KUALA LUMPUR (Jan 10): The High Court on Tuesday (Jan 10) allowed a petition by six financial institutions to wind up Serba Dinamik Holdings Bhd, and its three companies, Serba Dinamik International Ltd (SDIL), Serba Dinamik Sdn Bhd and Serba Dinamik Group Bhd, over debts totalling about RM5 billion.
Judicial commissioner Ahmad Murad Abdul Aziz allowed a petition filed by Standard Chartered Saadiq Bhd, HSBC Amanah Malaysia Bhd, AmBank Islamic Bhd, MIDF Amanah Investment Bank Bhd, United Overseas Bank (Malaysia) Bhd, and Bank Islam Malaysia Bhd, and granted an order to wind up the four companies, which are in debt to the tune of some RM5 billion.
Upon being wound up, the companies will be placed under Victor Saw, a liquidator from PricewaterhouseCoopers (PWC).
Ahmad Murad earlier heard an application by the companies to postpone Tuesday's hearing of the winding-up proceedings after counsel Ranjit Singh — a legal representative of Efire Capital Holdings Ltd, an Abu Dhabi company that is a 50% joint venture between SDIL and an Abu Dhabi firm — argued that Efire Capital should be allowed to sell its assets first to help repay the debt.
Ranjit argued that Efire Capital should be allowed to intervene in the matter, and be given one to 1.5 months to dispose of the assets to help pay off some of the debts before the winding-up, as it would be harder to sell the assets at a better price after the winding-up. Moreover, he argued that the winding-up would also affect the joint venture.
Ranjit further pointed out that the interim liquidator can only act for the holding company, but not the joint-venture company, which would be subject to Abu Dhabi law.
“I am also not certain of the assets to be sold off said to be worth RM700 million and hence need the time,” he added.
However, the application to adjourn was objected to by Datin Jeyanthini Kannaperan, who represented the syndicated lenders, Benjamin Dawson, who appeared for the bilateral lenders in HSBC Amanah and HSBC Bank, and Karen Tan, who appeared for Hong Leong Islamic Bank.
Previously, the Serba companies had offered to pay 15% of their debts to the local lenders by August 31 last year, and the remaining amount by the end of last year, but had failed to do so.
Moreover, Jeyanthini revealed that the companies had failed to make obligatory statutory payments, including those that relate to the Employees Provident Fund (EPF) and Social Security Organisation (Socso) for the staff. She said that the debt to the petitioner syndicated lenders, which she represented, amounted to about RM1.7 billion.
“The interim liquidator report on Aug 23 conclusively showed the companies are commercially insolvent,” she stressed.
Largest insolvency court case present
Benjamin, who was also objecting to the adjournment, also informed the court the case involving Serba Dinamik is the largest insolvency case in the courts given the debt of RM5 billion.
He said putting the case into context, this is a case of a group of companies which has the largest debt owing in the insolvency court, and it does not have a credible restructuring plan.
“It owes RM1.7 billion to the syndicated lenders, it owes another US$500 million to the sukuk lenders, RM250 million to Hong Leong Islamic, and to my client another RM70 million.
“This is close to RM5 billion, and there is no proper restructuring plan. There is a propensity as in the past for the Serba Dinamik group of companies to come out with bare allegations, with no credible evidence to support,” he said.
There is no evidence to support the value of their assets, or the buyers of their assets, Benjamin said, adding that this is the situation the creditors had to deal with in the past year.
He added that in the judicial management application, the group said that it is eager to pay the creditors, but nothing came out of that, with the group failing to pay the creditors on Aug 31 and at the end of last year.
Lee Shih on behalf of the interim liquidator said that Serba Dinamik and the respondents had not filed the statement of affairs, and that they had also failed to disclose where the assets are. In addition, the directors — some of whom are in SDIL — also refused to divulge details.
Claudia Cheah for Hong Leong Islamic also objected to the adjournment.
Despite a plea by counsel Mak Lin Kum representing the four Serba Dinamik companies for a short adjournment to allow the sale of further assets as claimed, Ahmad Murad did not allow the matter to be postponed further.