MySejahtera—Perpetual License, Perpetual Problems

The current administration must put a lid on the MySejahtera debacle that had transcended two prior administrations. However, the latest official remarks appear to bring more questions than answers.


Published in BusinessToday, CodeBlue & AstroAwani, image by BusinessToday.

As the management contract for the MySejahtera application is set to expire today (March 31, 2023), the review process by the government should not only be limited to determining how the app will be managed in the future but to expand into a full-fledged investigation.

The findings may suggest doing away with the app entirely, saving millions of taxpayer’s monies (assuming a lot haven’t been paid already) and allowing those involved in getting the government into this mess to be held accountable.  

Three prior administrations had failed to address the apparent “scam” and it falls on the current unity government under Prime Minister Datuk Seri Anwar Ibrahim to put a lid on this and reach the ideal outcome. 

EMIR Research has highlighted in numerous prior publications regarding MySejahtera’s mysterious and questionable past (such as the direct appointment of the developer company with no formal contract), leadership, financial and legal troubles in the companies involved, involvement of high-profile politically-linked individuals and foreign nationals, and potential data security issues.

A summary of the key questions to be answered can be found in the EMIR Research article titled “Clarify MySejahtera Deal Once and For All” dated January 3, 2023.

To top it all, the government have been considering to acquire this scandal-ridden app at an exorbitant price. The latest figure reported appears to be a whopping RM160 million, although an RM196 million figure has also been reported before.

Either way, as pointed out by the public health portal CodeBlue, the RM160 million figure surpasses the Health Ministry’s entire annual radiotherapy and oncology budget for 2022 of RM137 million, while the RM196 million exceeds Hospital Universiti Islam Antarabangsa Malaysia’s entire budget in 2022 worth RM171 million.

The government must come clean on how it arrived at these seemingly arbitrary and gigantic sums. People’s monies are being wasted on a deeply-troubled app, which could otherwise be used to help and treat many patients.

For a glimpse of the financials, costing and price comparisons, see the EMIR Research article titled “MySejahtera: Investigating Costing Fairplay” dated May 19, 2022.

To the best of EMIR Research’s knowledge, MySejahatera may be the most expensive pandemic management app in the world by a far margin—an extreme polar opposite outcome to the initial Corporate Social Responsibility (CSR) deal, which usually means free-of-charge in more reasonable parts of the world, that started the whole thing.

An in-depth due-diligence exercise to protect the government’s interest (and people’s monies!) must be conducted (which should have been done before) such as an independent technology assessment, price benchmarking analysis and independent legal assessment to determine if the legal contracts were fair to begin with.

Thus far, we have not encountered any sources claiming that the technology used in MySejahtera is novel or valuable enough to justify its hefty price tag.

Latest Official Remarks Bring More Questions Than Answers

Reportedly, officials from the health ministry have pointed out that the government and MySJ Sdn Bhd (the operator/manager of the MySejahtera app) have agreed that MySejahtera’s ownership, the app’s modules, the source code for already-developed modules, data and right-of-use are owned by the government under a perpetual licence.

But, as far as publicly available information, only MySJ was granted the exclusive, sub-licensable, and perpetual licence to the MySejahtera app via an OEM software licence agreement with the original developers, Entomo Malaysia Sdn Bhd (previously known as KPISoft). Presumably, this can only happen if we assume MySJ sub-licensed its rights to the government. If so, what agreements have been signed, what costs incurred/aid and what are the deliverables and their status?

Relatedly, ministry officials have been reported to note that this license incurs no cost in the case that the contract is not extended or if the management of the app was decided to be given to another company. Furthermore, it was reportedly said that the license would allow the government to add new modules.

We have to unpack these confusing statements.

Firstly, the notion of “no cost” for the said license is meaningless in the face of an RM160 million procurement. If the procurement is meant to ensure the government owns everything and that there are no more ownership disputes (which was what has been said by the authorities), why is there a need for a license from any other party?

Secondly, if we ignore the question above and simply go with what was said, why would there be a cost to not continue the contract when it ends as per agreement? This isn’t a premature termination.

Thirdly, how does the government have the power to appoint the operator? If this is through the sub-license from MySJ, why would MySJ go through with the deal if it means their customer (the government) intends to use the rights to choose another operator? It’s unthinkable that a sub-licensing agreement would be written to include such rights/ability for the sub-licensor to do this.

Of course, if the acquisition means the government owns everything related to MySejahtera, they can theoretically appoint whomever they want. But then this brings us back to the question earlier on why any deals or agreement is needed with MySJ or the relevance of the so-called perpetual license.

Ultimately, although the license granted to MySJ by Entomo is sub-licensable, it is exclusive. The presumed sub-licensing to the government cannot be in direct conflict with the original MySJ-Entomo licensing agreement to allow the government the right to appoint another operator. Unless terms have been negotiated, these rights would appear to be reserved for Entomo.

After all, the only reason the government had to deal with MySJ was that KPISoft/Entomo entered into a commercial arrangement with MySJ on October 6, 2020, while the CSR deal between the government and KPISoft/Entomo was still in effect. See “Confusion” On MySejahtera: Incompetence Or Collusion?” dated April 25, 2022, for details.

The apparent “CSR trap” resulted in the government having no choice but to “directly appoint” MySJ as the operator because Entomo granted MySJ the rights. What recently happened that allowed the government to appoint any other party?

Until it becomes clear what agreements, licenses, deals or renegotiations the government is referring to that would break this existing tripartite mess, these existing contracts point to the government’s perpetual reliance on Entomo/MySJ so long as MySejahtera remains their choice.

Even if the government somehow appoints a new operator, it doesn’t change the fact that MySejahtera runs on KPISoft software.

The same licensing agreement clause between Entomo and MySJ also reads “…save and except that the rights, title, and interest in and to the KPISoft software and its trademarks shall be retained by Entomo”, which distinguishes the app and the background software.

We don’t know how much the government relies on Entomo or its KPISoft software for continuous upgrades or new modules in MySejahtera. Will any new operators have access to the software and its know-how, or even have the legal rights to make improvements or changes to the app?

The government must come clean over how the RM160 million was derived, what it entails, how much has been paid and details of the related agreement(s).

EMIR Research once more calls for the set up of an independent commission to thoroughly investigate the scandal in all aspects.

Someone must pay and it cannot be the taxpayers.

Dr Rais Hussin and Ameen Kamal are part of the research team of EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.

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