(Updated)

AGC opted for Serba Dinamik compound as SC evidence 'circumstantial', compound means public interest 'better served'

Idrus said criminal proceedings

Idrus said criminal proceedings "ought not be pursued" against Serba Dinamik and the executives "due to the economic consequences". (File photo by Low Yen Yeing/The Edge)

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KUALA LUMPUR (May 13): Following a long period of silence on the Serba Dinamik Holdings Bhd criminal proceedings-turned-compound, the attorney general has now come out to say its decision for the compound was grounded on its stance that the evidence against the accused parties was "circumstantial in nature".

The Attorney General's Chambers (AGC), which in December 2021 consented for the Securities Commission Malaysia (SC) to prosecute Serba Dinamik and four top executives for allegedly issuing false statement to Bursa Malaysia, switched its consent to a compound in March 2022 following a letter of representation from the accused.

The accused parties paid the compound totalling RM16 million after some delays. They have been given a discharge and acquittal, a lawyer representing them told The Edge on Friday (May 13).

In a three-page statement, Attorney General Tan Sri Idrus Harun said that the AGC was of the view that "public interest would be better served" by compounding the offences allegedly committed.

This, he said, was "in light of the evidence in support of the charges and to avoid a long and protracted trial". However, the statement did not elaborate on the acquittal.

Idrus said criminal proceedings "ought not be pursued" against Serba Dinamik and the executives "due to the economic consequences".

Further, he said the impact of the charges on Serba Dinamik "is disproportionate with the severity of the alleged offences committed", rather, the compound was "an adequate form of punishment".

"This would then allow Serba Dinamik to focus on rectifying errors and effecting immediate compliance with regulations of Bursa Malaysia and the SC, as Serba Dinamik had clearly done so in the past without fault," he said.

Why AGC consented with prosecution previously

Idrus explained in the statement that in December 2021, the SC presented its investigation findings to the AGC, and recommended the parties to be prosecuted, the attorney general said.

The AGC noted that the evidence was circumstantial in nature, however the SC convinced the AGC that "prosecution was a necessary course of action for this case", which subsequently resulted in the parties being charged in court on Dec 28.

Idrus added that the subsequent letter of representation by Serba Dinamik and the executives requested the AGC to reconsider the charges and proposed for a compound instead, among others.

"The said letter from Serba Dinamik was forwarded to the SC for their immediate attention. Thereafter, the AGC discussed the said representation letter with investigating officers from the SC. The matter was also discussed by the attorney general with the SC's chairman (Datuk Syed Zaid Albar).

"Subsequently, upon request from the AGC, the SC submitted its investigation paper to the AGC," Idrus said.

He said after perusing the said investigation paper and considering the said representation letter by Serba Dinamik, the AGC agreed with the proposal to compound the alleged offences.

This took into account "the circumstantial nature of available evidence", among others.

"Furthermore, Serba Dinamik and the said executives were willing to accept the maximum amount of compound imposable by the SC," he justified.

Idrus said the compound means that the need for punitive action against the alleged offenders "is immediately achieved" without going through trial.

Thereafter, Serba Dinamik could redirect resources and time to coordinate with the authorities to comply with the requirements of the law.

"The AGC is mindful of the standard proof required of the prosecution to prove the charges based on the evidence available and [is] strongly of the view that compounding the offences allegedly committed by Serba Dinamik and its executives is the most appropriate action to take under the circumstances.

"Furthermore, Serba Dinamik and the said executives were willing to accept the maximum compound imposable by SC," he added.

This is the first statement from the AGC since news broke of the chamber's decision to accept the representations from Serba Dinamik and its executives, which led to the SC's move to compound the accused parties' charges.

Serba Dinamik, its group chief executive officer and group managing director Datuk Dr Mohd Abdul Karim Abdullah, executive director Datuk Syed Nazim Syed Faisal, chief financial officer Azhan Azmi and vice president of accounts and finance Muhammad Hafiz Othman were charged under Section 369(a)(B) of the Capital Markets and Services Act for submitting a false statement involving revenue of RM6.01 billion for its financial period ended Dec 31, 2020.

The five accused parties were imposed compound of RM3 million each by the SC, while Hafiz was compounded an additional RM1 million for a separate charge.

Previously, Malaysian Bar vice-president Mohamad Ezri Abdul Wahab had called for the AGC to issue a statement to provide the details behind its decision to opt not to prosecute but instead issue a compound to the accused parties.

Mohamad Ezri said the Malaysian Bar was concerned with the AGC's lack of transparency, given the significant impact of the decision on the integrity of the capital market's governance and the regulatory framework.

Adam Aziz