Blog: Malaysia SC Charges Serba Dinamik Execs for False Disclosure – Regulation Asia

Four executives of oil and gas engineering company Serba Dinamik have been charged for submitting a false statement to Bursa Malaysia.

Malaysia’s SC (Securities Commission) has charged oil and gas engineering company Serba Dinamik and four of its executives for submitting a false statement to Bursa Malaysia Securities.

The false statement is in relation to the revenue figure in Serba Dinamik’s consolidated results for the quarter and year ended 31 December 2020, according to the charges filed in a Kuala Lumpur court.

Serba Dinamik has been under scrutiny since mid-May 2021 when KPMG highlighted discrepancies involving MYR 4.54 billion worth of transactions to the company’s independent directors. The audit issues were based on the financial accounts for the financial year ended 31 December 2020.

Last May, the SC raided several of Serba Dinamik’s offices to secure documents and relevant evidence after it had received notice from KPMG of possible noncompliance with securities laws by the company.

In June, Serba Dinamik launched legal action against KPMG for alleged negligence and breach of statutory duty, prompting it to resign as auditor. Five independent directors at Serba Dinamik also resigned, in protest against the legal action.

In October, Bursa suspended trading of Serba Dinamik’s shares and warrants after the company declined to make public the findings from a special independent review conducted by EY.

Serba Dinamik launched legal action against Bursa Malaysia in November, accusing it of “acting in excess of power” by requiring EY’s findings to be disclosed.

Bursa Malaysia has since hit back with a civil suit against Serba Dimanik to force it through a court order to disclose the audit findings. The suit alleged that the company is trying to stop the disclosure as it references documents seized by the SC. The suit will be heard on 11 January.

The SC has separately charged Serba Dinamik’s chief executive officer, an executive director, its group chief financial officer, and vice president of accounts and finance for submitting a false statement to Bursa Malaysia. The case will be heard on 27 January.

Serba Dinamik is now under Practice Note 17 (PN17) status after external auditor Nexia SSY PLT expressed a disclaimer of opinion on its audited financial statements for the 18-month period ended 30 June 2021.

Nexia said a number of factors had constrained the completion of its audit, including the non-availability of the report on the independent review conducted by EY. Serba Dinamik has 12 months to regularise its financial condition, failing which it will be delisted.

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