CEO Morning Brief

Serba Dinamik Crumbles on Selling Pressure, Hits All Time Low at 10 Sen

Publish date: Tue, 10 May 2022, 09:29 AM
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TheEdge CEO Morning Brief
Serba Dinamik crumbles on selling pressure, hits all time low at 10 sen

KUALA LUMPUR (May 9): Selling pressure on Serba Dinamik Holdings Bhd persists throughout the stock’s first day back in trading, after being suspended since October last year due to an audit issue.

The heavy selling activity pulled Serba Dinamik’s share price to an all-time low of 10 sen during the second trading session of the day.

At 3.56pm Monday (May 9), Serba Dinamik was trading at 11 sen, down 24 sen or 68.6%. The counter was last traded at 35 sen prior to the trading suspension. It fell from a peak of RM1.61 in May last year after Serba Dinamik was embroiled in an audit saga which later became a legal tussle with its former auditor KPMG and the regulators.

The company’s warrants stood at 2.5 sen, losing 4.5 sen or 64.3%.

Trading volume swelled to 545.19 million shares, which was equivalent to 30.76% of its total free float shares on the open market.

The oil and gas firm was the most actively traded stock across Bursa Malaysia.

Meanwhile, its warrants, which saw 107.92 million units changing hands, were the third most actively traded counter.

At the close of Monday, Serba Dinamik’s shares settled at 11sen, while its warrants closed at 3 sen.

Notably, several brokers have demanded cash upfront for purchase of beleagured company’s securities.

In a note to its clients, Affin Hwang Investment Bank said that effective Monday, the cash upfront requirement shall be imposed on any buy orders for Serba and its warrants.

“If you wish to buy Serba and/or its warrants, please ensure you have sufficient cash in your trust account and contact your dealer’s representative;

“Serba and its warrants are classified as NON-MARGINABLE counters and no value is given to the stocks in term of collateral valuation,” it said.

Meanwhile, in an email to Kenanga remisiers, they were told that “due to the uncertainties of Serba Dinamik’s financial condition and the Special Independent Review, with effects from May 9, purchases involving Serba Dinamik’s securities are not permitted except with 100% CASH UPFRONT prior trade execution”.

“Upliftment in BTX can be done at the branch level, please remember to suspend back once the order(s) has been keyed-in,” they were told.

Last month, Serba Dinamik said in a bourse filing that it is looking into formulating a plan to regularise its financial condition and the company has approximately nine months to submit its regularisation plan to the relevant authorities for approval.

The company slipped into Practice 17 (PN17) status in January, after its external auditor Nexia SSY PLT expressed a disclaimer of opinion over its audited financial statements for the 18-month financial period ended June 30, 2021.

On April 13, the Securities Commission Malaysia (SC) compounded Serba Dinamik, its chief executive officer cum group managing director Datuk Dr Mohd Abdul Karim Abdullah and three other top executives RM3 million each for submitting a false statement involving a revenue of RM6.01 billion for its financial period ended Dec 31, 2020 (FY20).

The other three individuals were executive director Datuk Syed Nazim Syed Faisal, group chief financial officer Azhan Azmi, and vice president of accounts and finance Muhammad Hafiz Othman, who was also issued another compound of RM1 million.

This followed the decision of the public prosecutor to accept the representation made to the Attorney General’s Chambers by Serba Dinamik and the individuals involved regarding the charges pending in court.

The issue with the FY20 revenue was first raised by KPMG to Serba Dinamik’s board in May last year. At the time, KPMG also flagged Serba Dinamik’s sales transactions, trade receivables and payables, material on site balances, as well as how it was unable to verify the counterparties involved.

The company appointed Ernst & Young Consulting Sdn Bhd (EY Consulting) to conduct a special independent review on KPMG’s claims.

However, Serba Dinamik then filed a lawsuit against KPMG, who refused to sign off on the company’s FY20 accounts, which resulted in KPMG resigning as its external auditor. Serba Dinamik’s independent directors also resigned in protest of the suit.

Subsequently, Serba Dinamik sued the stock exchange Bursa, whom it claimed had overstepped its authority in the audit issue as the bourse compelled it to release EY Consulting’s findings, as well as applied for an injunction to try to stop EY Consulting from revealing its findings, which the court rejected.

Source: TheEdge - 10 May 2022

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financial losses 119mil
cash flow 218mil
short term loan 1.4b
long term loan 2.2b
current liabilities 2.4b

2022-05-10 10:11


2020 oil prices negative usd make 2021 financial losses ... heavy debt tight rolling in 2021

2022-05-10 10:14


Need restructuring in 2022

2022-05-10 10:14

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