reported in its 5:09pm story, the stock had hit a low of 5 sen and finished at 5.5 sen, down 15.38% from 6.5 sen on Thursday, with nearly 255 million shares traded. NST said the shares are down 93.3% from an April high of 89.5 sen and put market capitalization at RM444.33 million.

The next fixed date is Oct 22, when the seven-day window to remedy the potential breach closes. Until then, the talks with the sukuk trustee are the development to watch, along with any waiver request to sukuk holders.

Frequently Asked Questions

What is a key shareholder covenant in a sukuk?

It is a term in the sukuk documents that ties the issuer to a named person’s ownership position. The Star reported that Zetrix AI’s Sukuk Wakalah programme requires founder Wong Thean Soon to remain, directly or indirectly, the single largest shareholder. The Edge Malaysia reported that any disposal ending that position needs the consent of the sukuk holders.

What happens if Zetrix AI misses the Oct 22 deadline?

BusinessToday Malaysia reported that a failure to remedy the breach, followed by a failure to win a waiver, could expose the company to accelerated repayment of outstanding principal plus future coupon payments. Malaysiakini reported that the alternative to a remedy is to seek sukuk holders’ consent through an extraordinary resolution.

Who is Wong Thean Soon and why does his stake matter to the sukuk?

Malaysiakini describes Wong as co-founder and managing director of Zetrix AI. The sukuk terms, as quoted by The Star, make his status as largest shareholder a condition of the programme. MARC Ratings said in September, per The Star, that margin calls were the main trigger for his shareholding reduction.

What did MARC Ratings do to Zetrix AI’s rating?

The Star reported on Sept 18 that MARC placed the AA-IS rating on Zetrix AI’s Islamic Medium-Term Notes programme on MARCWatch Developing. The Edge Malaysia later reported that MARC revised the watch to negative from developing.

Has Zetrix AI defaulted on its sukuk?

The company’s own Bursa Malaysia filing, as quoted by The Star, calls the situation a potential breach, and says it is in discussions with the sukuk trustee. BusinessToday Malaysia presented accelerated repayment as a possibility that depends on the breach going unresolved by Oct 22 and no waiver being secured from sukuk holders, not as an event that has happened.