DNB seeks to settle ownership details, review due diligence with new board members

Digital Nasional Berhad (DNB) announced Thursday the appointment of new members to its board whose main task is to complete the details of the share subscription agreement (SSA) and review the due diligence findings of Malaysia's wholesale 5G operator.

The new board members are from Telekom Malaysia, Maxis, U Mobile, YTL and CelcomDigi’s Infranation, which respectively hold a 14% stake in the company after signing an SSA in December.

Collectively, the five operators have a 70% stake in DNB, with the Minister of Finance holding the remaining 30%.

DNB's reconstituted board now includes Datuk Kamal Khalid (chief transformation officer from CelcomDigi), Uthaya Kumar A/L K Vivekananda (independent director of Maxis), Chang Yit Fei (director of U Mobile), Nik Azli Abu Zahar (group counsel for Telekom Malaysia) and Datuk Seri Yeoh Seok Hong (MD of YTL Power International).

They will be serving alongside incumbent board members: Treasury Secretary General Datuk Johan Mahmood Merican and Digital Ministry Deputy Secretary Ma Sivanesan Marimuthu.

The new appointments took effect on April 24, DNB said in a statement.

In local news reports, Digital Minister Gobind Singh Deo said the new board "will convene a meeting soon" to agree on the details of the "condition precedents" that must take place before the SSA can come into effect.  He added that the new board will also "review due diligence findings".

Related:Malaysia's 5G deadlocked again as talks with DNB break down

''The parties will continue the due process to complete the SSAs, and thereon to enhance Malaysia's 5G network deployment … I hope they can move forward quickly because it is very important for us to make sure that we get the dual 5G network," Gobind said as quoted by New Straits Times.

Malaysia's 5G rollout under a cloud

Controversy over the future of Malaysia's 5G rollout erupted last week following a report by Channel News Asia (CNA) that claimed negotiations between DNB and the five operators have stalled over final details of the SSA – specifically the condition precedents.

The report also claimed both parties were wrangling over three independent due diligence reviews of DNB – which were supposed to be completed in January – as well as the appointment of directors to represent the telcos on the DNB board.

CNA reported that the due diligence reviews would help the operators to decide whether to stay in DNB or form a new joint venture to operate the government's planned second 5G network.

But the real bone of contention, the report alleged, is the operators' mistrust of DNB's apparent lack of transparency – particularly about its tendering processes.

Citing anonymous sources from Telekom Malaysia and Maxis, CNA also reported that operators are having a "quiet rethink whether having a second network is the way forward".

The DNB quickly refuted claims made in the report, saying its talks with the operators have not broken down. It also denied any lack of transparency in its procurement and internal operations.