Is there a Dubai link to the AG’s decision to compound Serba?

WHILE the Dubai diplomatic fiasco has stolen the limelight from Prime Minister Datuk Seri Ismail Sabri Yaakob’s Middle Eastern tour of duty in late March, there is another development that has been concealed – till today at least.

A little bird in the know – someone in the PM’s entourage – has revealed that while visiting the Malaysia Pavilion @ Expo 2020 Dubai on the penultimate day of the global trade showcase, the PM had “bumped into” Serba Dinamik Holdings Bhd group managing director/CEO Datuk Mohd Abdul Karim Abdullah and few other directors who happened to be on-site.

This is not surprising given that the global integrated oil & gas (O&G) outfit was a premier partner for the Malaysia Pavilion.

Interestingly, the source also shared that the Serba Dinamik management team led by its head honcho Abdul Karim had a “short meeting” with the PM.

Back home, it is public knowledge that Serba Dinamik, Abdul Karim and three senior executives of the company were earlier charged with submitting a false statement to Bursa Malaysia Securities Bhd in relation to the revenue figure of RM6.014 bil contained in the company’s consolidated results for the quarter and year ended Dec 31, 2020.

On April 11, news broke out that the aforementioned Serba Dinamik’s top executives were expected to get compound offers after the Attorney-General’s Chambers (AGC)  accepted letters of representation on the matter despite objections from the Securities Commission (SC) and Bursa Malaysia Securities Bhd.

Eventually, the SC had on April 13 compounded Serba Dinamik and its four top executives RM3 mil each for the submission of false statement which was previously red-flagged by the company’s external auditor, KPMG PLC.

The four individuals were Abdul Karim, executive director Datuk Syed Nazim Syed Faisal who was chief financial officer (CFO) from June 2016 until mid-2020, its current group CFO Azhan Azmi, and vice president of accounts and finance Muhammad Hafiz Othman.

Muhammad Hafiz was also compounded an additional RM1 mil for falsifying the accounting records of Serba Dinamik’s subsidiary,

Well, FocusM has no intention of insinuating any connection between what transpired in Dubai at the Malaysia Pavilion and the AGC’s decision which culminated in the SC imposing a maximum compound on Serba Dinamik and its four top executives except to lay bare the chain of events.

Reacting to the compound settlement, the Minority Shareholders Watch Group (MSWG) has stated that in the interest of transparency, the AGC could “lift the veil of its absolute discretion and explain the reasons” for its decision.

This is because the criminal charges that the four executives faced were under Section 369(a)(B) of the Capital Market and Services Act (CMSA) 2007 are read together with Section 368(1)(b)(i) of the same Act.

This carries a maximum jail term of 10 years and a maximum fine of RM3 mil if one is convicted of the offence.

“In offering a compound, one must be mindful of not creating a dangerous precedent,” MSWG’s CEO Devanesan Evanson pointed out.

“It has been observed that some charges of lesser degree in the past were not compounded but went on to trial with resultant jail terms. We must be mindful of the message that we are sending to the capital market and potential wrongdoers.”

Anyway, the Serba Dinamik compound plot has thickened with the recent resignation of the SC’s executive chairman Datuk Syed Zaid Albar (last day on the job on May 31).

This has led to former finance minister Lim Guan Eng urging the PM and AG Tan Sri Idrus Harun to explain the resignation of Syed Zaid as his action can have repercussion on foreign investors’ confidence in Malaysia.

Meanwhile, Malay Mail reported that the SC has granted Serba Dinamik and its top executives a two-week extension to settle their compounds (from April 28 which was the original deadline to pay up).

“Sources said the company had appealed for an extension which was immediately rejected by the SC. A subsequent appeal was made by the company, citing difficulties in raising the money because their accounts had been frozen,” noted the English daily.

“Following discussions with the AGC, the SC agreed to extend the deadline by another two weeks which is understood to be on May 12.” – May 3, 2022


Pic credit: Serba Dinamik’s corporate website

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