KUALA LUMPUR (Aug 5): Amanah Raya Bhd’s asset management unit, AmanahRaya Investment Management Sdn Bhd (ARIM), has filed a lawsuit against Serba Dinamik Holdings Bhd, now under liquidation, and 12 other parties over its RM100 million investment in Islamic Commercial Papers (ICPs) issued in May 2021.

The suit, filed at the High Court on April 30, 2026, names Serba Dinamik, former auditor KPMG PLT, principal adviser RHB Investment Bank Bhd (RHBIB), rating agency Malaysian Rating Corporation Bhd (MARC), sukuk trustee Malaysian Trustees Bhd (MTB), and eight former and current directors, including CEO and managing director Datuk Mohd Abdul Karim Abdullah. The court allowed for substituted service on Abdul Karim, who remains at large. 

ARIM is seeking to recover the RM100 million investment, along with compensation (Ta’widh), costs and additional damages, claiming the ICPs became worthless after Serba Dinamik’s financial collapse.

According to ARIM’s statement of claim sighted by The Edge, the company invested in the ICPs under Serba Dinamik’s sukuk wakalah programme after being invited by RHBIB in May 2021. It paid RM95.77 million on May 24, 2021, and became the sole holder of the RM100 million ICPs, which were due to mature on May 24, 2022.

Serba Dinamik later defaulted on its debt obligations. On Nov 9, 2021, its subsidiary SD International Sukuk Ltd (SDISL) missed a US$9.45 million profit payment on its US$300 million sukuk. The default continued beyond the 30-day grace period, triggering a default under the ICP trust deed.

In March 2022, ARIM authorised the sukuk trustee to take action. The trustee issued a notice of default and demanded repayment of the RM100 million plus Ta’widh on April 1, 2022. After Serba Dinamik failed to pay, the trustee filed a recovery suit on April 29, 2022, which was later withdrawn in April 2025 after ARIM obtained permission to file a new claim.

ARIM subsequently issued legal demands to Serba Dinamik’s former directors, KPMG, RHBIB, MARC and MTB, but all parties denied any wrongdoing.

In the suit, ARIM alleges the defendants breached their obligations under the Capital Markets and Services Act 2007 (CMSA) by failing to ensure that the Information Memorandum (IM) provided to investors was accurate, complete and free from misleading statements or material omissions.

The company claims Serba Dinamik and its directors failed to disclose key information, including financial irregularities raised by KPMG and a Securities Commission (SC) raid conducted shortly before ARIM completed its investment.

ARIM alleges these developments were not disclosed to investors before the investment. KPMG had raised audit concerns on May 3 and reported suspected financial irregularities to the SC on May 5. The SC later raided Serba Dinamik’s offices from May 18 to 20.

Despite these events, ARIM claims the ICP issuance proceeded and Serba Dinamik only announced the audit issues to Bursa Malaysia on May 25, the same day the investment was completed. ARIM alleges the company should have suspended or withdrawn the ICP issuance after the developments.

ARIM also alleges that KPMG failed to properly disclose or escalate audit concerns that could have affected investors’ decisions.

RHBIB, lead manager and facility agent, failed to conduct sufficient due diligence before inviting ARIM to invest.

MARC assigned a favourable credit rating based on unaudited 2020 financial statements.

MTB, as trustee, failed to protect investors by not investigating delays in Serba Dinamik’s audited accounts and by agreeing to relax the company’s debt-to-equity ratio shortly after KPMG reported the irregularities to the SC.

ARIM said it would not have invested in the ICPs if these matters had been disclosed and alleged Serba Dinamik failed to return the investment proceeds after announcing the audit issues.

Serba Dinamik denied most of ARIM’s claims in its defence statement, saying it would only admit facts supported by court records or public announcements. The company confirmed it appointed Ernst & Young (EY) on July 2, 2021 to conduct an independent review of issues raised by KPMG.

It also clarified that four separate winding-up petitions, rather than a single petition, were filed by syndicated lenders against Serba Dinamik and related entities.

In its defence, Serba Dinamik argued that ARIM could not rely solely on the Information Memorandum when making its investment decision and that the company was not the direct cause of ARIM’s losses. It also claimed ARIM had not sufficiently proven its losses, failed to mitigate them, and had no legal basis for seeking aggravated or exemplary damages.

KPMG in its defence said it had no involvement in the ICP issuance, did not consent to the use of its audit report for the offering, and owed no duty of care to ARIM. It also alleged Serba Dinamik concealed both the RM100 million ICP issuance and the SC raid from the firm.

RHBIB and MTB in their defence said ARIM made its own investment decision after conducting its own assessment. They maintained they were unaware of the audit issues at the time and claimed ARIM initiated the investment through a reverse inquiry. Both parties have also filed a counterclaim alleging abuse of process.

MARC in its defence argued that credit ratings are opinions and not guarantees, and that it does not owe a duty of care to third-party investors under the CMSA. It said ARIM, as a sophisticated investor, was responsible for conducting its own evaluation.

Five former independent non-executive directors, namely Mohamed Nor Abu Bakar, Hasman Yusri Yusoff, Tengku Hasmuddin Tengku Othman, Sharifah Irina Syed Ahmad Radzi and Rozilawati Basir denied any wrongdoing in their statement of defence, saying they had acted in accordance with their fiduciary duties and in the company’s best interests. They argued there was no basis to claim their conduct was arrogant, improper, or driven by personal gain.

Messrs Sreenevasan filed the suit on behalf of ARIM, while Lim Chee Wee Partnership represented Serba Dinamik in its defence. Messrs Malik Imtiaz Sarwar acts for MARC, Messrs Lee Hishammuddin Allen & Gledhill for KPMG, Messrs Christopher & Lee Ong for RHBIB and MTB, Messrs Ariff & Associates for the four independent non-executive directors—Mohamed Nor, Hasman, Tengku Hasmuddin, and Sharifah Irina —and Messrs Rashid Zulkifli for another independent non-executive director Rozilawati. 

Serba Dinamik chairman Datuk Abdul Kadir Sahieb and non-independent non-executive director Datuk Awang Daud Awang Putera are also defendants in the suit. Abdul Kadir and Awang Daud are yet to file their defence statement.

Serba Dinamik, once a major oil and gas services player, began facing financial difficulties in 2021 after external auditor KPMG raised concerns over financial irregularities and questioned RM6.01 billion in reported revenue for FY2020. The company disputed the findings, ended KPMG’s appointment as auditor, and came under increased regulatory scrutiny.

The SC later alleged that Serba Dinamik’s senior executives had submitted false financial information, resulting in compound fines in 2022, with Abdul Karim and three other executives paying a combined RM16 million. They were later discharged and acquitted by the Sessions Court.

The controversy resulted in further regulatory action, with Bursa Malaysia reprimanding Serba Dinamik and 10 directors in 2023 for governance failures and inadequate disclosures. Following a petition by a syndicate of lenders, the High Court ordered Serba Dinamik to be wound up on Jan 10, 2023. The company was subsequently delisted from Bursa Malaysia in June 2024 after its share price collapsed from a peak market capitalisation of about RM6 billion.

This article has been updated for accuracy