Oil and gas services firm Serba Dinamik said it had filed an originating summons against Bursa Malaysia at the Kuala Lumpur High Court on Nov 3 and is seeking damages from the stock exchange regulator.
Serba Dinamik also wants an interim injunctive relief against Bursa Malaysia to prevent the latter from making any announcement on the “Factual Findings Update” prepared by Ernst & Young (EY).
EY was appointed by Serba Dinamik in July to undertake a “special independent review” on the company’s financial accounts, following directives from Bursa Malaysia on June 28 and July 2,
EY’s appointment was made after Serba Dinamik’s previous auditor, KPMG, highlighted questionable transactions worth some RM4.54bil.
In retaliation, the company sued KPMG for alleged negligence and breach of duties.
Through the originating summons, Serba Dinamik is asking the High Court to declare that Bursa Malaysia’s instruction to appoint EY as a special auditor is “in excess of power, null and void and of no effect”.
Interestingly, this action from Serba Dinamik came roughly two weeks after Bursa Malaysia ordered the oil and gas services firm to reveal the “Factual Findings Update” from EY’s special independent review.
It is also noteworthy that Bursa Malaysia has suspended, until further notice, the trading of Serba Dinamik’s securities, including all warrants.
The suspension was effective from the afternoon of Oct 22.
The originating summons filed by Serba Dinamik seeks to restrain Bursa Malaysia from exercising any power against the company, pending the full disposal of the suit.
It also aims to prevent Bursa Malaysia from issuing any show cause notice to Serba Dinamik and its directors for any “purported breach of the Main Market Listing Requirements (MMLR)”.
In a statement to a local daily, Serba Dinamik chairman Datuk Mohamed Ilyas reportedly said that Bursa Malaysia has no power to “direct or instruct Serba Dinamik and furthermore to continuously suspend the trading of Serba Dinamik securities”.
“The suspension lacked procedural fairness and violated the rules of natural justice.“There was no opinion by Bursa as to breach(es) of any provision of the MMLR by Serba Dinamik.
“We were not notified of any breach and Bursa did not notify us the reason a special independent review was necessary in any event. Therefore, the actions taken against Serba Dinamik were grossly in excess of authority,” stated Mohamed Ilyas.
The application for interim injunctive relief is fixed for hearing on Nov 11 and the case management for the originating summons has been fixed on Nov 17, according to Serba Dinamik in a stock exchange filing yesterday.