MARC Ratings has downgraded its rating on Zetrix AI Berhad’s Islamic Medium-Term Notes (IMTN) Programme of up to RM2.0 billion to CIS from BB+IS and maintains the rating on MARCWatch Negative. The rating falls within the lowest category above default, indicating a high likelihood of non-repayment, with Zetrix AI having limited capacity to address the challenges it faces. On 16 October 2026, MARC Ratings had downgraded its rating on the IMTN Programme to BB+IS from AA-IS.
Earlier on 18 September 2026, the rating had been placed on MARCWatch Developing over a reduced shareholding buffer to comply with the positive covenant which requires the founder, Wong Thean Soon, to remain the group’s single largest shareholder. Subsequently, on 4 October 2026, the rating’s status was revised to MARCWatch Negative, reflecting heightened concerns regarding the issuer’s transparency and governance, as well as the continued unavailability of material information required for an informed assessment of its credit profile.
This latest rating downgrade reflects heightened uncertainty over Zetrix AI’s compliance with the covenant following the sukukholders’ meeting on 23 October 2026, which concluded without a resolution. MARC Ratings notes that Zetrix AI has yet to remedy its covenant breach and has not obtained an indulgence from sukukholders, leaving the IMTN Programme exposed to the risk of an event of default being declared. While a dissolution event has been triggered, this does not automatically require immediate full repayment of the outstanding under the IMTN Programme.
The rating agency also observes intensifying pressure on the group’s liquidity position arising from mounting claims. Reports indicate that the government is pursuing legal action against the group to recover RM314.0 million in unremitted revenue collected on behalf of the Road Transport Department. In its filing with Bursa Malaysia, the group informed that it has yet to receive official notification from the government. More recently, Zetrix AI’s wholly-owned subsidiary, MY EG Sdn Bhd, received an additional income tax assessment of RM353.1 million from the Inland Revenue Board. The group has appealed against this assessment. In addition to this, there has been continued uncertainty over the group’s prospective funding sources, with no assurance at this juncture that its reported digital assets are readily available or sufficiently liquid to meet its funding needs.
Compounding the liquidity concerns are weaknesses in the group’s governance framework. Zetrix AI has yet to appoint new external auditors, while all three members of its audit committee have resigned. In MARC Ratings’ view, the absence of both external auditors and an audit committee removes key oversight of the group’s financial reporting and raises uncertainty over the reliability and timeliness of its disclosures.
The MARCWatch Negative placement reflects uncertainty over Zetrix AI’s ability to resolve the covenant breach, the heightened pressure on its liquidity relative to its financial obligations, and the absence of key governance oversight. MARC Ratings will continue to monitor developments, including the outcome of the group’s engagement with sukukholders, and appointments of new auditors and an audit committee. Should Zetrix AI fail to pay any amount due under the IMTN Programme in a timely manner, the rating will be downgraded to DIS.