PUTRAJAYA (April 11): Serba Dinamik Holdings Bhd failed to obtain a stay from the Court of Appeal (COA) over a High Court decision in February requiring it to reveal the fact-finding update (FFU) of its special independent review (SIR) done by Ernst & Young Consulting Sdn Bhd (EY Consulting).

A three-member bench led by Justice Datuk Lee Swee Seng on Monday (April 11) dismissed Serba Dinamik's stay application — pending its appeal to the COA over High Court judicial commissioner Wan Muhammad Amin Wan Yahya's decision earlier in allowing Bursa Malaysia Securities Bhd's application to compel the company to reveal the findings.

Justice Lee in the unanimous decision said there is no merit for the appellate court to grant a stay pending Serba Dinamik's appeal, as there are no special circumstances for the court to grant it.

“This court says that shareholders have the right to know as to what has happened.

“Bursa is not asking Serba Dinamik to agree to the contents of the EY Consulting FFU, as they can dispute it. It is the public at large (who are shareholders) to judge,” the judge said.

With this, the bench dismissed the appeal for a stay and ordered Serba Dinamik to pay RM15,000 costs to Bursa.

The other two members of the bench were Justices Datuk Hadhariah Syed Ismail and Datuk M Gunalan. No date had been fixed by the appellate court to hear Serba Dinamik's main appeal against Wan Muhammad Amin's decision compelling it to reveal the FFU.

Serba Dinamik is appealing against Wan Muhammad Amin's Feb 14 decision to not grant a stay, after his court had a week earlier (Feb 7) granted Bursa's orders to make a public announcement of the FFU by EY Consulting, which conducted the SIR of the company's financial accounts for the 12-month period ending Dec 31, 2020, within two market days.

Wan Muhammad Amin also ruled there were no special circumstances for the High Court to grant a stay pending the appeal to its earlier decision at the COA, as the High Court ruled the public interest point raised and the potential harm to the public, including investors and shareholders, to be an overriding factor for refusing the stay under the circumstances.

Earlier, counsel Mak Lin Kum for Serba Dinamik told the COA that his client should not be compelled to reveal the FFU report as the oil and gas (O&G) company argued that the report was not signed and that it could constitute hearsay.

“If this announcement is made, it would be irretrievable. Furthermore, the company cannot allow third party product findings to be in the public domain,” he added.

Mak said it is Bursa which had affirmed an affidavit over the EY Consulting FFU.

“All this, my client considers as hearsay evidence as it is an unsigned report. It is a defamatory statement to require Serba Dinamik to make the announcement,” he added.

This led to Justice Lee replying that there is nothing preventing Serba Dinamik from saying the report is not signed.

“You can say that in your (Serba Dinamik's) announcement,” the appellate court judge said, adding that what is important is that the public must know.

Datuk Loh Siew Cheang, who represents Bursa, in reply said the FFU done by EY Consulting follows the briefing the firm had with the entire board of Serba Dinamik and also Bursa.

He added that EY Consulting may have chosen not to sign the report because Serba Dinamik had filed an action against the firm.

“They (Serba Dinamik) did not dispute that it was their report on the SIR done after its initial first auditor KPMG made the finding,” he said.

Loh added that as with every public-listed company, Serba Dinamik belongs to the public and Bursa is required under Section 11 of the Capital Markets and Services Act 2007 to regulate it.

He added this matter arose due to KPMG having made certain findings which had been substantiated by the SIR.

“What they are doing is trying to keep the findings by KPMG in mystery where up to Sept 30, 2020, Serba Dinamik had an auditing dispute with its former auditor KPMG, after the auditor highlighted discrepancies involving transactions to the tune of RM4.54 billion.

“Bursa wants it announced as per terms of the order obtained. Serba Dinamik should reveal what financial impact it has and they have to do it in the public interests and protection of consumers,” he added.

Besides this action by Bursa against Serba Dinamik, the O&G company had filed an action against the regulator and EY Consulting basically to prevent them from revealing the FFU and other related matters, which was dismissed by another High Court.

The Securities Commission Malaysia, represented by Ng Jack Meng, held a watching brief on Monday's matter.

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