KUALA LUMPUR (May 31): Orient Arotek Engineering & Trading Sdn Bhd (OAE) was allowed to intervene in Serba Dinamik Development Sdn Bhd's (SDDSB) application for a scheme of arrangement and a restraining order (RO) against its creditors by the High Court on Tuesday.

Besides Serba Dinamik Holdings Bhd and SDDSB, the three other companies that had filed for RO and scheme of arrangement were Serba Dinamik Group Bhd (SDGB), SD Controls Sdn Bhd (SDCSB), and Serba Dinamik Sdn Bhd (SDSB).

Justice Atan Mustaffa Yussof allowed OAE — one of the group's creditors — to intervene as Serba Dinamik Holdings' lawyers did not object to the application.

"Permission is granted for the proposed interveners, OAE, to intervene in the proceedings. OAE will be a party in the proceedings as an intervener. OAE are allowed to file affidavits in objection on any interlocutory application," he said. OAE is a construction company involved in factory, refinery and warehouse steel structure, piping, vessel, storage tank, M&E and civil works as listed in one of its websites. It had earlier intervened in SDDSB's application to be placed under judicial management, which was objected by several creditors.

Previously, on May 19, Justice Atan Mustaffa fixed (Thursday) June 2 to hear the scheme of arrangement involving SDDSB, Serba Dinamik Holdings, its three other companies SDSB, SDGB, and SDCSB under Section 366 of the Companies Act.

The judge also fixed June 7 to deliver his decision on the scheme of arrangement and whether to grant the RO or otherwise.

Under Section 366 of the Act, companies could seek leave (permission) from the court for them to convene a meeting with their creditors to resolve their debts.

Six main financial institutions, namely HSBC Amanah Malaysia Bhd, Ambank Islamic Bhd, Bank Islam Malaysia Bhd, MIDF Amanah Investment Bank Bhd, Standard Chartered Saadiq Bhd and United Overseas Bank (Malaysia) Bhd, which are syndicated and bilateral lenders, filed a winding-up petition against the group and its subsidiaries in April, which was fixed before a different High Court for hearing on June 8.

This followed the company's failure to service its RM1.2 billion syndicated term financing.

Serba Dinamik Holdings said it is seeking creditors' approval for a scheme of arrangement to restructure the group's debt obligations, which proposed "a 100% return to the company's creditors".

The group said it has identified "some assets for immediate sale" to generate the cash flow required to meet the group's liabilities, it added.

Serba Dinamik Holdings along with two executive directors and two senior management members were charged last December with submitting a false statement involving a revenue of RM6.01 billion for the 12-month period ending Dec 31, 2020, which had previously been flagged by the group's external auditor KPMG.

The issue with the financial year 2020 revenue was first raised by KPMG to Serba Dinamik Holdings' board in May 2021, which escalated into legal tussles between Serba Dinamik Holdings and regulators when the company refused to publish its special independent review.

However, in April, the Attorney General's Chambers accepted a representation made by the company and the four were compounded a total of RM16 million and had the charges withdrawn.

The compound was settled on May 9.