by SYED ALI MOHAMED / Pic source: www.e-serbadk.com
THE article published by P Gunasegaram in Malaysiakini on May 17, 2022, titled “AG’s shockingly poor explanation in Serba Dinamik row” is just another example of someone trying to sound clever without applying any thought.
Gunasegaram stated that the Attorney General’s (AG) decision was “shocking, illogical and without proper basis” when in fact it was his comments that were shocking, illogical and without proper basis.
He claims that the Securities Commission Malaysia (SC) knows better than the AG, as the professionals that specifically monitor the complex Capital Markets and Services Act 2007 (CMSA). In stating this, he clearly believes that the SC knows better than the AG, as if Malaysia appoints idiots to the role of AG.
The AG is a highly intelligent man with outstanding qualifications that is more than capable of understanding the CMSA. In fact, it is this very case that showed just how much more he is capable of this than the SC.
Gunasegaram states that the AG cannot consider various factors in deciding to exercise the discretion given to him under the Federal Constitution, and that the AG can only consider the strength of the case.
It is abundantly clear that the AG HAS considered the strength of the case, and found it wanting. That was the first reason stated by the AG in his statement on the matter. It is quite clear that his assessment of the strength of the case was that it was weak, as he said that the evidence was circumstantial.
Like others who think they are more intelligent than they really are, Gunasegaram is waffling about the merits of the case after only having read about it in the media. Does he have access to the case files, or the evidence? Of course he doesn’t — unless someone is breaching secrecy provisions.
So, given that Gunasegaram has only assessed what has been printed in the media, how is it that he considers himself to be in a position to criticise the one person appointed specifically to review cases to ensure there is enough evidence of sufficient strength to proceed to trial?
And there is the irony in what Gunasegaram said — he should leave that to those that know better — the AG whose role is the one person in Malaysia that is in a position to ensure that the courts are not bogged down with cases that are deficient and doomed to fail.
No rules were relaxed by the AG. The SC requested charges be laid on the promise that the evidence would support the charges, however, the matters had to be adjourned twice due to the SC failing to provide evidence. When the evidence was finally produced, the AG assessed it as lacking, as he stated.
Gunasegaram did not have access to Serba Dinamik Holdings Bhd’s representation to the AG either — which the AG also considered.
There was no paradox in what the AG stated, when he said that the charges against Serba Dinamik ought not to be pursued due to the economic consequences of doing so. Having assessed the strength of the case to be poor, he then considered the impacts of pursuing the matter through the court.
Where Gunasegaram claims that all the AG can consider when assessing matters is the strength of the case, he is totally incorrect. An AG must consider a range of factors when proceeding to trial, much like all those involved in law enforcement and legal matters.
Only an idiot blindly lunges forward ignorant of the following factors (to name but a few):
• The strength of the evidence.
• Likelihood of success.
• Deterrent impact.
• Public interest.
Where the strength of the case is weak, the likelihood of success is poor, and the real risk is that enormous resources are tied up for months or years on end only to have the case dismissed.
Of note is the fact that the AG chose to compound the offences. He could have just withdrawn the charges and let the matter drop, however, with the compounding of the offences, those charge were heavily fined to the maximum allowed. This is the deterrent effect.
Gunasegaram stated: “The economic consequences are that there will be an erosion in the value of capital markets in the billions of ringgit if there is even the slightest suspicion that market participants can rig the market and get away with it by a mere fine. Market integrity is compromised when the independence of the SC is interfered with needlessly.”
Again, he shows his ignorance. It seems that he is completely incapable of considering the possibility that in fact it was the SC that needlessly interfered with a listed company.
No one “rigged the market” as Gunasegaram tries to state. Serba Dinamik’s own announcements made it clear that KPMG International Ltd went to the SC without waiting for a response from Serba Dinamik to the various issues. Had they waited a day, their concerns would have been addressed.
Gunasegaram’s further statement that “ANY serious charge of providing false information should be fully investigated and prosecuted” is further ignorance of what transpired. Serba Dinamik’s announcement makes it clear that the SC had charges laid without the benefit of completing an investigation. No one at Serba Dynamic was even so much as interviewed.
So, what is the basis of demanding that ANY serious charge MUST be prosecuted? The AG’s role is precisely to weed out rubbish cases presented to the court, to prevent clogging up the system.
If the SC really thought that this was such a crucial matter to the country, where was their investigation? Why no effort at all?
It is clear that they let EY Consulting do all the work, did nothing further and completely relied on their interim report that they refused to sign off on. And Gunasegaram calls that expertise and professionalism?
Where the case was flawed, the real and immediate economic impact is the extensive loss of jobs and income in Malaysia from the collapse of Serba Dinamik and entities relying on its existence for their continued existence.
As for Gunasegaram’s claim that the story was about a year in the making, yes, it was. It took about a year for Serba Dinamik to put an end to KPMG’s hasty actions, followed by the SC’s hasty actions, with some of the senior people involved in the matter from KPMG and the SC being reported to the authorities over their actions. Of course, Gunasegaram conveniently ignores that little detail…
And then Gunasegaram states that: “Under the CMSA, auditors have a statutory obligation to immediately report to the SC, if they reasonably believe that there are any matters that may constitute a breach or non-performance of any requirement of securities laws, rules of the stock exchange or any matter that may materially adversely affect the financial position of a listed company.”
Of course, he conveniently leaves out the fact that a reasonable belief has to be more than a mere suspicion.
KPMG’s report to the SC was made on a mere suspicion, as a result of their inability to verify certain matters. Management’s response to the issues raised showed that many of the issues were in fact without basis, however, KPMG, knowing that management were to respond to them within the next day, did not wait for management’s response — they submitted their report before the issues they raised could be addressed — giving them the appearance of legitimate concerns.
A day later, they could not have submitted that report. As such, KPMG could NOT have had a reasonable belief that such a breach had occurred.
Where Gunasegaram mentions that the SC dismissed the claims of Serba Dinamik and lodged a police report, you have to ask yourself, where is all the action from the police in response to that report? If the SC had such strong grounds, why has it died a natural death?
One of Gunasegaram’s most outrageous statements is the following: “Under the circumstances, it certainly looks like there were no grounds for the AG to interfere in the SC’s decision to prosecute the officials and should have let the courts decide the outcome.”
No grounds for the AG to interfere???? What does he think the role of the AG is? And if not the AG, then who? Gunasegaram is showing his ignorance and stupidity here. Maybe he should leave it to those who know better.
- The writer is a lawyer based in Kuala Lumpur.