FIRST the good news: the Institutional Investors Council Malaysia (IIC) is happy with Serba Dinamik Holdings Bhd for retracting the notice to convene an extraordinary general meeting (EGM) to remove the company’s external auditor, KPMG PLT and have it replaced with BDO PLT.
Recall that IIC has three members who hold large stake in the global integrated oil & gas (O&G) service provider, namely the Employees Provident Fund (EPF) (10.16%), Permodalan Nasional Bhd (PNB) (5.34%) and Kumpulan Wang Persaraan DiPerbadankan (KWAP) (4.53%).
The not so pleasant piece of news is that IIC is disappointed with the company’s independent non-executive directors (INEDs) for declining to engage with its members on June 3 (Thursday).
“IIC was made to understand that the INEDs would be issuing a statement and that any queries should be conveyed via e-mail,” IIC adviser Lya Rahman told FocusM.
“This is against the principle of encouraging engagement with major shareholders. At the very least, the INEDs could have initiated a virtual engagement considering movement restriction in view of the imposition of the total lockdown nationwide (from June 1 to 14).
“After all, the ultimate objective of the request for engagement is to seek independent clarification on vital issues surrounding Serba Dinamik from the INEDs.”
On the hindsight, Lya is happy to note that the five INEDs have given their assurance to ensure that the company’s corporate governance is at the highest level and that the INEDs will remain independent in executing their responsibilities.
Meanwhile another subject matter expert on governance told FocusM that the pertinent issues that need to be addressed include timing of the independent reviewer which has yet to be ascertained.
With this, he said the INEDs need to identify the steps to ensure timely completion of the statutory audit.
“In the first place, do the INEDs have the relevant experience to undertake crisis management of this magnitude and what are the steps they are taking to prevent from further erosion of the market value in the best interest of the company?” asked the subject matter expert who spoke on condition of anonymity.
“However, the speed and visibility of the INEDs in executing the relevant steps are something that may need to be addressed urgently.”
Profuse bleeding
Meanwhile, amid a fluid scenario with the counter hitting a new low of 61 sen, Serba Dinamik has again denied that there was an element of related party transaction in the undertaking of Block 7 Investments, a joint venture between Efire Capital and Serba Dinamik for the development of the Block 7 Innovation Hub in the Industrial City of Abu Dhabi (ICAD).
This follows the signing of a long-term land lease agreement on April 24 by Block 7 Investments with Abu Dhabi Government-owned ZonesCorp, one of the largest operators of purpose-built economic zones in the United Arab Emirates.
Serba Dinamik is the 49% owner and Liwa Investment owned 51% of Efire Capital. On March 2, upon the finalisation the land matter with ZoneCorp, Efire Capital become the 99% owner and Liwa Investment retained 1% direct ownership of Block 7.
“This move is to strengthen Serba Dinamik’s strategy to own a strategic asset worldwide. Prior to that, Block 7 is 100% owned by Liwa Investment where the appointment of Serba Dinamik for undertaking the RM7.7 bil contract was made,” explained Serba Dinamik in a WhatsApp text sighted by FocusM.
“To-date, Serba Dinamik had not recorded any revenue for the above but has even incurred some preliminary consultants’ fees for the project. Save as disclosed above, none of the directors/major shareholders of Serba Dinamik has any direct/indirect interest in Block 7.”
At the close of today’s trading, Serba Dinamik shed another 14.5 sen or 18.95% to 62 sen with a hefty 535.31 million shares traded while its market capitalisation further shrunk to RM2.31 bil. – June 8, 2021
