KUALA LUMPUR (April 12): Serba Dinamik Holdings Bhd said there is a compound offer on the table in regard to its letter of representation to the Attorney-General’s Chambers (AGC).
In a statement on Tuesday (April 12), the oil and gas outfit, which is mired in an audit scandal, said that it had been advised by its solicitors that it is within the AGC’s discretion in regard to the offer of a compound.
The statement was addressing reports published on Monday by The Edge, Focus Malaysia and Malay Mail relating to Serba Dinamik’s letter of representation sent to the AGC, which suggested that a compound would clear or reduce the charges the group’s top executives face.
Serba Dinamik said that pursuant to Section 373(2) of the Capital Markets and Services Act 2007 (CMSA), a compound is intended to bring an end to the proceedings.
“The company and its officers agreed to the AG’s proposed terms of settlement in how the charges were to be dealt with,” the group said, but did not disclose any details of the aforementioned terms of settlement.
As of now, the AGC has yet to make an official statement on the matter, but Serba Dinamik said the legal authority “surely must have recognised the issues with the evidence and charges and proposed a settlement that would be a suitable resolution to the matter”.
“This was following consideration of the strength of the evidence to support the charges that were laid, the resources required in multiple courts to pursue all charges, the public interest and likelihood of success,” it added.
The group swamped in legal altercations highlighted that Monday’s reports on the matter stated that the Securities Commission Malaysia (SC) and Bursa Malaysia Securities Bhd had objected to the AG’s decision.
“If indeed this is true, we view with great concern that this objection is being made public. We would presume that any such communication would have been subject to secrecy obligations and is privileged,” it said.
However, the pair’s objections may fall on deaf ears as according to Serba Dinamik, in regard to the decision on the compound, the SC is required to seek the AG’s consent and not the other way around pursuant to Section 373 of the CMSA.
Serba Dinamik added that the SC’s involvement of Bursa in making the objections to the AG is “improper” as matters of decisions with regard to criminal prosecution are not subject matters that Bursa should be involved in.
The company said it had been advised by its solicitors that Bursa’s involvement in making objections to the AG is improper.
"Bursa is a private commercial entity, with profit-making objectives and is not involved with the criminal justice process.
“The SC’s objection to the AG is also highly improper as it suggests an interference with the AG’s constitutional role.
“What is left to be done is for the SC to issue the compound notice. Whether or not the SC and Bursa would want to explain their involvement in the objections to the AG’s exercise of discretion is a matter that they will have to explain themselves,” it added.
'A way to end the legal proceedings'
Serba Dinamik said that pursuant to Section 373(2) of the CMSA, a compound is intended to bring an end to the proceedings, adding that if the SC and Bursa’s objections are true, this suggests the pair “do not want to bring an end to the proceedings”.
Serba Dinamik added that Monday’s reports on the matter also suggested that the SC would bring proceedings to bar the persons charged from being directors of the company, but the group cautioned that this would be detrimental to the interest of the company, its creditors and shareholders.
“The company has taken steps to address as a matter of priority the repayment of amounts owing to lenders and trade creditors and, in tandem with that, the interests of its shareholders will also have to be preserved.
“What is reported by the press of the SC’s alleged intended actions of disqualifying management personnel, coupled with the alleged objections by the SC and Bursa to the AG’s decision, give rise to inference that there is a significance motivation to cripple the business of the company,” Serba Dinamik said.
Serba Dinamik, in the “interests of producing finality”, further claimed that the offer of the compound should be accompanied by the discontinuation of any insistence by Bursa that the factual findings update (FFU) is to be announced.
The group claimed that “the real inference” as to why Ernst & Young Consulting Sdn Bhd (EY Consulting) had refused to sign off on the FFU was that it was not prepared to defend the statements made in the latter.
“The position that Bursa seeks to put the company into is for the company to adopt the FFU when it was not made by the company in the first place,” it added.
On Dec 28, Serba Dinamik was charged under Section 369(a)(B) of the CMSA involving a false statement relating to a revenue of RM6.014 billion recorded by the group in its consolidated results for the quarter and year ended Dec 31, 2020.
On the same day, the oil and gas giant’s executive director Datuk Syed Nazim Syed Faisal, group chief financial officer Azham Azmi, and vice-president of accounts and finance Muhammed Hafiz Othman were each charged with the same offence under Section 369(a)(B), read together with Section 367(1) of the same Act.
Its chief executive officer Datuk Mohd Abdul Karim Abdullah, after failing to appear in court on Dec 28, was charged with the same offence a day later. Muhammad Hafiz was also separately charged in the Shah Alam Sessions Court for alleged direct involvement in instructing the preparation of false documents relating to sales of the group’s unit Serba Dinamik Sdn Bhd.
Separately, Serba Dinamik is locked in a legal battle with Bursa after the latter filed a civil suit against the group for failing to comply with the bourse operator's directive to release the FFU of the special independent review conducted by EY Consulting.
Under the suit, Bursa is seeking to force Serba Dinamik to reveal the review updates to the public.