KUALA LUMPUR (Nov 11): Serba Dinamik Holdings Bhd has failed in its bid to obtain an interim injunction against Bursa Malaysia Securities Bhd and Ernst & Young Consulting Sdn Bhd (EY) to stop them from releasing a report on findings against the company.

The High Court, however, granted Serba Dinamik's request for an adjournment of the hearing of the injunction application to respond to the affidavits filed by Bursa and EY.

“I will allow the plaintiff (Serba Dinamik) to respond to the affidavits following their request within one week of today (Nov 11). As to their request for an ad interim [injunction] and balancing in the interests of justice, this court orders that no ad interim order be granted," ruled Justice Datuk Ahmad Fairuz Zainol Abidin.

“The company cannot profit from its unpreparedness for them to proceed on the two matters this morning,” said the judge.

Serba Dinamik on Nov 5 filed a lawsuit against EY seeking to restrain the auditor from sharing any findings or opinions on the company.

The company also filed an application for an interim injunction, which was fixed for hearing on Thursday after the company also filed a certificate of urgency for the application to be heard as soon as possible.

It earlier sued Bursa over the appointment of EY as the auditor to conduct a special independent review (SIR), which the company claimed was in "excess of power, null and void and of no effect".

Bursa's lawyer Datuk Loh Siew Cheang and EY's counsel Gopal Sreenevasan had objected to Serba Dinamik's counsel Mohamed Izzul Faris' application for an adjournment and for an interim injunction to be given as they were prepared to argue the case.

Loh argued that it was Serba Dinamik which had opted to take in EY to conduct the SIR after it was not satisfied with the audit issues raised by its former external auditor KPMG.

“It was them (Serba Dinamik) that wanted EY and not us. They say it was our directive, which is not correct and the press releases issued by them shows this. We have not committed anything as we have not even released the report. If this court grants an ad interim injunction, it would act as an injunction and we sincerely object to this and are prepared to argue.

“Furthermore, it is Serba Dinamik which has filed a certificate of urgency to have this matter heard and we are here. When a certificate of urgency is filed in the court, it means to rescue the litigant and for the court to address immediately — and now they are asking for an adjournment,” Loh said.

Similarly, Gopal in his submission to object the adjournment and interim injunction said Serba Dinamik had been working with EY for four months from July to October.

“Prior to this, they did not make it an issue that it is necessary for EY to be an auditor with the Audit Oversight Board. The issue of not being registered did not arise.

“An inference from this [legal] action is that the plaintiff is not happy with the findings [made by EY] and we similarly object to an adjournment. The injunction they (Serba Dinamik) sought against us from releasing the findings even to the regulatory statutory bodies could be against the scope agreed upon and what our obligations are,” Gopal said.

Mohamed Izzul, who appeared with counsel Mak Lin Kum who came slightly before the decision was made, had asked for an adjournment of the injunction application as they had to reply to the affidavits filed by Bursa on Wednesday and EY on Thursday.

Despite this, Mohamed Izzul had requested for the court to grant the interim imjunction to maintain the status quo.

He argued that some of the exhibits cited by the lawyers for Bursa and EY were not in Serba Dinamik's possession and that was the reason they sought the adjournment.

Mohamed Izzul maintained that Bursa had not explained the breaches and the main point is that they (Bursa and EY) are attempting or threatening to announce the breaches on behalf of the plaintiff — which they are contesting.

Earlier, the court allowed counsel Christopher Leong's application to hold a watching brief for the Securities Commission Malaysia (SC) as he claimed that the relief sought would also affect the commission as a regulatory body.

After getting no objections from Mohamed Izzul, Justice Ahmad Fairuz allowed the application.