KUALA LUMPUR (April 14): It appears Serba Dinamik Holdings Bhd may not be out of the woods yet despite being compounded by the Securities Commission Malaysia (SC) on Wednesday (April 13) for submitting a false statement involving a revenue of RM6.01 billion for its financial period ended Dec 31, 2020 (FY20), which was previously red-flagged by the company's external auditor KPMG.
Bursa Malaysia Securities Bhd had on Wednesday filed contempt proceedings against Serba Dinamik Holdings Bhd and its directors in relation to the troubled oil and gas (O&G) outfit’s failure to reveal the fact-finding update (FFU) of its special independent review (SIR) done by Ernst & Young Consulting Sdn Bhd (EY Consulting).
Bursa Malaysia filed an ex-parte application to seek leave (permission) from the court to proceed with committal proceedings owing to Serba Dinamik’s failure to comply with a Feb 7 High Court order made by Judicial Commissioner Wan Muhammad Amin Wan Yahya that required the O&G company to reveal the FFU within two market days from the date of the order.
“The defendant had, in defiance of the order, failed, neglected and/or refused to comply with the terms of the order and is therefore interfering with, or obstructing, the due administration of justice,” it said in a statement which accompanied the application.
The documents filed by Bursa Malaysia's solicitors Messrs Chooi & Company + Cheang & Ariff were sighted by theedgemarkets.com from a file search done via the e-court system, where the application was filed before Wan Muhammad Amin's court.
Serba Dinamik also failed to get a stay of the High Court decision on Monday.
In the application, the bourse operator named the company along with its directors Datuk Dr Mohd Abdul Karim Abdullah, Datuk Awang Daud Awang Putera, Datuk Abdul Kadier Sahib, Datuk Syed Nazim Syed Faisal and Noor Azri Noor Azerai as contemnors.
If found in contempt, the firm could be staring at a fine while the directors themselves could be fined or jailed for their failure to take “all necessary steps as a director” to ensure the group complied with the order.
In all contempt proceedings, leave had to be gained by the court, and the contemnor would then be given an opportunity to answer or set aside the leave for contempt.
“The first to fifth contemnors, as directors of the defendant (Serba Dinamik) as at Feb 7, 2022, in defiance of the order, have caused or wilfully permitted or contributed to the defendant’s failure, neglect and/or refusal to comply with the terms of the order and therefore interfering with, or obstructing, the due administration of justice,” Bursa Malaysia said in the court documents sighted.
The bourse operator noted that Serba Dinamik and its directors clearly had knowledge of the terms of the order based on the group’s Feb 8 bourse filing of the High Court’s order and terms of the said order.
Bursa Malaysia said it did not pursue committal proceedings prior to this out of deference to the High Court and Court of Appeal (CoA), as Serba Dinamik had filed a stay application on the order at the High Court and a subsequent appeal at the CoA after the application at the High Court was dismissed.
“In view of the train of events and Bursa Malaysia’s deference to the High Court and CoA in administering justice and due process, Bursa Malaysia held its hands in making an immediate application for committal proceedings.
“Bursa Malaysia commenced these committal proceedings as soon as the CoA dismissed [Serba Dinamik’s bid for a stay] on April 11, 2022,” it said.
The bourse operator noted that as at the date of application (April 13), Serba Dinamik has yet to comply with the terms of the High Court order and that disobedience continues even after the group’s bid for a stay was dismissed by the CoA.
The legal entanglement between Bursa Malaysia and Serba Dinamik stems from the latter’s failure to comply with the bourse operator's directive to disclose the FFU.
Bursa Malaysia filed an originating summons on Nov 25, 2021, to compel Serba Dinamik to disclose the FFU of the SIR dated Sept 30, 2021 conducted by EY Consulting.
The High Court on Feb 7 this year decided in favour of Bursa Malaysia and granted the order to compel the release of the FFU, but both parties are to appear before the CoA after Serba Dinamik filed an appeal against the High Court’s decision.
No date has yet been fixed at the CoA to hear Serba Dinamik's appeal to set aside the Feb 7 High Court order. However, a case management on Tuesday at the appellate court had fixed the matter for further case management on May 11.
Apart from Bursa Malaysia, Serba Dinamik is also involved in legal proceedings with EY Consulting, as the company initiated a lawsuit against the latter on Nov 5 last year, in which the beleaguered O&G group sought to restrain EY Consulting from sharing any findings or opinions on the FFU.
The group’s originating summons and injunction application was dismissed by the High Court on March 8. However, it is also appealing this High Court decision at the CoA, and the matter has been fixed for case management on May 9, 2022.
Serba Dinamik's separate legal action for an injunction to bar Bursa Malaysia from forcing the company to reveal the FFU was also dismissed by the High Court.
On Wednesday, four of Serba Dinamik's top executives, namely Karim; Syed Nazim, who was chief financial officer (CFO) from June 2016 until mid-2020; its current group CFO Azhan Azmi; and vice president of accounts and finance Muhammad Hafiz Othman, were each compounded RM3 million each.
Another RM1 million compound was imposed on Hafiz for falsifying the accounting records of Serba Dinamik's subsidiary.
SC compounds Serba Dinamik, top execs RM3 mil each for submitting false revenue that KPMG flagged
Serba Dinamik ordered to reveal fact-finding update by EY Consulting
Serba Dinamik fails to stay High Court decision requiring it to reveal fact-finding update
High Court strikes out Serba Dinamik’s bid to stop Bursa Malaysia from compelling company to release fact-finding update