ON Nov 8, Serba Dinamik Holdings Bhd announced that it had taken legal action against the frontline regulator of capital market Bursa Malaysia Securities Bhd .
This action is unprecedented based on the facts of the case. One of the factors on which the legal action pivots is the contents of the ‘Factual Finding Update’ of the Special Independent Review (SIR) conducted by Ernst & Young Consulting Sdn Bhd (EY) who incidentally is also being sued by Serba Dinamik.
On Oct 22, Bursa Securities suspended the trading of securities (including all structured warrants) of Serba Dinamik and issued a directive to the company to disclose the contents of the ‘Factual Finding Update’ by Oct 2.
The non-compliance to the directive would result in the continued trading suspension of Serba Dinamik’s securities on the next market day (Oct 27) after the directive deadline.
In a media release, Bursa Securities noted that the findings from the ‘Factual Findings Update’ as of Sept 30 on the SIR have been communicated to three out of four Serba Dinamik’s independent non-executive directors on Oct 21.
It was also reported that the presentation by EY was also attended by representatives from Bursa Securities.
Bursa Securities was of the view that the contents of the ‘Factual Finding Update’ are material enough to be disseminated to the public to ensure the orderly and fair trading of Serba Dinamik’s securities. However, Serba Dinamik disagreed.
Consequently, Serba Dinamik did not disclose the findings of the ‘Factual Finding Update’. The company gave its reasons why it was unable to disclose the contents.
There is thus a difference of opinion between Serba Dinamik and Bursa Securities. Bursa Securities then continued to maintain the suspension on the trading of Serba Dinamik’s securities due to this non-disclosure.
MSWG is not aware of the contents of the ‘Factual Finding Update’ and as such is unable to opine on the materiality of the findings.
On Nov 12, the SC as the statutory regulator of the capital market has assured the investing public that it has made progress on its investigation into Serba Dinamik and additional resources have been added to the team to ensure the investigation is completed in a timely manner.
As Serba Dinamik has taken legal action against Bursa Malaysia (and EY), the issue is now in the realm of the courts and MSWG awaits the timely resolution of the case in the interest of minority shareholders. – Nov 15, 2021
Devanesan Evanson is CEO of the Minority Shareholders Watch Group (MSWG).
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
