On January 10, 2023 the High Court granted a petition by six financial institutions to wind up Serba Dinamik Holdings Bhd, and its three units – Serba Dinamik International Ltd (SDIL), Serba Dinamik Sdn Bhd and Serba Dinamik Group Bhd – over debts totalling about RM5 billion.
According to a report by The Edge, judicial commissioner Ahmad Murad Abdul Aziz allowed a petition filed by Standard Chartered Saadiq Bhd, HSBC Amanah Malaysia Bhd, AmBank Islamic Bhd, MIDF Amanah Investment Bank Bhd, United Overseas Bank (Malaysia) Bhd, and Bank Islam Malaysia Bhd, and granted an order to wind up the four companies.
Source: https://www.freemalaysiatoday.com
Upon being wound up, the companies will be placed under a liquidator, Victor Saw, from PricewaterhouseCoopers (PwC).
An application by the companies to postpone the hearing was heard after a legal representative of Efire Capital Holdings Ltd, an Abu Dhabi company that is a 50% joint venture between SDIL and another Abu Dhabi firm — argued that Efire Capital should be allowed to sell its assets first to help repay the debt.
Efire Capital wanted one to 1.5 months to dispose of the assets to help pay off some of the debts before the winding-up, as it would be harder to sell the assets at a better price after the winding-up. However, the application to adjourn was objected to by Jeyanthini Kannaperan, who represented the syndicated lenders, Benjamin Dawson, representing the bilateral lenders in HSBC Amanah and HSBC Bank, and Karen Tan, who appeared for Hong Leong Islamic Bank.
Previously, the four companies had offered to pay 15% of their debts to the local lenders by Aug 31 2022, and the remaining amount by end of 2022, but had failed to do so.
This is a case of a group of companies which has the largest debt owing in the insolvency court, and does not have a credible restructuring plan. It owes RM1.7 billion to the syndicated lenders, it owes another US$500 million (RM2.18 billion) to the sukuk lenders, RM250 million to Hong Leong Islamic, and to another RM70 million.
Serba Dinamik’s shares on Bursa Malaysia was suspended recently after it failed to submit its annual report for the financial year ended June 2022. It also fell into the Practice Note 17 (PN17) category, issued by Bursa Malaysia in relation to listed companies that are in financial distress.
Established in 1993, Serba Dinamik is an international energy services group providing integrated engineering solutions to the oil and gas, petrochemical, power generation, water and wastewater, and utilities sectors.
Datuk Abdul Karim is now presumed to be residing in Dubai. The Kuala Lumpur Sessions Court had on May 13 2022 freed Karim and three senior officers on charges of submitting a false statement to Bursa Malaysia in 2021 after having imposed compounds amounting to RM16 mil against them.
Deeming Serba Dinamik as “turkey of the year”, theedgemarkets.com has summed up Serba Dinamik’s fall from grace where its market capitalisation today is only worth RM37 mil in stark contrast to a valuation of RM6 billion before accounting issues cropped up in May 2021.
With Serba Dinamik’s stock now suspended and trading at one sen, it is likely that the company will soon be off the radar and forgotten, but it leaves behind a dangerous precedent. The key point how did the lenders fork-out a total of RM5 bil when they have Risk Departments and Market Intelligence or Client Coverage Units. The cycle repeats because of greed by the owners/management, bankers and greed by other vendors/professionals. I know that it is not that simple but the essence of it all is GREED!
References:
Court winds up Serba Dinamik, 3 subsidiaries over RM5bil debt, FMT Business, 10 Jan 2023
Is karim in Dubai as his once high flying Serba Dinamik becomes a worthless stock? Focus Malaysia, 11 Jan 2023
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