Serba Dinamik : Why the Factual Findings Update (FFU) is an embarrassment to Malaysia (Updated)

By Pearlwhite 16^th February 2022 7.38PM (Updated 17th February 10.38AM)

Solving Serba Dinamik’s unfortunate circumstance would not be a hard thing to do.  However, the decision to disclose the FFU have proven to be an embarrassment not for Serba Dinamik, but for Malaysia.  Here is why.

The FFU is inconsistent with the standards set by the Malaysian capital markets regulators

Capital markets are all about timely and efficient transmission of information and good corporate governance, supported by accredited assurance authorities, to give all stakeholders equal access to information so that no one party is disadvantaged from making the appropriate choices before them.

When it comes to the disclosure of information, the following are the types of information in Bursa Malaysia that are assured by 3^rd parties i.e.  accredited auditors, underwriters, legal,  financial institutions and relevant governance agencies including the market regulators, either directly and/or indirectly.

In all instances of information disclosed, it must be factually appropriate, accurate and complete and are consistent with the standards as expected from assurance providers.   In other words, the information disclosed have been finalised and cannot be revised.  It cannot be “interpreted differently”, “mis-interpreted” or “be open to interpretation”.

The FFU by Ernst & Young Consulting (EY) pursuant to the Special Independent Review (SIR) however, can be “interpreted differently”, “mis-interpreted” or “be open to interpretation” because it has not been finalised and/or is incomplete.  This was re-affirmed by Judicial Commissioner Wan Muhammad Amin Wan Yahya’s ruling “The information sought to be announced [in the FFU] is material and does not depend whether it is true, false or conclusive.”

* Source : The Edge Markets - KPMG raised audit issues on transactions involving over RM3 billion, says Serba Dinamik

** Source : The Edge Markets - Cover Story: Serba Dinamik in the eye of the storm

*** Source : First revealed by independent media in

Serba Dinamik - A success that was not revealed

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.

In other words, the Malaysian capital markets regulators had made an exception to the rule to disclose the FFU so that relevant parties could make the appropriate choices before them.  A choice has to be made from information that is neither true, false or conclusive.

The judgement of the Court on the FFU omitted substance over form but is correct with respect to materiality and public interest

In Judicial Commissioner Wan Muhammad Amin Wan Yahya’s ruling, “Bursa is entitled under Section 11 of CMSA to give the directive in order to uphold and maintain a fair and orderly securities market to safeguard public and investors' interests as well as take the appropriate action under the MMLR for the purpose of monitoring and ensuring compliance of MMLR,”.

Whilst materiality in the FFU is a valid reason, the court has seemingly omitted the consideration of substance over form.  FRS 5 Reporting the Substance of Transactions dictates that an entity’s financial statements should reflect the substance of the transactions entered into.  It should reflect the underlying realities of accounting transactions.

In other words, the information should not merely comply with the legal form in which they appear but should not hide its true intent, which would mislead the readers of the FFU.

The FFU which is neither true, false or conclusive may be legally valid (in form), however, the substance of it is that the FFU can be “interpreted differently”, “mis-interpreted” or “open to interpretation” when its readers are compelled to make a choice from it.

The FFU goes against a fair and orderly market and would continue to perpetuate unsubstantiated claims of FAFT (“Fraud and Financial Transgressions”)

When Serba Dinamik announced on 25^th May 2021 of being informed by the external auditors on some matters pertaining to statutory audit, and that Serba Dinamik was in the midst of appointing an independent firm to commence a special independent review (SIR) to assess the veracity and accuracy of the matters, the media had already implied that Serba Dinamik was at fault, before the SIR began, was in progress up to until its unresolved disputed release.

When the FFU which is neither true, false or conclusive, may be legally valid (in form) and can be “interpreted differently”, “mis-interpreted” or “open to interpretation” in the absence of “closure”, it also means zero probability of determining the veracity and credibility of such information.

This is deliberate manipulation with malice.

When manipulation with malice leads to contempt for Serba Dinamik, it will invariably suffer negative publicity and reputational loss.  Such contempt continues to be evidenced with endless cycle of

1. Spreading of misinformation for contempt for Serba Dinamik
2. A myriad of unsubstantiated allegations of FAFT on Serba Dinamik
3. Insinuation that the Board and Management of Serba Dinamik were deceptive, malicious and were due for incarceration
4. Insinuation that Serba Dinamik will not continue as a going concern
5. Seeking to harm, intimidate, or coerce those who wish to engage to eliminate confusion and/or seek clarity and
6. Seeking to harm, intimidate, or coerce those who wish to those who provided facts, reason, methods and evidence contrary to unsubstantiated allegations of FAFT. 

Source : Facebook - Would the FFU perpetuate unsubstantiated claims of FAFT?

Source : KLSEi3 forum - Would the FFU perpetuate unsubstantiated claims of  FAFT?

The sorry state of affairs of the Malaysian capital market

By requiring Serba Dinamik to disclose the FFU (which is against the Malaysian capital market rules) that Serba Dinamik vehemently disagreed, led to its suspension.  That later ensued with a particular media company and Minority Shareholder Watch Group (MSWG) CEO lobbying for the lifting of the suspension.

Furthermore, during the court hearing on 17th January 2022, Bursa's Datuk Loh Siew Cheang concurred with Serba Dinamik's counsel Mak Lin Kum that " that due to the suspension, Serba Dinamik is listed as a PN17 company".

Could this be another sorry state of affairs of the Malaysian capital market?

In Serba Dinamik hidden nominees and hidden proxy(ies) will reveal themselves, it was revealed that the capital market regulators had

• permitted and continue to permit investor shareholding disclosure in-adequacies;
• failed to investigate and disclose proxy ownership in Serba Dinamik.

and let perpetuate inaccurate market information about Serba Dinamik.

"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."

The decisions and actions undertaken by the Malaysian capital market regulators are bewildering to say the least, but as one might put it, if one were to look at the results, its not good.

In summary, the Malaysian capital markets regulators, in respect to Serba Dinamik, had

• permitted and continue to permit investor shareholding disclosure in-adequacies;
• failed to investigate and disclose proxy ownership in Serba Dinamik;
• caused Serba Dinamik to be listed as a PN17 company;
• at its decision to suspend Serba Dinamik being questioned by and lobbied by a particular media company and Minority Shareholder Watch Group (MSWG) CEO lobbying to revoke the suspension.

This is clearly an embarrassment for Malaysia.

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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.