SERBA Dinamik Holdings Bhd’s founder and CEO Mohd Abdul Karim Abdullah has a message for the company’s shareholders, staff and members of the public: trust us and have confidence in us.

“We are here to stay as a major player in the market. The recent events are only a minor setback and will not deter us from surging forward with the many projects we have planned and are in the pipeline.

“We will work hard to earn your trust and take this company to greater heights,” he told The Malaysian Insight in an interview.

He said that legal troubles over its audit issue with the Securities Commission had derailed the company in recent months, but that matter is now resolved following the settlement of a RM16 million compound and withdrawal of criminal charges.

“The legal troubles have certainly damaged our performance and our reputation. 

“This has resulted in contracts being terminated, matured contracts not extended, new bids withheld from us to prevent our participation and financial institutions freezing our assets. 

“We lost approximately 2,000 employees in total as a result,” he said.

On Friday, Karim, the company and three other top executives were given a discharge and acquittal by the Sessions Court.

They were charged last December with submitting a false statement to Bursa Malaysia Securities Bhd over RM6 billion in the company’s consolidated results for the quarter and year ending December 31, 2020.

Last month, the Attorney-General’s Chambers (AGC) accepted letters of representation from Serba Dinamik and the directors, following which the Securities Commission on April 13 issued them RM16 million in fines, which were later paid on May 9.

However, Attorney-General Idrus Harun’s explanation on May 13 for the deal has drawn criticism.

Serba Dinamik’s legal troubles started in 2021 when then auditor KPMG red-flagged company accounts, prompting the SC to initiate charges under Capital Markets and Services Act 2007 for submission of false information.

Serba Dinamik is currently in PN17 status as its newly appointed external auditor Nexia SSY PLT expressed a disclaimer of opinion on its audited financial statements for the 18-month financial period ended June 30, 2021.

The troubled oil company said it was formulating a plan to regularise its financial position, which would be submitted to Bursa Securities for approval in the next eight months.

Why accept the compound?

Karim said that with this case now over, his aim was now to get Serba Dinamik back on track again.

He also dismissed a suggestion that agreeing and accepting the compound meant admission to some level of guilt.

“Accepting the compound doesn’t mean we are admitting to being guilty.

“We believe our in-house capabilities will position Serba Dinamik back into a strong market position.

“We also realised that continuing the legal route would take years and the adverse news would prevent the company from obtaining financial support or bidding for contracts.

He said Serba Dinamik’s market position was global, with massive prospects in Africa and in Central Asia.

“Here we can compete successfully and this will bring value to shareholders.”

He added that ongoing legal battles would also mean key staff would be restricted in their duties, not least having to give evidence in court.

“Paying the compound allows us to continue with business as usual, and quickly earn the revenue to repay our creditors and generate profitability to pay dividends to our shareholders,” he said.

Reorganisation and rebranding

Karim said that progressive changes have been made internally, arising from the scandal.

“While no organisation is perfect, we believe in continuous improvement, and fully intend to address any residual concerns from this matter. 

“That gives us a huge opportunity to improve many internal and external processes. We will set up a credible C-suite transformation team to rebrand and reposition ourselves.

“We believe in our company’s fundamentals and are very confident that we can become a preferred multinational company of choice,” he said.

He said Serba Dinamik was now focusing on fast income generating products and services with less competition scope, with plans to widen its customer base as part of its regularisation plan.

“Action plans have been finalised and will be rolled out in stages. This forms a crucial part of the group’s regularisation plan.

“We have this plan to be effective over the next eight months and are confident to overcome all the ongoing concerns surrounding the group.

“We are on the offensive to regain the confidence of our shareholders, banks, staff and people,” he said.

When the SC charged Serba Dinamik and the company’s officials last December, Karim could not be brought to court because he could not be located.

The SC had to secure a warrant of arrest for him, and he was only charged the next day.

However, Karim denied that he was hiding from the SC.

“I was at my weekend house on that day. I consulted my lawyer and he told me that he would deal with and make necessary arrangements with the SC.

“I stand guided by my lawyer’s advice. I turned up in court the next day as arranged,” he said.

Karim also defended his decision not to step down, saying he was the best man to get the company on its feet again.

“Serba Dinamik has grown to what it is today through ‘walk the talk’ concept, ie the owner-operator concept.

“We know best how the foundations are set. It was built through tears and sweat. The root of its core capabilities is so close to our heart and passion,” he said.

A new appointment, he added, would need to learn the company and the position, which would further penalise Serba Dinamik as it comes out of this situation. – May 16, 2022.