SCAN on the comeback trail

SCAN Associates Bhd (0135), a specialist in computer security, aims to march ahead after closing behind it a chapter of poor corporate governance.

The company was dogged by a financial scandal early this year when former chief executive officer Datuk Aminuddin Baki Esa was fired, with a police report lodged against him, over allegation of misusing company funds.

A forensic audit later revealed that the company's revenue figures in 2005 and 2007 were manipulated. The case has also come under the Securities Commission's probe.

In an interview yesterday, SCAN academician founder Datuk Dr Norbik Bashah Idris, who was recently appointed chief executive officer, did not elaborate on the incident, which is still under investigation, but gave assurance that the company has addressed the issue and strengthened its internal controls.
"We have proactively engaged the authorities, reassured clients, done some cleaning up and made internal soul-searching," he told Business Times in Kuala Lumpur.

"It was a testing time for SCAN. What happened has forced us to look internally and reform. It has been a blessing in disguise as we'll emerge leaner and meaner," said Norbik, who set up SCAN in 2000 with a group of his research students and a few accountant colleagues to capitalise on the soaring demand for computer security expertise.

Until that time, this techies group had been servicing government agencies for free. Norbik still teaches in a local university.

He said SCAN, which made a net loss of RM11.5 million last year, aims to climb back into the black this year, although its final performance will still hinge on the global economic direction.

"Despite the challenging economy, we did manage to reduce the red (ink) in 2008. Our total losses were down by 21 per cent by the end of last year," Norbik said.

"For someone on the way back in the black, I guess less red is definitely better."

This year's performance will "improve a lot" as overseas demand starts to pick up again.

New projects, especially from Indonesia and Saudi Arabia, have been pouring in at an exciting rate, Norbik added, although local demand, particularly from the public sector, remains lukewarm.

SCAN's clients in Malaysia are mainly government agencies and the banks, which require robust security for online banking.

Norbik said its subsidiary in Jakarta, PT SCAN Nusantara, has already clinched more than RM16 million of new orders.

SCAN also operates in the Middle East and has an eye on exploring the African market.

"We recently signed a deal with the Commercial Bank of Syria to provide security consultancy services and security auditing, while our security operation centre in Riyadh will be launched soon."

Norbik said the centre will allow SCAN to better serve the Saudi market as new regulations only allow security monitoring to be done within the country.

The group's total order book currently stands at RM35 million, which already exceeds last year's revenue of RM15 million.

"We are upbeat with the recent performance. Most importantly, our technical capabilities have not suffered during the short crisis. I'm proud to say nobody from the technical team left. We are comfortable to move on," Norbik said.