Serba Dinamik's listing status now up for grabs

Saturday 27 Apr 2024

KUALA LUMPUR (Jan 11): Once the darling of the local stock market, oil and gas services provider Serba Dinamik Holdings Bhd, whose shares have been suspended from trading a year ago while the company is undergoing liquidation, is seeking white knights to participate in its restructuring exercise.

“Interested parties are invited to submit their expression of interest to participate in the restructuring of Serba Dinamik (in liquidation) and to amongst others, assume the listing status of the company or to facilitate a reverse take-over of the company,” according to a copy of an advertisement prepared by its liquidator PricewaterhouseCoopers Malaysia (PWC) to seek for such interested parties that was sighted by The Edge.

“An information pack containing details of the company can be purchased at RM500,” it added. The closing date for the submission is March 29, 2024.

Serba Dinamik’s stock has been suspended from trading since Jan 18 last year, after it failed to submit its annual report for FY2023 on time. Till now, it has yet to issue the report. Its request to extend the deadline for the submission till Jan 15, 2024 has been rejected by Bursa Malaysia.

Meanwhile, the company has been classified as a cash-strapped Practice Note 17 (PN17) company since January 2022, after its external auditors Nexia SSY PLT expressed a disclaimer of opinion on the company’s audited financial statements for the 18-month financial period ended June 30, 2021.

The group's troubles started in May 2021, when its external auditor at the time, KPMG, flagged issues involving the group's transactions and receivables that amounted to at least RM3.5 billion, followed by a probe by the Securities Commission. Its shares were also suspended by Bursa Securities at the time, who directed the company to reveal the findings of a special independent review conducted by Ernst & Young Consulting Sdn Bhd (EY Consulting) into the company, following KPMG's revelations.

In response, Serba Dinamik sued KPMG for alleged negligence and breach of duties, sued EY Consulting to block it from revealing the findings, and sued Bursa, claiming it had overstepped its bounds.

Subsequently, four of its top executives, including group managing director and chief executive officer Datuk Mohd Abdul Karim Abdullah, were charged with furnishing false statements to Bursa over a revenue figure of some RM6 billion. The four, however, were later discharged and acquitted after sending a representation letter to the Attorney General's Chambers. They only had to pay a total RM16 million in compounds.

Following the audit-saga-turned-legal-tussle with its auditors and regulator, the group has been dogged by financial troubles. For the 18 months ended June 30, 2021 (FY2021), the group made a net loss of RM185.37 million on revenue of RM8.61 billion.

The group then recorded a whopping net loss of RM1.09 billion in FY2022 as revenue dropped to RM1.35 billion. Its annual net loss then jumped to RM1.3 billion in FY2023 as revenue shrank further to RM403.23 million. In its first quarter of FY2024 that spanned July-September 2023, the group reported a net loss of RM80.67 million, down 23% from the RM104.6 million it incurred a year ago as it recorded lower expenses and finance costs. Revenue, however, fell 93.6% to RM13.75 million from RM213.58 million.

In January 2023, the courts allowed a petition filed by six financial institutions to wind up Serba Dinamik and its subsidiaries over debts totalling about RM5 billion — the largest insolvency case in the courts — while a liquidator from PWC was appointed by the court to undertake the winding up of the group.

In December last year, Bursa reprimanded Serba Dinamik and 10 of its directors for breaching market listing requirements, saying there had been "a serious dereliction of duties" among them that resulted in corporate governance failures, particularly in ensuring proper and timely disclosure of material information and compliance with the regulator's directive.

Fines ranging from RM355,200 to RM1.38 million were imposed on each of them. Mohd Abdul Karim and executive director Datuk Syed Nazim Syed Faisal were each fined RM1.38 million.

Edited ByTan Choe Choe

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