BELOW are some figures worth examining.
Zetrix AI Bhd's filing to Bursa Malaysia on Dec 3, 2025, showed that its cumulative net outstanding treasury shares stood at 48,291,300 units.
However, a subsequent filing dated July 8, 2026, indicated that the company's treasury shareholding had increased to 154.9 million shares.
This represents an increase of approximately 221% from the earlier figure, raising questions about the scale and timing of the company's share buyback activities.
Based on available figures, estimates suggest that Zetrix AI may have spent approximately RM92 million on buying back its own shares in 2026 alone.
Naturally, share buybacks are a legitimate corporate exercise and can be an effective way of returning value to shareholders, particularly when a company's management believes its shares are undervalued.
However, the scale of Zetrix AI's purchases raises a broader question: how has the board assessed the value of its own shares, and have the buybacks delivered the intended benefits to shareholders?
A precedent worth examining
There are other examples in the local market where substantial share buybacks have subsequently come under scrutiny following a sharp decline in the company's share price.
One case worth revisiting is NexG Bhd, which has since been renamed Datasonic Group Bhd.
Between Sept 8 and Sept 10, 2025, the then NexG bought back approximately 34 million of its own shares at an average price of 49 sen apiece, representing an estimated expenditure of RM16.72 million.
This reportedly accounted for the company's only share buyback exercise during the financial year ended March 31, 2026.
With Datasonic's shares recently trading at approximately 27.5 sen, the value of those repurchased shares would have fallen to about RM9.35 million.
This implies an unrealised loss of approximately RM7.37 million based on the original purchase price.
The numbers behind Zetrix AI's buybacks
The figures surrounding Zetrix AI's share buybacks are considerably larger.
Available estimates indicate that the company purchased approximately 123.29 million shares on the open market between January and August 2026.
The estimated cash outlay was RM94.2 million, translating into an average purchase price of approximately 76.4 sen per share.
At a recent trading price of approximately RM0.055 (5.5 sen) per share, those 123.29 million shares would now be worth only about RM6.78 million.
Based on these figures, the difference between the purchase cost and current market value amounts to approximately RM87.4 million.
This represents a substantial erosion in the value of the capital deployed in the buyback exercise.
To be clear, the difference represents an indicative unrealised loss based on the prevailing share price, rather than a realised accounting loss. Nevertheless, the magnitude of the decline warrants closer examination.
A question of accountability
Share buybacks are not inherently problematic. Companies may undertake them to improve capital efficiency, signal management confidence or return surplus funds to shareholders.
However, when a company spends substantial sums buying back its own shares and subsequently sees their market value fall significantly, shareholders are entitled to ask whether the capital could have been deployed more productively elsewhere.
For minority shareholders, the issue is particularly relevant. Money used for share repurchases is capital that could otherwise have been channelled towards business expansion, debt reduction, dividends or other corporate priorities.
The question is not simply whether the board made the right call on the share price. It is also whether the company's capital allocation decisions were supported by a sound assessment of its business fundamentals and long-term shareholder interests.
This is where corporate governance and regulatory oversight become important.
Bursa Malaysia Securities and the Securities Commission have an important role in maintaining market confidence and ensuring that listed companies comply with the relevant rules and disclosure requirements.
While share price declines alone do not establish any breach of regulations or misconduct, substantial buyback activities followed by steep declines in share value inevitably raise questions that investors would want addressed.
Ultimately, the objective should be to ensure that share buybacks serve their intended corporate purpose and that shareholders have sufficient information to assess the rationale behind such decisions.
The broader issue is one of accountability, transparency and the responsible use of shareholders' capital. How these matters are addressed will also help shape investor confidence in the standards of corporate governance on the local stock market.
Written by Francis Fernandez, a former news editor with Business Times and Malay Mail. The writer's views expressed here are his own.