Once a Malaysian success story, Hitachi’s Fusionex comes crashing down

Kuala Lumpur-based Fusionex broke the worst news possible to its staff leading up to Christmas: They’ll be retrenched and the company liquidated.

The winding up of the data analytics firm and its subsidiaries comes after management failed to obtain important information from previous shareholders, CEO Hiroyuki Kumazaki told employees in an email.

Photo credit: Fusionex

Fusionex was founded by Malaysian entrepreneur Ivan Teh in 2005. The company quickly gained fame, and by 2014, Teh was named entrepreneur of the year by accounting giant Ernst & Young.

While Fusionex had faced challenges after that, the positive press around it drew Hitachi’s attention. The Japanese conglomerate acquired Fusionex in 2020 as part of its push to venture into artificial intelligence and big data.

The winding-up letter last December is bitter but expected, as employees were bracing for impact following rumors of problems between the current and previous management, a Fusionex staff told Tech in Asia.

Investment bankers in Kuala Lumpur were already contacting business journalists (including this author) to find out if there was any merit in Fusionex shutting down.

Parent company Hitachi paid Fusionex staff their December 2023 salary and would also pay their January 2024 salaries while the winding-up process is in order. Hitachi also assured employees that they’d receive support in searching for new job opportunities.

Kumazaki, who took over as Fusionex’s CEO on December 6, 2023, laid the blame on previous management, “whose actions have directly caused the repercussions that we all find ourselves facing.”

In a supporting affidavit, Kumazaki said he took over as group CEO following Teh’s resignation last year. Other personnel close to Teh, including Fusionex’s C-suite, also resigned on December 6, 2023.

The affidavits, which were filed on December 21, 2023, are part of Hitachi’s winding-up petition against Fusionex Group. The court will hear the suit in March.

“Government directive”

Hitachi tells us at the time of acquisition, the Japanese conglomerate found Fusionex to be financially sound and that it had “complete confidence” in Teh and his team.

But things began to fall apart. According to Hitachi’s court documents seen by Tech in Asia, problems emerged at Fusionex in August 2022, when Hitachi conducted internal audits on subsidiaries. We understand this is a normal exercise that the firm undertakes every three years.

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