KUALA LUMPUR (Aug 3): The Attorney General's Chambers' (AGC) decision to drop charges against Serba Dinamik Holdings Bhd and four of its executives, and instead fine them, has enabled punitive action to be taken immediately, said Minister in the Prime Minister's Department (Parliament and Law) Datuk Seri Dr Wan Junaidi Tuanku Jaafar.
In a written parliamentary reply to Sibu Member of Parliament Oscar Ling Chai Yew, he said while the decision appeared to have absolved the parties of legal liabilities, they were in fact fined RM16 million and paid the amount on May 9.
"The decision is an appropriate and reasonable one, based on the circumstances of the case. Before making the decision, the AGC had discussed with the Securities Commission Malaysia (SC) [regarding] the strength of the case. Following that, the AGC had deliberated the case carefully and considered the impact of criminal proceedings against Serba Dinamik from various angles, including the statement of the case that is circumstantial in nature, impact of long criminal proceedings against the future of the company, their employees' incomes which will be affected, the interests of Serba Dinamik's creditors and the overall economic impact," said Wan Junaidi.
"The compound imposed by the SC is also a form of punishment that is adequate for the wrongs committed after taking into consideration the circumstances of the case. Besides that, the compound amount is the maximum that can be imposed by the SC. Therefore, the compound imposed on Serba Dinamik cannot be considered as a light punishment.
"In any circumstances, the decision is one that is transparent, as the AGC had explained the grounds of the decision in a press statement dated May 13. The decision has succeeded in having the desired punitive effect and at the same time allows Serba Dinamik to correct their mistakes and take immediate action to comply with the rules of Bursa Malaysia and the SC, which before this, it had clearly complied with, without error," he added.
Ling had asked if the dropping of criminal proceedings against Serba Dinamik, which involved falsifying accounts, would affect Malaysia's image and foreign investors' confidence.
Prior to this, Serba Dinamik and its four top executives, including controlling shareholder Datuk Dr Mohd Abdul Karim Abdullah who is also the group managing director, were compounded RM3 million each for submitting a false statement involving a revenue of RM6.01 billion for its 12-month financial period ended Dec 31, 2020.
The company's audit saga started a year ago when its former auditor KPMG red-flagged issues on its financial accounts.
The executives were initially brought to trial by the SC for the offences after the regulator conducted an investigation into the audit issues raised by KPMG. However, they were offered the compound after the AGC accepted a letter of representation by the accused on the matter.
The SC, which issued the compound, said RM3 million was the maximum amount permissible under the Capital Markets and Services Act 2007 for submission of false information in the company's financial statements.
Beside Mohd Abdul Karim, the other executives were executive director Datuk Syed Nazim Syed Faisal, who was chief financial officer (CFO) from June 2016 until mid-2020; current group CFO Azhan Azmi; and vice president of accounts and finance Muhammad Hafiz Othman.
Muhammad Hafiz was also slapped with an additional RM1 million compound for falsifying the accounting records of Serba Dinamik's subsidiary.
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