Court allows creditor Orient Arotek to intervene in SERBADK 5279 pn17 SERBA DINAMIK HOLDINGS BERHAD's application for scheme of arrangement and restraining order

Court allows creditor Orient Arotek to intervene in  SERBADK 5279 pn17 SERBA DINAMIK HOLDINGS BERHAD's application for scheme of arrangement and restraining order

KUALA LUMPUR (May 31): Orient Arotek Engineering & Trading Sdn Bhd (OAE) was allowed to intervene in four Serba Dinamik Holdings Bhd-related companies' application for a scheme of arrangement and a restraining order (RO) against its creditors by the High Court on Tuesday.

The four companies linked to engineering services provider Serba Dinamik Holdings are Serba Dinamik Group Bhd (SDGB) and the SDGB's three subsidiaries, namely SD Controls Sdn Bhd (SDCSB), Serba Dinamik Development Sdn Bhd (SDDSB) and Serba Dinamik Sdn Bhd (SDSB).

Justice Atan Mustaffa Yussof allowed OAE — one of the group's creditors — to intervene as Serba Dinamik Holdings' lawyers did not object to the application.

"Permission is granted for the proposed interveners, OAE, to intervene in the proceedings. OAE will be a party in the proceedings as an intervener. OAE are allowed to file affidavits in objection on any interlocutory application," he said.

Previously, on May 19, Justice Atan fixed June 2 to hear the scheme of arrangement of all five cases under Section 366 of the Companies Act. He also fixed June 7 to deliver his decision on the scheme of arrangement and whether to grant the RO or otherwise.

Under Section 366 of the Act, companies could seek leave (permission) from the court for them to convene a meeting with their creditors to resolve their debts.

It was previously reported that Serba Dinamik Holdings, along with SDGB, SDCSB, SDDSB and SDSB, had filed an application for leave (permission) from the court to enter a scheme of arrangement and RO against the creditors.

Six main financial institutions, namely HSBC Amanah Malaysia Bhd, Ambank Islamic Bhd, Bank Islam Malaysia Bhd, MIDF Amanah Investment Bank Bhd, Standard Chartered Saadiq Bhd and United Overseas Bank (Malaysia) Bhd, which are syndicated and bilateral lenders, filed a winding-up petition against the group and its subsidiaries in April.

This followed the company's failure to service its RM1.2 billion syndicated term financing.

Serba Dinamik Holdings said it is seeking creditors' approval for a scheme of arrangement to restructure the group's debt obligations, which proposed "a 100% return to the company's creditors".

The group said it has identified "some assets for immediate sale" to generate the cash flow required to meet the group's liabilities, it added.

Serba Dinamik Holdings along with two executive directors and two senior management members were charged last December with submitting a false statement involving a revenue of RM6.01 billion for the 12-month period ending Dec 31, 2020, which had previously been flagged by the group's external auditor KPMG.

The issue with the financial year 2020 revenue was first raised by KPMG to Serba Dinamik Holdings' board in May 2021, which escalated into legal tussles between Serba Dinamik Holdings and regulators when the company refused to publish its special independent review.

However, in April, the Attorney General's Chambers accepted a representation made by the company and the four were compounded a total of RM16 million and had the charges withdrawn.

The compound was settled on May 9.

http://www.theedgemarkets.com/article/court-allows-creditor-orient-arotek-intervene-serba-dinamiks-application-scheme-arrangement