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Serba Dinamik hidden nominees and hidden proxy(ies) will reveal themselves

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Publish date: Wed, 19 Jan 2022, 07:28 PM
Pearlwhite's commentaries

In respect of the article, it is recommended that you consult with a Certified Accountant/Chartered Accountant/Chartered Internal Auditor, Chief Financial Officer, Legal Counsel and/or Tax Advisor for advice concerning the article.

Serba Dinamik's hidden nominees and hidden proxy(ies) will reveal themselves

By Pearlwhite 19th January 2022 7.28PM

 

When Bursa Market Place, a division within Bursa Malaysia Securities Berhad, replied to an emailed request of confirmation of Serba Dinamik’s top 10 investor (see below), it vigorously maintains the accuracy and completeness in it as correctIf the details of depositors are confirmed by the entity that regulates and manage them, there is no doubt as to the authenticity of the list, even if other trusted third-party sources of information proves otherwise.

Source : Bursa Market Place (https://www.bursamarketplace.com)

So, what did Bursa Market Place confirm?  It confirmed that the list is:

  • Correct with regards to the investors name, % O/S, Position (shares), Position Chg (M), Value (M USD), Filing Date and Filing Source
  • Updated with the latest information
  • Valid even till the date of the publication of this article

So, it cannot be challenged that Employees Provident Fund Board holds 4.97%, Kumpulan Wang Persaraan (Diperbadankan) holds 4.53%, Permodalan Nasional Berhad (PNB) holds 4.34%, SBB Dana-Al-Ihsan holds 1.45% and Lembaga Tabung Haji holds 1.39%.

The question is, how did this misinformation rhetoric, unsubstantiated claims of Fraud and Financial Transgressions (FAFT), contempt for Serba Dinamik and negative publicity perpetuate in the media and in various financial platforms for the past 7 months?

Exploits to the inadequate disclosure requirements of beneficial ownership

  1. Failure to emphasise total beneficiary ownership (subject to satisfying substantial shareholder criteria)

Not known to many, there are 2 kinds of beneficiary lists derived from the record of depositors.

Bursa Market Place’s top 10 investors list (no substantial shareholder criteria)

The information in this list details the beneficiary's consolidated (total) ownership directly held and held under nominees.  Which is to say, it is a total the beneficiary holds, irrespective of the way it is being held, direct or nominee.  There is only one beneficiary and is not subject to satisfying substantial shareholder criteria.

Shareholders lists published in various financial platforms and Annual Reports

The information in this list details the beneficiary's ownership which is directly held and held under nominees and they way they are held are treated as separate beneficiaries and is subject to satisfying substantial shareholder criteriaThis is the default list used by various financial platforms and Annual Reports.

As an example, XYZ Berhad is held by the National Trust Board (NTB) with 1 billion shares, representing 10% of XYZ’s shareholdings.  NTB holds 700 million shares directly, with 300 million shares held by 2 nominees, the Northern Bank with 250 million shares and the Southern Bank with 50 million shares. 

Other Shareholder B holds 30 million shares of XYZ Berhad directly and in 2 different nominee accounts at 260 million shares and 110 million shares.

The list is disclosed as follows:

Bursa Market Place’s top 10 investors list in XYZ Berhad

No.

Investor Name

% O/S

Position (M)

1

National Trust Board

10.000%

1,000

2

Other Shareholders A

6.000%

600

3

Other Shareholders B

4.000%

400

XYZ Berhad substantial shareholders list published in various financial platforms and Annual Reports

No.

Investor Name

% O/S

Position (M)

1

National Trust Board

10.000%

1,000

2

Other Shareholders A

6.000%

600

XYZ Berhad top 30 shareholders list published in various financial platforms and Annual Reports

No.

Investor Name

% O/S

Position (M)

1

National Trust Board

7.000%

700

2

Other Shareholders A

6.000%

600

35

Other Shareholders B (nominee 1)

2.600%

260

38

Northern Bank (nominee for National Trust Board)

2.500%

250

60

Other Shareholders B (nominee 2)

1.100%

110

90

Southern Bank (nominee for National Trust Board)

0.500%

50

132

Other Shareholders B

0.300%

30

One can appreciate, from the example, the difference in information portrayed, the resulting perceptions and conclusions arrived for Other Shareholder B if the beneficiary and/or nominees were not in the substantial shareholder list and top 30 shareholders list so frequently used in by various financial platforms and Annual Reports.

For Serba Dinamik, this information mismatch can be seen for the:

  • Employees Provident Fund Board with 4.97%
  • Kumpulan Wang Persaraan (Diperbadankan) with 4.53%
  • Permodalan Nasional Berhad (PNB) with 4.34%
  • SBB Dana-Al-Ihsan with 1.45% and
  • Lembaga Tabung Haji with 1.39%.

that represents 16.40% of Serba Dinamik’s shares that do not appear in the 30 shareholders list (apart from 0.279% being held by Lembaga Tabung Haji).

  1. Failure to require filings when shareholdings are distributed to nominees or vice versa

The current rules do not require filings to changes when shareholdings are distributed to nominees or vice versa.  With 1), it had been perceived that the Malaysian government agencies and pension funds no longer have any interest in Serba Dinamik.

Additionally, with no requirement to disclose consolidated (total) beneficiary ownership, gives the perception that when filing dates were months ago, the top 10 investors list by Bursa Market Place is deemed inaccurate by the uninitiated masses.

The narrative for this exploit can be summed up as follows:

"If Serba Dinamik's shares had been fully disposed by the Malaysian government agencies and pension funds, that is sufficient proof that these entities decided to do so because they had no confidence in Serba Dinamik.  By default of their actions, it signalled to the capital markets that the continuing misinformation rhetoric, unsubstantiated claims of FAFT, contempt for Serba Dinamik and negative publicity must be true."

