Former Entellium execs nabbed for fraud

PETALING JAYA: Multimedia Development Corporation — guardian of the country’s MSC Malaysia initiative — is keeping a close eye on the alleged fraud in the United States involving a prominent MSC Malaysia-status company, Entellium Corp.

MDeC is monitoring the situation, said Ng Wan Peng, vice-president of its capability development division, after news of the alleged crime came to light in Malaysia.

Two former top Entellium executives were arrested in the United States recently for allegedly overstating the company’s revenue in order to attract more funding. The arrests were reported by The New York Times this week.

“Everybody is still in shock over this,” Husni Salleh, Malaysia Venture Capital Management Bhd (Mavcap) chief executive officer, told In.Tech on Tuesday. Mavcap, a subsidiary of the Finance Ministry, has RM7mil invested in Entellium.

Entellium also has an R&D grant of RM7.5mil from MDeC, of which RM1.2mil has been disbursed.

“There are policies and processes in place to manage and monitor the grant of MSC Malaysia-status and other incentives. Such policies and processes are constantly being reviewed and updated,” said MDeC’s Ng.

According to The New York Times, former Entellium chief executive Paul Johnston and former chief financial officer Parris Jones are accused of overstating revenue by more than 400% over the last three years.

They allegedly inflated 2007 revenue from US$1.74mil (RM6.09mil) to US$5.22mil (RM18.27mil).

The report also said that the customer relationship management software company had laid off 50 of its 68 employees at its Seattle headquarters due to financial problems.

In this country, Entellium has its R&D operations and helpdesk at the Petronas Twin Towers. Local Entellium officials could not be contacted for comment last week.

Entellium offers sales, customer service, and marketing automation solutions that are hosted over the Internet.

It was set up in Malaysia in 2000 and expanded to Seattle in 2003. It received MSC Malaysia-status last year.

Entellium was named “The One to Watch” in the US CRM market leader awards (salesforce automation category) in the Sept 2004 issue of CRM magazine. -The Star

Posted in: News, Whats Going On?