KUALA LUMPUR (Sept 15): The High Court (commercial division) had on Thursday (Sept 15) struck out a stay application by Serba Dinamik Holdings Bhd (SDHB) and three of its subsidiaries to temporarily stop the appointment of Victor Saw of PwC Malaysia as an interim liquidator.
This comes after SDHB, Serba Dinamik Sdn Bhd (SDSB), Serba Dinamik Group Bhd (SDGB) and Serba Dinamik International Ltd (SDIL), which were represented by Mak Lin Kum, withdrew the stay application filed on Aug 25.
The application was filed just two days after the court ordered the appointment of the liquidator.
The companies withdrew their bid to stay the appointment after strong opposition from their creditors, namely the syndicated lenders, bilateral lenders and Hong Leong Islamic Bank Bhd.
Initially, Mak informed the court that he was seeking an adjournment to the stay hearing until early October, but this was also opposed by the lawyers representing the creditors.
Financial institutions did not receive any payment
The creditors mainly objected to the stay because the troubled oil and gas group had breached a consent order dated June 8, which requires repayments to begin by Aug 12.
They complained that until Thursday (Sept 15), they had not received any such payment from these companies and said the stay application was aimed at derailing the work done by the interim liquidator.
The syndicated lenders who were represented by Datin Jeyanthini Kannaperan, the bilateral lenders represented by Benjamin Dawson, and Hong Leong Islamic who was represented by Claudia Cheah, had strongly opposed the stay application.
Jeyanthini said the scheme that was initially agreed to on June 8 did not work, as they had yet to receive any payment to date.
“Granting an adjournment and a stay would further perpetuate the situation further,” Jeyanthini said.
The syndicated lenders are six financial institutions, namely 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, who are owed RM1.7 billion by the Serba Dinamik companies.
Dawson questioned the purpose of the stay and expressed concern that a stay would further delay repayments.
He added that his clients had obtained a mandatory order against SDSB on May 30 for the return of the money owed to them, but they have not been repaid yet.
Dawson also showed the court the initial report produced by the interim liquidator.
He said SDSB has the most assets among all companies in the group, with slightly over RM6 million in cash.
However, the report shows that the cash balance of the entire group was only RM8 million to RM9 million, in comparison with its debts of RM5 billion, he added.
“How are these companies going to be able to turn around, as they need an insolvency specialist to deal with the colossal debt that it has domestically and internationally?” he asked?
Cheah, whose client Hong Leong Islamic is an intervener in the suit against SDHB and SDGB, said there is no evidence that funds to repay the debts are being sent to these companies.
Ng Sai Yeong, representing the sukuk holders, said they had not come to a decision on whether to oppose the stay or scheme, as the companies had already defaulted in their payment.
Meanwhile, Mohd Aiman Syafiq Mohd Nasir, who appeared for the group's secured creditors MBSB Bank Bhd & Bank Kerjasama Rakyat, said he was present as an observer to the proceedings.
Following strong opposition to the adjournment and stay, Mak said he has decided to withdraw the stay application.
Costs of more than RM500,000
This resulted in the syndicated lenders, bilateral lenders, and Hong Leong Islamic seeking costs from the non-independent directors.
Judge Nadzarin Wok Nordin agreed to strike out the stay application and ordered SDHB, SDGB, SDSB and SDIL non-independent directors to pay total costs of RM200,000 to the syndicated lenders, and another RM200,000 to the bilateral lenders.
In addition, Nadzarin also ordered SDHB and SDGB to pay RM100,000 costs to Hong Leong Islamic, while the sukuk lenders get RM5,000 costs.
The court ordered that the costs be paid within 14 days from Wednesday.
Lee Shih from Lim Chee Wee Partnership appeared for the interim liquidator.
On Aug 23, Nadzarin had agreed to the appointment of the interim liquidator, after SDHB and its subsidiaries failed to make the scheduled payment by Aug 12.
Besides the RM1.7 billion owed to the syndicated lenders, the four companies owed another RM68 million to the bilateral lenders, and RM240 million to Hong Leong Islamic.