Syed Nazim, Azhan and Muhammad Hafiz are also charged with making a false statement to Bursa Malaysia Securities 

by FAYYADH JAAFAR  /  Pic by TMR FILE PIX

THE Securities Commission Malaysia (SC) has charged Serba Dinamik Holdings Bhd, its directors and officials with making a false statement to Bursa Malaysia Securities Bhd, an offence under section 369(a)(B) of the Capital Markets and Services Act 2007 (CMSA). 

The erroneous statement is in reference to Serba Dinamik’s quarterly report for the year ended Dec 31, 2020, which stated a revenue figure of RM6.01 billion. 

The capital market regulator has also obtained an arrest warrant for Serba Dinamik’s founder and CEO/MD, Datuk Mohd Abdul Karim Abdullah, who is currently at large, according to the SC statement yesterday. 

Serba Dinamik’s ED Datuk Syed Nazim Syed Faisal, Group CFO Azhan Azmi and Accounts and Finance VP Muhammad Hafiz Othman, were also charged with the offence. All three defendants asserted their rights to a trial on the charges brought against them.

Judge Sabariah Othman of the Sessions Court set bail at RM300,000 with two sureties for each accused and ordered them to surrender their passports to the court. 

They are also required to report monthly to the SC’s Investigating Officer. 

Independent non-ED Abu Bakar Uzir who appeared for Serba Dinamik to answer the charge against Serba Dinamik, also claimed trial. 

“Under section 369(a)(B) of the CMSA, a person found to have made a false or misleading statement to the SC, the exchange or approved clearing house, if convicted, faces an imprisonment term not exceeding 10 years and a fine of not less than RM3 million, or both,” the SC said. 

SC’s investigation into Serba Dinamik began in May 2021, following a section 320 CMSA report to the SC by its external auditors, KPMG Ltd. 

Under the CMSA, auditors are required to notify the SC immediately if they have a reasonable belief that there are any matters that may constitute a breach or non-performance of any requirement of securities laws, stock exchange rules, or any matter that may materially affect a listed company’s financial position. 

On May 25, 2021, KPMG notified Serba Dinamik’s board of directors of certain accounting and internal control concerns. 

The following day, Abdul Karim stated the company had taken steps to rectify the issue prior to the disclosure. 

Serba Dinamik’s board then moved to sue KPMG, prompting the latter to resign as the company’s external auditor. 

Four independent directors resigned in protest of KPMG’s lawsuit, expressing their unhappiness with the company’s handling of the audit. 

Serba Dinamik then appointed Ernst & Young Consulting Sdn Bhd (EY) for a special independent review instructed by market regulators while investors sold off the shares of the oil and gas services related company. 

The company’s major shareholders such as Abdul Karim was also forced to sell their shares due to margin calls. 

Bursa suspended Serba Dinamik from trading on the main market in late October after the company failed to disclose the findings by EY and failed to file its accounts. 

Serba Dinamik sued Bursa Malaysia on Nov 8 for alleged abuse of power in managing the situation. 

The company’s subsidiary defaulted on its US$300 million (RM1.25 billion) sukuk early this month. Serba Dinamik has sued EY to prevent it from disclosing any results from the review it undertook to any other party. 

However, Serba Dinamik was unable to secure an interim injunction against Bursa Malaysia and EY, preventing them from issuing a report on the company’s conclusions. 

Serba Dinamik’s board was also hit by a fresh wave of resignation with chairman Mohamed Ilyas Pakeer Mohamed and independent director Johan Mohamed Ishak resigned on Nov 24 in protest of Bursa Malaysia’s demands with Mohamed Farid Abu Hassan reappointed as chairman. 

Only last week Mohamad Farid and Siti Zaleha Sulaiman resigned as directors. 

Serba Dinamik named Datuk Abdul Kadier Sahib, a non-independent non-ED as the new chairman.