WITH odds of sorts stacked against it, one cannot be blamed for feeling pessimistic side if Serba Dinamik Holdings Bhd would ever rise from the lowest ebb in its corporate history.

Yesterday (Nov 12), FSMOne Malaysia (previously Fundsupermart.com Malaysia) informed bondholders that it has received notice from the trustee of SDHMK 6.300% 9 May 2022 Corp (USD) bond that the coupon payment due on Nov 9 has not been received from the bond issuer (SD International Sukuk Ltd) nor from the guarantor (Serba Dinamik itself).

“Investors are reminded at the moment that this non-payment does not constitute a breach as bond covenant allows 30 days grace period for issue to make good on the payment, failing which will only trigger an official default,” the FSMOne notice pointed out.

Interestingly, however, both outstanding bonds of the issuer – SDHMK 6.300% 9 May 2022 Corp (USD) and SDHMK 6.997% 12 March 2025 Corp 9USD – contains cross default provisions which means that if the bond issuer defaults on one bond, a cross default on the other bond would be triggered.

At this juncture, FocusM has learnt that the integrated global oil & gas service provider has taken every measure within its jurisdiction to remedy the situation within the 30-day grace period.

“The management has given its commitment to fulfill the payment within this two-week pending receipts from our revenue collections,” noted a source.

Being pushed to a corner

Nevertheless, the bond default issue certainly pales in comparison compared to the latest remark by the Securities Commission (SC) which broke its silence in view of the legal suits by Serba Dinamik against its former auditor KPMG PLT, Bursa Malaysia Securities Bhd, and Ernst & Young Consulting Sdn Bhd (EY) which the company appointed to conduct a special independent review (SIR).

The regulator has assured the investing public that it has made progress on its investigation and that additional resources have been added to the team to ensure the investigation is completed in a timely manner, according to The Edge.

As the capital market regulator, the SC stressed that it is empowered under securities laws to investigate and enforce any transgression or potential transgression of securities laws, SC guidelines and rules of the stock exchange.

“The SC will evaluate all available evidence and take any appropriate action as is deemed necessary. As investigation is ongoing, the SC is not able to comment further on this,” said the SC in an e-mail reply to The Edge.

While the SC has made its stand clear from a market regulator perspective, The Edge also reported that Serba Dinamik has failed in its bid to obtain an interim injunction against Bursa Securities and EY to stop them from releasing a report on findings against the company.

The High Court, however, granted the company’s request for an adjournment of the hearing of the injunction application to respond to the affidavits filed by Bursa and EY.

Serba Dinamik had on Nov 5 filed a lawsuit against EY seeking to restrain the auditor from sharing any findings or opinions on the company.

The company had earlier initiated a legal action against Bursa Securities over the appointment of EY as the auditor to conduct a SIR which the company claimed was in “excess of power, null and void and of no effect”. – Nov 12, 2021