KUALA LUMPUR (July 25): A subsidiary of Serba Dinamik Holdings Bhd failed to auction off a plot of "project land" it was ordered to put on sale by the court to settle a loan from MBSB Bank Bhd that it had defaulted on.

The sale was undertaken by the group's wholly owned Serba Dinamik Group Bhd (SDGB) between March 30 and July this year, according to a bourse filing on Tuesday (July 25). No other details of the land were provided.

The court granted the order for the sale to MBSB on Oct 13, 2022, after Serba Dinamik and its wholly owned units identified assets for immediate sale to generate cash flows required to meet the group’s liabilities and restructure its debt obligations.

Serba Dinamik announced in July that year that SDGB had, due to constrained cash flows, defaulted on loan facilities it took out from MBSB and Bank Kerjasama Rakyat Malaysia under an Islamic club financing arrangement that amounted to RM400.77 million.

Following the non-payment, MBSB, as the custodian bank, initiated legal proceedings against SDGB to exercise its rights as a secured creditor, in accordance with the terms of the financing agreement.

Besides MBSB and Bank Kerjasama Rakyat, Serba Dinamik and its subsidiaries have defaulted on loan facilities it secured from several other financial institutions, including the Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank).

Serba Dinamik fell into Practice Note 17 status on Jan 6 last year, after its external auditor expressed a disclaimer of opinion on the group's audited financial statements for the 18-month financial period ended June 30, 2021.

Four days later, the High Court allowed a petition filed by six financial institutions to wind up the group, SGDB and two other subsidiaries, over the non-payment of loans amounting to RM1.7 billion out of some RM5 billion worth of debts the four owed financial institutions and sukuk holders.

The six were Standard Chartered Saadiq Bhd, HSBC Amanah Malaysia Bhd, AmBank Islamic Bhd, MIDF Amanah Investment Bank Bhd, United Overseas Bank (Malaysia) Bhd, and Bank Islam Malaysia Bhd.

Serba Dinamik and the three units have also been placed under liquidator Victor Saw Seng Kee from PricewaterhouseCoopers Advisory Services Sdn Bhd since then.

Earlier this month, the High Court allowed Saw's application to continue the operations of the four companies until July 8, 2024, as the liquidator said it was necessary for their beneficial winding-up.

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