The decision not to prosecute sparked widespread concern in corporate circles, where Serba Dinamik is largely seen as having close links to politicians in Prime Minister Ismail Sabri Yaakob’s government
Resignation of Securities Commission Executive Chairman Syed Zaid Syed Jaffar Albar and his immediate replacement by UMNO politician Awang Adek Hussin
Securities Commission (SC) chief Syed Zaid Albar resigned on Thursday (April 28) from Malaysia’s financial markets regulator amid controversy over the decision to drop criminal charges against senior executives of a politically linked oil and gas firm.
Both the SC and the Finance Ministry confirmed Datuk Syed Zaid’s exit just six months into a three-year renewal of the corporate lawyer’s tenure.
The Attorney-General’s Chambers (AGC) had initially agreed to charge Serba Dinamik’s chief executive Mohd Abdul Karim Abdullah, executive director Syed Nazim Faisal, chief financial officer Azhan Azmi and vice-president of accounts and finance Hafiz Othman on the SC’s recommendation last December.
All were charged with submitting false information on the company’s financial data
But, in a turnaround a fortnight ago, the AGC decided to accept representations made by the firm, Serba Dinamik, and its officials.
The SC then fined Serba Dinamik and the four officials the maximum amount of RM3 million (S$954,000) each for allegedly misrepresenting RM6 billion in revenue.
The amount represented the biggest corporate fraud case involving a firm listed on Malaysia’s stock exchange.
The decision not to prosecute sparked widespread concern in corporate circles, where Serba Dinamik is largely seen as having close links to politicians in Prime Minister Ismail Sabri Yaakob’s government.
“It gives rise to the perception of double-standard practices being accorded to certain individuals,” Institutional Investors Council of Malaysia’s adviser Lya Rahman was quoted as saying by The Edge.
Mr Syed Zaid said the regulator’s “integrity, professionalism and dedication were tested and proven many times” since he was appointed in 2018.
The outgoing executive chairman welcomed his successor and former deputy finance minister Awang Adek Hussin in leading “an institution that stands resolutely strong”.
Official sources told The Straits Times that Mr Syed Zaid is not the only senior official “wanting to leave SC after this debacle”.
In an immediate reaction, former finance minister Lim Guan Eng “expressed shock at both the sudden resignation” of Mr Syed Zaid and “his immediate replacement with Umno politician Awang Adek Hussin” who was once also an MP.
The chairman of the largest opposition outfit Democratic Action Party demanded “both the Prime Minister and the Attorney-General… give full explanations on Syed Zaid’s shock resignation”.
“The government must act swiftly to reassure investor confidence that Malaysia’s capital market is run not for the benefit of vested interests… but professionally, independently, competently with full adherence to transparency and respect for rule of law free from any political interference,” he added.
The concern over Serba Dinamik’s financials were first raised by its external auditor KPMG in May 2021, in relation to over RM4 billion in transactions involving phantom companies.
However, the firm ignored a court order to reveal a subsequent factual finding update (FFU), leading Bursa Malaysia to sue it for contempt of court on April 14.
Trading in Serba Dinamik has been suspended since October last year due to its refusal to hand over the FFU.
Source : Straits Times
Three more top officials leave SC
The Securities Commission Malaysia’s (SC) managing director Foo Lee Mei, general counsel Chee Fei Meng plus executive director of digital strategy and innovation Chin Wei Min are understood to have quit.
However, it is not known what prompted each of them to leave the commission.
On Thursday (April 28), the SC announced the resignation of Datuk Syed Zaid Albar whose term was extended for a three-year period in October last year. He will be replaced by former deputy finance minister Datuk Dr Awang Adek Hussin, who will assume the post on June 1.
Foo, according to sources familiar with the commission, has tendered her resignation recently. Meanwhile, Chee, who is also an executive director, has opted not to renew her contract.
Chee joined the SC in April 2019. She was the CIMB group legal head prior to joining the regulator. Chin, on the other hand, joined the commission as an executive director in April 2016.
Foo served as a deputy public prosecutor (DPP) with the Attorney-General’s Chambers (AGC) for six years before joining the regulator in 1994. In 2004, she was re-gazetted as a DPP by the Attorney General and continued to lead SC appeals in the High Court, Court of Appeal and Federal Court.
Foo’s role was instrumental in air cargo service provider Transmile Group Bhd’s accounting fraud involving inflating revenue with fake invoices. The extensive accounting scandal was red-flagged by the company’s then external auditor in 2007, and the board then conducted a forensic audit of Transmile’s accounts to reveal the truth.
Transmile’s former chief executive officer and founder Gan Boon Aun was found guilty of furnishing misleading statements, with the intent to deceive, relating to the company’s revenue for the financial years ended Dec 31, 2005 and 2006.
After 15 years, the Sessions Court found Gan guilty of furnishing misleading financial statements to Bursa Malaysia. He was fined RM2.5 million (in default 18 months’ imprisonment) and sentenced to a day in jail last year.
The SC later appealed to increase the jail sentence from one day to 24 months. However, the hearing did not take place in the count as Gan was on the run.
Back to the present, Foo has encountered a similar case in external red-flagged audit issues of Serba Dinamik Holdings Bhd over the past one year.
