KUALA LUMPUR: Twistcode Technologies Sdn Bhd (Twistcode) has filed a lawsuit against Telekom Malaysia Bhd (TM) for "reneging" on a RM42 million joint venture (JV).
Twistcode, which specialises in artificial intelligence (AI) and supercomputers, claimed that TM had breached and "disobeyed" the teaming agreement, letter of award (LoA) and purchase order (PO) for the purpose of completing the objective of the JV.
Twistcode said TM had entered into a memorandum of agreement (MoA) with Huawei on July 3, 2020, a move Twistcode alleged had wrongfully hindered healthy competition in the local cloud computing, especially accelerated AI.
As a result, Twistcode claimed that it had lost some RM27.5 million in expenses and commitments incurred, over and above a payment of RM14.2 million made to TM against the PO issued under the LoA.
"During discussions, we just asked TM to refund the RM14.2 million we paid for the PO. In return, we offered to return the items ordered.
"Initially, they agreed but then suddenly changed their mind. We have been negotiating with them since 2021, but to no avail. So, as a turning point, we decided to sue," Twistcode founder and chief executive officer Nurazam Malim told Business Times.
Nurazam also claimed that TM's deal with Huawei and a police report lodged by TM against the company had severely affected its business reputation.
This, he further claimed, had caused Twistcode to be investigated by the Commercial Crime Investigation Department and the Malaysian Anti Corruption Commission in July 2020 and March 2021 But there had so far been no prosecution against the company.
"The police report accused Twistcode of cheating by allegedly editing the master service agreement (MSA), even though we signed it twice and the document was printed by TM.
"(The report) also accused Twistcode of bribing a former TM employee. This does not make any sense since we paid RM14 million to TM, not the other way around.
"Additionally, (the report) claimed that Twistcode had no past collaboration with TM, which is false. The report was technically against their employee but heavily implicated us, Twistcode," Nurazam said.
When contacted by Business Times today, TM said there is no merit in the claims by Twistcode.
"TM is a defendant in the said case and believes there is no merit in the claims made by the claimant. In line with its governance process TM wishes to state that it does not comment or discuss topics of ongoing court-related matters."
Meanwhile, TM - in Twistcode's writ of summons - denied the allegations of breaching the LOA, PO and the alleged teaming agreement.
TM clarified that it had no knowledge of such a teaming agreement and no internal record approving any such arrangement.
TM, in the writ, had also addressed the imposition of late payment charges, explaining they were based on a separate agreement, including a letter from Twistcode dated May 20, 2019, in which Twistcode acknowledged the possibility of additional charges for late payments.
TM said it had sufficient reason and cause for instructing an employee to file a police report on June 30, 2020, according to the writ.
Regarding the MoA with Huawei, the writ noted that TM had clarified that the subject matter was the rollout of a "Public Cloud AI Platform" in Malaysia, not the provision of "accelerated AI" platforms as alleged by Twistcode.
"TM asserted that the MoA does not constitute a horizontal agreement under the Competition Act 2010 and does not have the effect of preventing, restricting or distorting competition," the writ stated.
The case is scheduled for hearing in the Kuala Lumpur High Court on Oct 8.