Serba Dinamik CEO: Block 7 deal not a related party transaction as I didn't take up shares personally

Serba Dinamik CEO: Block 7 deal not a related party transaction as I didn't take up shares personally
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KUALA LUMPUR (June 22): Serba Dinamik Holdings Bhd has defended its involvement in the RM7.7 billion project with little-known Block 7 Investment LLC, and denied any nature of related party transaction (RPT) in the project.

Questions have been raised about the mega contract, which was secured by Serba Dinamik’s wholly-owned subsidiary Serba Dinamik Investment Ltd (SDIL) in April 2020.

This is because SDIL also owns a stake in Block 7 through a company called EFIRE Capital Holdings Ltd, where Serba Dinamik group CEO and largest shareholder Datuk Dr Mohd Abdul Karim Abdullah also serves as a vice chairman.

“It is not regarded as RPT because it is SDIL, as an entity that comes in and takes up the shares that was offered by the initial originator of the particular project,” said Mohd Karim at a press conference today.

“So it is not regarded as RPT, unless I myself come in and take up the shares. It is the company (Serba Dinamik) who took up the shares,” Mohd Karim said.

“This is a genuine sizeable project which we have won based on the proposal we have put in against a lot of competitors, and all legal documents are available to support my statement,” he added.

SDIL had secured the RM7.7 billion contract for the engineering, procurement and construction (EPC) of an innovation hub, academic campus, related facilities and IT infrastructure in Abu Dhabi.

Block 7 was then owned by UAE-based LIWA Investment Holding, Serba Dinamik said in a reply to The Edge.

In March, LIWA transferred its stake in Block 7 to EFIRE Capital, which is owned by SDIL and LIWA on a 51:49 basis, Serba Dinamik said.

According to Serba Dinamik, it was roped in as a partner in EFIRE by LIWA — but did not elaborate on what is the consideration from Serba Dinamik to take up the partnership.

The latest structure means that Serba Dinamik has effective control of 48.51% in Block 7 through EFIRE.

“As minority shareholder of Block 7 through EFIRE Capital, the project is partly owned by SDIL. This has always been Serba Dinamik Group’s strategy to grow its asset ownership programme,” the company said.

When asked why Block 7’s share transfer was not announced on Bursa Malaysia, Mohd Karim said: “It is not the right statement to say we have not announced this project to Bursa Malaysia.

“It has been announced on the basis that SDIL has been awarded as the EPCC contractor for this project,” he said.

LIWA, said Serba Dinamik, is 100%-owned by UAE national Salah Salem Omair Alshamsi.

“LIWA has been in the industry since 1998 and has established a very strong portfolio of companies ranging from oil & gas, petrochemicals and manufacturing. LIWA has a diverse property portfolio which includes major developments and re-developments within Abu Dhabi and owns sizeable land bank in strategic locations throughout the Emirate,” said Serba Dinamik.

Serba Dinamik is currently in the midst of a legal tussle with its external auditor KPMG, which the company claimed was negligent and has breached contractual and statutory duties.

This was after KPMG raised audit red flags on Serba Dinamik’s bills and transactions worth over RM4 billion for the 12-month period ended Dec 31, 2020.

Read also:
Serba Dinamik to take legal action against external auditor KPMG for alleged negligence
Amid suit against KPMG, Serba Dinamik yet to appoint EY for independent review 
What Serba Dinamik says on its audit issues today 

S Kanagaraju