Following investigations by the SC and with the initial consent of the AGC, Serba Dinamik and four of its senior executives were charged on Dec 28, 2021, accused of submitting a false statement in relation to the company’s record high revenue of RM6.01 billion for the 12-month period ended Dec 31, 2020.
But about two weeks ago, the AGC decided to withdraw the charges following a letter of representation by the accused. The AGC has not publicly explained its decision.
This left the SC with only the option to issue compound fines and it did so on April 12, imposing the maximum fine allowed of RM3 million each against the company and the four individuals, with an additional RM1 million against vice-president of accounts and finance Muhammad Hafiz Othman.
Syed Zaid: SC’s integrity was tested
The Securities Commission Malaysia’s (SC) outgoing executive chairman Datuk Syed Zaid Albar said the regulator’s integrity and professionalism were put to test during his tenure.
“I would like to thank the SC’s board, leadership team and the officers and staff of the SC.
“Their integrity, professionalism, and dedication were tested and proven many times as they ceaselessly worked to ensure the stability and continuity of the capital market,” said Syed Zaid in a statement.
In the statement, the capital market regulator said Syed Zaid will be succeeded by Datuk Dr Awang Adek Hussin, who will assume the position on June 1, 2022.
The regulator did not reveal the reason for the early exit of Syed Zaid, who helmed the SC for nearly four years. His term was extended for a three-year period in October last year.
Nonetheless, Syed Zaid’s resignation coincided with a controversial decision by the Attorney-General’s Chambers (AGC) to withdraw criminal charges against troubled oil and gas services company Serba Dinamik Holdings Bhd and four senior executives who were alleged to have filed false financial statements with the stock exchange.
In the statement, Syed Zaid, a corporate lawyer, said the SC’s integrity, professionalism, and dedication were tested during his tenure.
“Their (SC’s officers) integrity, professionalism, and dedication were tested and proven many times as they ceaselessly worked to ensure the stability and continuity of the capital market,” he said.
Following investigations by the SC and with the initial consent of the AGC, Serba Dinamik’s senior executives were charged on Dec 28, 2021, accused of submitting a false statement in relation to Serba Dinamik’s record high revenue of RM6.01 billion for the 12-month period ended Dec 31, 2020.
The senior executives who were charged are chief executive officer and group managing director Datuk Mohd Abdul Karim Abdullah, who is also the company’s controlling shareholder; executive director Datuk Syed Nazim Syed Faisal; group chief financial officer Azhan Azmi; and vice president of accounts and finance Muhammad Hafiz Othman.
Syed Zaid was instrumental in leading the institution and the capital market through a challenging period dominated by the effects of the Covid-19 pandemic on businesses and investors, said the regulator in the statement.
“During his leadership, the SC recalibrated its priorities to enable the regulator and capital market participants to address and respond to the impact of the pandemic while ensuring market stability and continuity.
“Syed Zaid also focused on advancing the SC’s development initiatives, particularly in promoting the sustainability agenda, growing the Islamic capital market and harnessing innovation.
“Key to this is the release in September last year of the Capital Market Masterplan 3 (CMP3), which will set the tone and direction for the SC’s development and regulatory initiatives for the next five years,” the SC said.
Meanwhile, Syed Zaid said he welcomes the appointment of Datuk Dr Awang Adek and expressed his gratitude to lead “an institution that stands resolutely strong like the SC”.
MoF must explain resignation of SC officials, says Muda veep
Muda vice-president Lim Weit Jiet today said the government must explain why a string of top officials from the Securities Commission (SC) have resigned, and whether it has anything to do with the withdrawal of charges against energy services firm Serba Dinamik Holdings Bhd.
Lim said the responsibility falls on Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz to answer for the situation, especially due to the vital role the SC plays in ensuring confidence in Malaysia’s capital markets.
“Did these officials resign because they were dissatisfied with how authorities have dealt with the Serba Dinamik executives?” he said in a statement.
Earlier today, The Edge reported that SC managing director Foo Lee Mei, general counsel Chee Fei Meng as well as executive director of digital strategy and innovation Chin Wei Min have left the regulator.
This follows SC chairman Datuk Syed Zaid Albar tendering his resignation yesterday, with the Finance Ministry announcing that it had appointed former deputy finance minister and Umno man Datuk Awang Adek Hussin to take his place effective June 1.
Serba Dinamik and four of its senior executives were charged in December last year for submitting a false statement to Bursa Malaysia Sdn Bhd relating to the company’s record high revenue of RM6.01 billion for a 12-month period.
The SC said the individuals involved were Serba Dinamik CEO and group managing director Datuk Mohd Abdul Karim Abdullah, executive director Datuk Syed Nazim Syed Faisal, group chief financial officer Azhan Azmi, and accounts and finance vice-president Muhammad Hafiz Othman.
About two weeks ago, however, the Attorney-General’s Chambers decided to withdraw the charges after a letter of representation by the accused.
Subsequently, the SC had imposed a maximum compound of RM3 million each against the oil and gas company and the senior executives involved, noting that the public prosecutor had provided written consent to the compound.
On Sunday, it was reported that the SC had lodged a police report against Serba Dinamik over allegations accusing it of acting in bad faith and not complying with procedures when carrying out its duties.
The SC confirmed in a statement that it had lodged a report against an announcement issued by Serba Dinamik on April 21, which it claimed contained statements that were “baseless and malicious.”