KUALA LUMPUR (June 4): Serba Dinamik Holdings Bhd's (KL:SERBADK) delisting from Bursa Malaysia will proceed on Wednesday after the exchange regulator dismissed a final appeal from the beleaguered oil and gas outfit.
In a bourse filing on Tuesday, Serba Dinamik said it has received a letter from the regulator stating that the Appeals Committee's decision is final. As a result, the group's shares will be delisted on Wednesday as scheduled. The shares have been suspended from trading since Jan 18, 2023.
Last week, Bursa Securities notified Serba Dinamik that the group would be delisted on June 5, after rejecting the Practice Note 17 (PN17) group's request for an additional six months to submit a regularisation plan.
Serba Dinamik was required to submit the plan by May 15 but failed to meet the deadline. This was the second extension granted to the group after previously missing its initial July 5, 2023 deadline.
Serba Dinamik was originally supposed to submit the plan in January 2023 but was granted a six-month extension by Bursa Securities.
Serba Dinamik made its debut on the Main Market of Bursa Malaysia on Feb 8, 2017, marking one of Malaysia’s largest initial public offerings (IPOs) at the time. Priced at RM1.50 per share, the IPO valued Serba Dinamik at RM2.01 billion, considering the group’s issued base of 1.34 billion shares.
Once the darling of the local stock market, Serba Dinamik was classified as a cash-strapped PN17 company in January 2022 after its external auditor Nexia SSY PLT expressed a disclaimer of opinion on the group’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.
Serba Dinamik was subsequently directed by Bursa to reveal the findings of a special independent review conducted by Ernst & Young Consulting Sdn Bhd (EY Consulting) into the group, following KPMG's revelations.
In response, Serba Dinamik sued several parties including KPMG for alleged negligence and breach of duties, EY Consulting to block it from revealing the findings, as well as 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 acquitted after sending a representation letter to the Attorney General's Chambers. They only had to pay a total RM16 million in compounds.
In January 2023, the courts granted a petition from six financial institutions to wind up Serba Dinamik and its subsidiaries due to debts totalling about RM5 billion — the largest insolvency case in the courts. A liquidator from PricewaterhouseCoopers Malaysia was appointed by the court to oversee the group's winding-up process.
In December last year, Bursa reprimanded Serba Dinamik and 10 of its directors for violating market listing requirements, citing "serious dereliction of duties" resulting in corporate governance failures, particularly in ensuring proper and timely disclosure of material information and compliance with regulatory directives.
Fines ranging from RM355,200 to RM1.38 million were imposed on each of them, with Mohd Abdul Karim and executive director Datuk Syed Nazim Syed Faisal receiving fines of RM1.38 million each.
Serba Dinamik logs 11th straight quarterly loss
In a separate filing on Tuesday, Serba Dinamik reported a significant reduction in net loss to RM108.1 million for its third quarter ended March 31, 2024 (3QFY2024), from RM972.8 million a year ago, primarily due to lower administrative expenses. Loss per share narrowed to 2.90 sen from 26.10 sen.
Notably, this is the group's 11th consecutive quarterly loss.
Administrative and other operating expenses decreased 97.1% to RM25.7 million from RM876.2 million in 3QFY2023, according to its filing.
Quarterly revenue rose 74.8% to RM10.8 million from RM6.18 million a year earlier, underpinned by higher revenue in the operation and maintenance segment as well as education and training activities.
For the first nine months of FY2024, Serba Dinamik said its net loss dropped to RM448.1 million from RM1.17 billion in the previous year.
However, revenue for the period fell 91% to RM36.4 million from RM405.1 million, primarily due to a decline in revenue from the operation and maintenance segment and the cessation of its engineering, procurement, construction and commissioning operations.
The group said it anticipates that business will remain challenging for the remainder of 2024 due to global economic uncertainty and the company's current liquidity constraints.
"We believe that the operation and maintenance segment will remain our core competency and provide the foundation for our operations," the group said, adding that it remains committed to addressing its PN17 status, including the restructuring and regularisation plan.