SERBA Dinamik Holdings Bhd wishes to state that the cover story entitled “What Serba Dinamik did not want you to know” published in this week’s The Edge Weekly (issue March 28-April 3) is inaccurate, deliberately incomplete and calculated to prejudice Serba Dinamik.

It is time to understand the other side of this story by connecting the dots that have not been hitherto marshalled together.

In early May 2021, KPMG PLT refused to continue its audit of Serba Dinamik and refused to resign, hence blocking the way for another auditor to be appointed.

KPMG then lodged a complaint to Securities Commission Malaysia (SC) and Bursa Malaysia Securities Bhd. On May 18 last year, the SC conducted a raid on Serba Dinamik but only provided a sketchy inventory of what was seized.

KPMG resigned on or around June 24, 2021 after being sued by Serba Dinamik.

In late June and early July last year, Bursa Malaysia directed the appointment of Ernst & Young Consulting Sdn Bhd (EYC) after reviewing and finalising the terms of engagement which categorically stated that no interim report which includes the Factual Findings Update (FFU) will be prepared by EYC – even for SC and Bursa Malaysia.

Between July and September 2021, EYC attended a meeting with SC and had drawn up the FFU. EYC had kept it hidden from Serba Dinamik that the FFU was made available to SC and Bursa Malaysia – this fact was only revealed at end-October 2021.

By Oct 22, Bursa Malaysia directed Serba Dinamik to announce the FFU, a document which it did not have then.

On Dec 27, 2021, the SC issued charges against Serba Dinamik, its two directors and two management personnel. Three dates have elapsed in the Criminal Courts where SC has failed or refused to provide documents that will substantiate the charges they have brought against Serba Dinamik.

Earlier on Oct 22, 2021, Bursa Malaysia directed Serba Dinamik to announce the FFU when the company has yet to have a copy of it. The market regulator’s directive was followed by an immediate suspension in the trading of Serba Dinamik’s securities which remains until today.

EYC admitted to releasing the FFU to SC on or about Oct 11, 2021 despite expressly undertaking in their letter of engagement that they would not so such thing.

Noteworthy is that in preparation of the FFU, EYC did not interview any personnel from Serba Dinamik although they have acknowledged by a letter dated Oct 29, 2021 that they were required to do so.

EYC refuses to sign affidavit

EYC’s letter of engagement further stated that they could be appointed under Main Market Listing Requirements (MMLR) 2.24 when they are not in fact an auditor. In a High Court decision delivered on Feb 7, it was ruled that EYC was an auditor.

In a separate suit filed by Serba Dinamik, the High Court agreed that EYC is not an auditor but they did have an arrangement with a licensed auditor. The implication was that Serba Dinamik could not regard the letter of engagement issued by EYC as being void.

Since Serba Dinamik is not the author of the FFU but was being compelled by Bursa Malaysia to announce it, EYC was invited by Serba Dinamik to sign off its FFU but EYC refused to do so.

EYC repeatedly refused to sign their affidavits filed in court. Serba Dinamik further recalled that it was Bursa Malaysia who participated in finalising the terms of engagement between the company and EYC, and had knowledge of the terms of engagement whereby EYC was not to prepare any FFU.

Bursa Malaysia also requested Serba Dinamik to procure EYC’s consent to allow the announcement of the FFU which EYC had replied that it was not their problem to deal with.

The market regulator then filed proceedings pressing for the announcement of the FFU on the basis that it should be announced because it exists.

It now appears convenient and greatly sensational to suggest that Serba Dinamik does not want anyone to see the FFU. It is Serba Dinamik’s stance that what EYC should do is to sign off the FFU and then field questions (including from The Edge Weekly) concerning them.

Putting Serba in bad light

What The Edge Weekly has reported suggests that Serba Dinamik is hiding something while it is instrumental in creating a misleading narrative. What The Edge Weekly doesn’t emphasise is the fact that EYC refused to sign the FFU, EYC was not to prepare any interim report, and that no FFU should be furnished to SC and Bursa Malaysia.

EYC had stopped working on their letter of engagement since October 2021 despite maintaining that their letter of engagement is valid.

In essence, third parties have been able to put themselves into a position of being able to make prejudicial statements about Serba Dinamik with impunity as evident by EYC refusing to sign and have conveniently allowed the FFU to be placed in the public domain.

Serba Dinamik would like to remind The Edge Weekly that it is EYC who should answer what they have written.

As it stands, there is no indication that The Edge Weekly had verified anything with EYC, the FFU remains unsigned, and Serba Dinamik was put in a bad light.

Against the narrative that Serba Dinamik is attempting to hide the FFU, questions that should be raised are (i) why did Bursa Malaysia compel Serba Dinamik to announce the FFU when it knew that it was not a document that was supposed to be prepared under the letter of engagement, (ii) why did EYC refuse to sign what they have written; and (iii) why did SC charged Serba Dinamik and its managements and yet refused to produce the necessary documents?

Now, let’s move to the question as to whether it is fair to say that Serba Dinamik is trying to hide something? It must be crystal clear now that it is not Serba Dinamik who prepared the FFU.

Furthermore, the above questions are directly questioning where legal redress is being sought in court. Serba Dinamik has lost at the High Court in seeking a declaration that Bursa Malaysia had acted in breach of the MMLR.

Serba been significantly prejudiced

Serba Dinamik has also lost its bid to seek a declaration of EYC as not an auditor and their invalid letter of engagement. Bursa Malaysia has succeeded in its application to seek a court order to compel Serba Dinamik to announce the FFU which is pending hearing of a stay application at the Court of Appeal.

Serba Dinamik has appealed all cases it did not succeed in the High Court.

A very key matter that the SC, Bursa Malaysia, EYC and The Edge Weekly must square up is that SC has charged Serba Dinamik and four individuals by claiming that the company’s RM6 bil in revenue is a false statement.

However, SC has only charged one person relating to the creation of false records in relation to one subsidiary whereas that subsidiary had never and could never produce the RM6 bil revenue.

SC has not raised any charges in relation to the records of other subsidiaries which may account for the RM6 bil reported in Serba Dinamik’s December 2020’s quarterly financial statement.

The Edge Weekly’s article identifies various amounts which do not amount to RM6 bil no matter how they are added up.

The shareholders, creditors and Serba Dinamik itself have been significantly prejudiced. For the record, the only signed documents are charges brought by SC stating that Serba Dinamik had made a false statement only with respect to the consolidated figure of sales.

In relation to the fourth quarterly financial statements for Dec 31, 2020, the charges extends to falsification of accounting records of a subsidiary that does not have RM6 bil in sales.

SC has yet to surface or provide the documents that will allow Serba Dinamik and its management to defend themselves during this time.

The Edge Weekly has engaged in reporting a multitude of alleged wrongdoings by Serba Dinamik in a fait accompli fashion. Serba Dinamik expects SC to follow through with the trial of the charges in an expeditious fashion. — March 29, 2022

Serba Dinamik Holdings Bhd is a global integrated oil & gas (O&G) service provider.

https://focusmalaysia.my/two-sides-of-the-coin-lending-an-ear-to-serbas-side-of-the-story/