High Court blocks sharing of Serba Dinamik special independent review update through court system

High Court blocks sharing of Serba Dinamik special independent review update through court system
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KUALA LUMPUR (Nov 30): The High Court presiding over the legal suit filed by Bursa Malaysia Securities Bhd against Serba Dinamik Holdings Bhd has blocked the sharing of the oil & gas company’s special independent review (SIR) factual findings update through the Court system.

In a filing with the stock exchange, Serba Dinamik said the High Court has directed that affidavits which contain updates on the SIR be “locked out from the court system for view and/or download by all parties except for the Court”.

“In the event that cannot be done, all the cause papers filed herein to be locked out from the Court system for view and/or download by all parties except for Court,” said Serba Dinamik, which initiated legal actions against its former auditor KPMG, the frontline regulator Bursa Malaysia and Ernst & Young Consulting Sdn Bhd (EY Consulting), which conducted the SIR on its accounts.

In a legal suit, documents submitted to the court by the involved parties are typically available for download through the e-Court e-filing system.

The court directive followed an application by Serba Dinamik in court “to redact the Factual Findings Update and the relevant paragraphs in the affidavit in support that made reference to the Factual Findings Update”.

Among others, Bursa’ originating summons against Serba Dinamik sought a court order for the oil and gas services group to make public the factual finding update pursuant to paragraph 2.23(1) of the Main Market Listing Requirements.

The factual findings updates are referring to the SIR conducted by EY Consulting.

The SIR was initiated to verify the validity and veracity of issues raised in Serba Dinamik’s financial statement for the 12-month period ended Dec 31, 2020 by its then-external auditor KPMG PLT back in May.

Last month, the stock exchange had directed Serba to reveal the updates of the findings of the independent review by EY Consulting. It set an Oct 26 deadline for the company to disclose the information.

However, Serba Dinamik responded by saying the information on the findings was immaterial.

It said "there were no documents or copy of any documents that fit the description of 'factual findings update as at Sept 30, 2021' given to the independent non-executive directors as at Oct 22, 2021".

Serba Dinamik then proceeded to sue the stock exchange on Nov 8 to challenge the latter's directives concerning the requirement to conduct the SIR and to disclose the findings of the review, saying the regulator had acted in excess of its powers.

The stock exchange reacted by seeking a court order to compel Serba Dinamik to disclose the findings of the SIR.

The High Court (commercial division) Datuk Ahmad Fairuz Zainol Abidin has fixed Dec 8 to hear Serba Dinamik's injunction application to bar Bursa Malaysia and E&Y from releasing the SIR findings.

Amid the SIR, Serba Dinamik saw further delays of the release of its audited financial statement for the 18-month period ended June 30, 2021.

Last Friday (Nov 24), Datuk Mohamed Ilyas Pakeer Mohamed resigned from the chairman post together with Johan Mohamed Ishak, who was an independent director, after less than six months on the board.

Both cited the same reason for their departure, which is that Bursa Malaysia's stipulations had stopped them from fairly discharging their duties.

The duo joined the board about a month after the audit dispute was made public and the discrepancies were raised by KPMG to the Securities Commission (SC), which prompted the regulator to raid the company’s office and initiate a probe.

The probe is on-going, according to the SC. The regulator assures the investing public that it has made progress on its investigation and additional resources have been added to the team to ensure the investigation is completed in a timely manner.

Kathy Fong