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There are a few invaluable lessons that companies and investing public can learn from the recent downfall of ATA IMS Bhd.

From a solely business perspective, the Johor-based electronic manufacturing service provider (EMS) was operating amid an extremely high customer concentration risk so much so that the loss of one customer was capable of crippling most of its revenue stream.

Recently, the decision of high-tech home appliance maker Dyson Ltd to terminate its contract with ATA IMS on grounds of labour abuse allegations had caught the company and its shareholders off-guard. Sales to Dyson accounts for over 80% of ATA IMS’ revenue.

In a bourse filing dated 25 November, ATA IMS announced that it had received three notices of contract termination on 24 November from Dyson Operations Pte Ltd and Dyson Manufacturing Sdn Bhd in respect of the following contracts with effect from 1 June 2022:

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