EVEN as the odds are stacked against him, Serba Dinamik Holdings Bhd head honcho Datuk Dr Mohd Abdul Karim Abdullah must be credited for his ‘noble act’ of acquiring 5 million shares in the open market on Monday (May 31) at RM1.13, thus raising his stake in the company to 27.07%.
This is deemed an honourable act that any selfless company founder will do to defend the countless amount of ‘sweat, tears and blood’ that they have poured into their business.
On the same day, Kumpulan Wang Persaraan (Diperbadankan) disposed 152,200 shares which resulted in the institutional investor’s stake in Serba Dinamik reduced to 3.84%.
However, all eyes will be on the Employee Provident Fund (EPF) which has yet to disclose its latest change in substantial shareholding – in particularly since the global oil & gas (O&G) integrated engineering services provider resumed trading on Monday (May 31) following a two trading-session suspension.
Oblivious to what was brewing in Serba Dinamik, the EPF had in the month of May alone (between May 4 and 24) acquired 1.8 million shares in Serba Dinamik to bring its stake in the company to 10.16%.
Every businessman can feel the pain that Karim is going through with the S&P Global Ratings having downgraded Serba Dinamik’s credit rating on reduced funding access in addition to putting the company on credit watch negative on rising refinancing risks.
In this regard, Serba Dinamik faces heightened refinancing risk of its US dollar-denominated RM900 mil sukuk due in May 2022 because of weakened market access due to its pending special independent review.
“We believe the timing of Serba Dinamik’s announced special independent review to resolve issues found in an audit will complicate the company’s efforts to refinance nearly RM1.7 bil in debt over the next 12 months,” opined the international rating agency.
Back home, Malaysian Rating Corp Bhd (MARC) has placed its ratings of “MARC-1IS /A+IS” on Serba Dinamik’s RM500 mil multi-currency Islamic Commercial Papers Programme and RM1.5 bil Islamic Medium-Term Notes Programme with a combined limit of RM1.5 bil on “MARCWatch Negative”. The ratings were assigned on May 11.
“The MARCWatch placement arose from issues pertaining to the group’s annual accounts for financial year ending December 31, 2020,” the rating agency said on Monday (May 31).
“The rating agency notes that Serba Dinamik has addressed these issues in its recent briefing on May 29 which include customer confirmation on sales transactions and trade receivables following matters raised by external auditor KPMG PLT on May 3 pertaining to the statutory audit of the group for FY2020.”
Yesterday, the Malaysian Institute of Corporate Governance (MICG) joined the Institutional Investors Council (IIC) and the Minority Shareholders Watch Group (MSWG) in objecting to the proposal by Serba Dinamik board to remove KPMG for flagging the said audit matters.
“Criticising the auditors for addressing their concerns to the company’s independent directors is perverse, therefore, when that is exactly to whom the auditor is expected to direct any concerns,” MICG’s deputy president David W. Berry pointed out.
“Against that background, the silence of the audit committee and the company’s independent directors raises questions. More light is needed on the audit committee’s findings and its recommendation to the board.”
At 3.45pm, Serba Dinamik – which closed limit down on Monday (May 31) and briefly touched limit down level yesterday (June 1) – was down 0.5 sen or 0.6% to 83 sen with 331.12 million shares traded, thus valuing the company at RM3.09 bil. – June 2, 2021