Had there been a requirement to disclose the top 10 (or top 30) investors based on their total beneficiary, irrespective as to whether substantial shareholding requirements are met, this exploit would not have happened.

The question is, why did the capital market regulators permit and continue to permit it to happen, knowing well that this inadequacy is being exploited?

 

Failure to investigate proxy ownership

On 1st June 2021, 13.51% or 500 million shares of Serba Dinamik were traded just before 10.00am to a buyer.  Since then, there had been no disclosure from relevant parties as to who this buyer is.

(Credit to Xifu Investing Together -
https://youtu.be/TawgdI9SPqY?t=178)

The rational for disclosure is that to trade 500 million shares of Serba Dinamik worth approximately RM400 million, would require significant capital that realistically, no individual can provide for unless that it is under an entity and/or nominee entity.

This is rather surprising as this particular trade (the buyer and seller) can be easily identified by the capital market regulators’ Surveillance Unit.

Considering that proxy ownership is a serious offence under the following relevant laws and rules:

it begs to wonder why this issue was not investigated and disclosed.

Is the failure or more accurately termed, refusal to investigate and disclose the proxy ownership one of the many factors that the ex-Chairman of Serba Dinamik, Datuk Seri Mohamed Farid Abu Hassan, refers to as biased regulatory prosecution aimed towards Serba Dinamik?

 

The sorry state of affairs of the Malaysian capital market

The reality is that the continuing exploitation of the inadequate disclosure requirements of beneficial ownership, the refusal to investigate and disclose the proxy ownership are attempts by the capital market regulators to protect and hide the identities of certain nominees and proxy(ies)

In addition, it also permits and continues to permit misinformation rhetoric, unsubstantiated claims of FAFT, contempt and negative publicity for Serba Dinamik which is essential to garner support from retail investors who are easily influenced.

It seems that the capital market regulators have an interest to decide the fate of Serba Dinamik.  Despite what is announced against what is done and not done, it is a preaching of "Do as I say, not as I Do".

No matter, the identities of the nominees and proxy(ies) will be revealed in the upcoming AGM and most probably vote against the resolutions pertaining to the Executive Directors of Serba Dinamik.

 

To repeat:

The challenge to the Bursa Malaysia, the media and the public and investment community having contempt for Serba Dinamik

  1. To Bursa Malaysia: If indeed the information contained in Bursa Market Place on the top 10 investors of Serba Dinamik is correct, why not make a statement of its accuracy to the public and prove that it is correct?  Otherwise, the perpetuation various of misinformation rhetoric of Serba Dinamik would continue.  Or does Bursa Malaysia wish it to perpetuate?
  1. To the media, general public and investment community having contempt for Serba Dinamik : To substantiate your proof of FAFT on Serba Dinamik and that you have nothing to hide, please make public about the confirmations from Bursa Malaysia on the accuracy of the information contained in Bursa Market Place on the top 10 investors of Serba Dinamik.  Otherwise, the credibility of your revelations, past and future, will be disregarded as continued misinformation rhetoric and unsubstantiated claims of FAFT.

The challenge to the financial institutions and rating agencies that declined continued support for Serba Dinamik due to negative publicity – extend recourse to Serba Dinamik

  1. To the financial institutions : If indeed the information contained in Bursa Market Place on the top 10 investors of Serba Dinamik is correct, consider re-instating its banking facilities as the initial decision to cease banking facilities based off misinformation rhetoric and negative publicity was made in poor judgement.
  1. To the rating agencies : If indeed the information contained in Bursa Market Place on the top 10 investors of Serba Dinamik is correct, consider reviewing Serba Dinamik’s bond ratings with a provisional rating subject to banking facilities re-instated at a later to be determined date.

In conclusion, this is another reason why the capital market regulators have failed not only to safeguard the investment community but also exterminates the corporations that compose Bursa Malaysia.

The lessons learned from the way Serba Dinamik’s issue was handled would require changes to the beneficiary disclosure, changes that enable financial platforms to disclose different beneficiary list and an investigation into proxy ownership.

The question to the everyone, "Do you believe everything you read from the media and various financial platforms?"

Please decide with extreme care the decisions you are about to make in the upcoming Annual General Meeting (AGM).  Caveat Emptor.

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* In respect of the article, it is recommended that you consult with a Certified Accountant/Chartered Accountant/Chartered Internal Auditor, Chief Financial Officer, Legal Counsel and/or Tax Advisor for advice concerning the article.
 

It is not recommend that consultations be made with Certified Financial Analyst, Brokers, Traders and/or MBA/MA Finance Graduates as they are deemed not to have the necessary competency and skills to evaluate and advise on such matters discussed in the article.


 

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Be the first to like this. Showing 5 of 5 comments

fattydad

There is no need to spend so much effort to analysis. Serba missed coupon payment of $7m. This tell a lot.

2022-01-21 13:41

DonLee

promoter make up a lot of story. the fact recently trade receivable impairment few hundred of millions tell the fact that the account is manipulated.

2022-01-21 13:52

Trader2

Conman company with falsified accounts...

2022-01-21 19:23

observatory

A story to give the impression that a national conspiracy is going on.

A conspiracy that involves Bursa, KPMG, EY, EPF, KWAP, PNB and many more.

A conspiracy to wrest control of Serba Dinamik, a company that was worth just a few billions even before the current saga.

A company that is probably in negative equity by now, after defaulting on a mere USD6.5 million debt interest payment.

A national conspiracy to wrest control of a company that probably does not even have enough to repay its creditors?

2022-01-22 02:04

observatory

Anyone who still find the story believable may also enjoy this other story

https://www.amazon.com/LBJ-Mastermind-Assassination-Phillip-Nelson/dp/...

2022-01-22 02:09

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