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

By Pearlwhite 19^th 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 correct.  If 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 criteria.  This 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

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

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

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).

2. 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 1^st 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:

• Rules of Bursa Malaysia Depository
• Capital Markets and Services Act 2007
• Securities Industry (Central Depositories) Act 1991
• Bursa Malaysia Corporate governance model

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?

2. 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.

2. 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.

Related articles

Serba Dinamik’s miraculous resurgence - A blessing in disguise

The battle of the nominees in Serba Dinamik so long as there is no doubt as to the credibility of Bursa Malaysia

Securities Commission's (SC) uphill task to successfully charge Serba Dinamik (Part 2)

The peculiarities with Securities Commission’s (SC) charge sheet against Serba Dinamik (Part 1)

The devastation Serba Dinamik suffered due to the abuse of Qualified Privilege that fuelled negative publicity with unsubstantiated allegations - Full

Serba Dinamik suffers devastation from the abuse of Qualified Privilege that fuelled negative publicity with unsubstantiated allegations - Trailer

Serba Dinamik’s fruits of labour to the truth is getting closer

From the desk of Serba Dinamik’s Shareholders To Theedgemarkets.com - Clarification on the Articles appearing in Theedgemarkets.com Website

Serba Dinamik’s financials are free of financial transgressions and fraud

How Serba Dinamik overcomes obstacles to come out better and stronger.  Its good for the capital markets.

Serba Dinamik - A success that was not revealed

Serba Dinamik is given an olive branch and redemption for the regulator?

Serba Dinamik is ever so helpful, but the rest refuses to leave Malaysia to finalise the SIR.

Serba Dinamik - Two thirds cleared with one third being finalised.  A little more to go.

The mispresented truth about Serba Dinamik – The mainstream medias' not so great headlines

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.