KUALA LUMPUR, May 13 — Criminal proceedings against troubled oil-and-gas company Serba Dinamik Holdings Berhad (SDHB) ought not to be pursued due to the economic consequences of doing so, the Attorney General’s Chambers (AGC) said today.

This comes after four senior officials from SDHB were today fully acquitted of charges of submitting a false statement to Bursa Malaysia last year after the full settlement of the company’s RM16 million fine imposed by the Securities Commission (SC) were completed.

Explaining the AGC’s decision to compound SDHB and four of its senior executives, Attorney General (AG) Tan Sri Idrus Harun said the impact of the charges was disproportionate with the severity of the alleged offences committed.

Stating that the AGC was mindful of the standard of proof required of the prosecution to prove the charges based on the evidence available, Idrus said the compounding of the offences allegedly committed was the most appropriate action to take under the circumstances.

"As at the date of this press release, SDHB is facing winding up petitions from creditors, which jeopardise the livelihood of SDHB’s employees and the interest of shareholders and other creditors.

"In these circumstances, the AGC finds that compounding the offences is an adequate form of punishment for the alleged offences,” he said in a statement here.

Idrus further wrote that the AGC was of the view that public interest would be better served by compounding the offences allegedly committed by SDHB and its executives, in light of the evidence in support of the charges and to avoid a long and protracted trial.

Furthermore, Idrus said the compounding would allow the company to focus on rectifying errors and effecting immediate compliance with regulators such as Bursa Malaysia and the SC as it had clearly done so in the past without fault.

"By compounding the offences, the need for punitive action against SDHB is immediately achieved without going through a lengthy trial.

"Thereafter, SDHB can redirect resources and time to coordinate with the authorities to comply with the requirements of the law,” he said, adding that SDHB and the said executives were willing to accept the maximum amount of compound imposable by the SC.

Earlier today, the Kuala Lumpur Sessions Court acquitted chief executive Datuk Abdul Karim Abdullah, executive director Datuk Syed Nazim Syed Faisal, group chief financial officer Azhan Azmi and vice-president of accounts and finance Hafiz Othman of their charges following the full compound payment made on May 9.

Detailing the chronology of events, Idrus said the SC had presented its findings in relation to an investigation into the alleged contraventions of the provisions of the Capital Markets and Services Act (Act 671) by SDHB and its four executives to the AGC late last year.

At that time, the SC had recommended that SDHB and the said four executives be prosecuted for the alleged contraventions.

"The AGC noted that the evidence against SDHB and its four executives was circumstantial in nature and required the application of the deeming provisions of section 367(1) of the CMSA which deem these executives to have committed the offences based on their capacity as directors or officers of SDHB.

"Thereafter, the AGC gave its consent to prosecute to the SC and they were consequently charged in court on December 28, 2021,” Idrus said.

Fast-forward to March 21 this year, Idrus said the AGC received a representation letter from SDHB requesting, amongst others, that the AGC reconsider the charges preferred against SDHB and its four executives.

"Thereafter, the AGC discussed the said representation letter with investigating officers from the SC. The matter was also discussed by the Attorney General with the SC’s Chairman.

"After perusing the said investigation paper and considering the said representation letter by SDHB, the AGC agreed with the proposal to compound the offences alleged to have been committed by SDHB and its executives, taking into account, amongst others, the circumstantial nature of available evidence against SDHB and the reliance on section 367(1) of Act 671,” Idrus added.

Serba Dinamik and its four top executives were charged with submitting a false statement to Bursa Malaysia Securities Berhad in relation to the revenue figure of RM6.014 billion contained in the company’s Quarterly Report on Consolidated Results for the Quarter and Year ended December 31, 2020.

The AGC previously withdrew the criminal charges against Serba Dinamik and its four executives, following legal representation made by the company, and subsequently directed the SC to compound the offences.

Serba Dinamik and the four executives had been slapped with a RM3 million compound fine each on April 13.

According to the SC, this is the maximum amount of compound permissible under Section 369(a)(B) of the CMSA for submission of false information in the company’s financial statement.

Hafiz was also given an additional RM1 million compound for falsifying the accounting records of the company’s subsidiary, an offence under section 368(1)(b)(i) of the CMSA.