PETALING JAYA: The Securities Commission (SC) has charged Serba Dinamik Holdings Bhd chief executive officer and group managing director Datuk Mohd Abdul Karim Abdullah with furnishing a false statement to Bursa Malaysia.
Abdul Karim, who was initially thought to be at large and even had a warrant of arrest made against him, was present at the Kuala Lumpur Sessions Court yesterday when he was charged under Section 369(a)(B) of the Capital Markets and Services Act 2007 (CMSA).
The charge involved an alleged false statement in relation to the revenue figure of RM6.014bil contained in Serba Dinamik’s quarterly report on consolidated results for the period ended Dec 31, 2020.
Abdul Karim, 56, pleaded not guilty when the charge was read to him yesterday by Sessions Court judge Datin Sabariah Othman.
Sabariah set a RM500,000 bail with two sureties and ordered Abdul Karim to report to an SC investigative officer, pursuant to a schedule that will be determined by the commission at a subsequent date.
If found guilty, Abdul Karim will be liable to a jail term not exceeding 10 years and a fine not exceeding RM3mil.
Abdul Karim was in fact supposed to be charged on Tuesday.
However, as his whereabouts could not be accounted for, a warrant of arrest was issued against him.
The SC, on Tuesday, charged oil and gas services firm Serba Dinamik, as well as its executive director Datuk Syed Nazim Syed Faisal, group chief financial officer Azhan Azmi and accounts and finance vice-president Muhammad Hafiz Othman.
“All three accused claimed trial to the charges filed against them.
“Sessions Court Judge Sabariah Othman fixed bail at RM300,000 with two sureties each and ordered the passports of all accused persons to be surrendered to court.
“Additionally, all three accused are required to report to the SC’s investigating officer on a monthly basis.”
The SC said Muhammad Hafiz was directly involved in instructing the preparation of false documentations, an offence under Section 368(1)(b)(i) of the CMSA.
“Muhammad Hafiz claimed trial to the charge filed against him.
“Shah Alam Sessions Court Judge Rozilah Salleh granted bail of RM200,000 with two sureties.
“If convicted, Muhammad Hafiz could face imprisonment for a term not exceeding 10 years and a fine not exceeding RM1mil.”
The SC’s investigation into Serba Dinamik commenced in May 2021, following a Section 320 CMSA report by KPMG to the SC.
On Dec 13, Fitch Ratings downgraded Serba Dinamik’s long-term issuer default rating to Restricted Default or RD from C.
“The downgrade follows the expiry of the 30-day grace period after the non-payment of the coupon on the group’s US$222mil (RM929mil) senior unsecured sukuk due in 2022.
“Potential cross-acceleration clauses in its other debt may be triggered by the non-payment of the 2022 notes.
“The RD rating indicates an issuer, in Fitch’s opinion, has experienced an uncured payment default, but has not entered into bankruptcy filings and has not ceased operating,” according to the ratings agency.
Currently, Serba Dinamik’s securities, including all warrants, have been suspended by Bursa Malaysia for over two months.
The suspension, which began on Oct 22, was made following the failure by Serba Dinamik to reveal the “factual findings update” from E&Y Consulting Sdn Bhd’s (EY) special independent review.
EY was appointed by Serba Dinamik in July 2021 to undertake a “special independent review” on the company’s financial accounts, following directives from Bursa Malaysia.
The review was ordered after Serba Dinamik’s previous external auditor, KPMG, highlighted several questionable transactions by the group.
Year-to-date, Serba Dinamik’s shares have tanked by almost 80%.
The SC has been swift in reprimanding top company officials for any alleged corporate offenses.
In December last year, former managing director of DIS Technology Holdings Bhd (DIS Tech), Cheah Yew Keat, was convicted and sentenced for insider trading by the Kuala Lumpur Sessions Court.
The SC charged Cheah on Oct 10, 2019, with disposing of 2.9 million units of DIS Tech shares between March 1 and 4, 2010, via accounts belonging to his personal assistant’s husband.
Separately, in September last year, former Megan Media Holdings Bhd executive chairman and director Datuk Mohd Adam Che Harun was jailed 18 months and fined RM300,000 for providing false information to Bursa Malaysia.
Mohd Adam, 76, was charged on Dec 10, 2007 and the false information relates to Megan Media’s revenue of RM306.15mil, of which more than 75% of the said revenue amounting to RM228mil were falsified.