From RM1.60 to 1 sen in 19 months.
This is not a shitcoin.
It's Serba Dinamik Holdings Bhd, a Malaysian oil and gas company that had a peak valuation of RM5.918 billion in 2019.
Have a seat, and let me explain what happened. 🧵
This is not a shitcoin.
It's Serba Dinamik Holdings Bhd, a Malaysian oil and gas company that had a peak valuation of RM5.918 billion in 2019.
Have a seat, and let me explain what happened. 🧵
1. Serba Dinamik (SERBADK) is an energy services group that provides engineering solutions to oil and gas companies.
Founded in 1993, the firm quickly established a global presence and was subsequently listed on the Bursa market in 2017.
Founded in 1993, the firm quickly established a global presence and was subsequently listed on the Bursa market in 2017.
2. SERBADK is special because of its ability to (seemingly) secure multi-billion dollar jobs, particularly from the Middle East.
From 2013 to 2019, its revenue grew at an impressive compounded rate of 37% per year, while net profits soared elevenfold.
From 2013 to 2019, its revenue grew at an impressive compounded rate of 37% per year, while net profits soared elevenfold.
3. From its initial listing price of RM0.750 in 2017, SERBADK surged to an all-time high of RM2.50 in 2020, boasting an annual return of 49%.
It became the "darling" stock of many investors and even attracted institutions like the Employees Provident Fund (EPF).
It became the "darling" stock of many investors and even attracted institutions like the Employees Provident Fund (EPF).
4. But everything came crashing down soon after.
Suspicions emerged when the company failed to submit its annual report on time and subsequently changed its financial year ending Dec 2020 to Jun 2021.
Suspicions emerged when the company failed to submit its annual report on time and subsequently changed its financial year ending Dec 2020 to Jun 2021.
5. In May 2021, KPMG, the accounting firm responsible for auditing SERBADK, was unable to verify transactions worth RM3.54 billion from 11 of the company’s clients.
This was the first deathblow.
The result was an immediate 60% plunge in SERBADK's share price.
This was the first deathblow.
The result was an immediate 60% plunge in SERBADK's share price.
6. SERBADK sued KPMG a month later, citing "professional negligence, breach of contract and breach of statutory duty."
KPMG resigned in response.
An independent reviewer, EY Consulting (EY), was subsequently appointed to analyze the validity of the audit issues raised by KPMG.
KPMG resigned in response.
An independent reviewer, EY Consulting (EY), was subsequently appointed to analyze the validity of the audit issues raised by KPMG.
7. But EY was also sued shortly after.
SERBADK wanted to restrain EY from releasing any information found in the independent review to "anyone, in any format, whether in print, electronically, or via any media or forum."
Clearly, the executives of SERBADK were hiding something.
SERBADK wanted to restrain EY from releasing any information found in the independent review to "anyone, in any format, whether in print, electronically, or via any media or forum."
Clearly, the executives of SERBADK were hiding something.
8. At this point, SERBADK still required an external auditor to submit its extended, overdue annual report.
NEXIA SSY PLTS was appointed in July 2021.
Despite this, SERBADK was unable to finish the annual report on time, which led to the suspension of trading in its shares.
NEXIA SSY PLTS was appointed in July 2021.
Despite this, SERBADK was unable to finish the annual report on time, which led to the suspension of trading in its shares.
9. When the annual report was finally released on Jan 6, 2022, Nexia expressed a disclaimer.
The auditing firm stated that it was unable to obtain sufficient information due to several factors, including the non-availability of the independent review conducted by EY consulting.
The auditing firm stated that it was unable to obtain sufficient information due to several factors, including the non-availability of the independent review conducted by EY consulting.
10. Meanwhile, the Securities Commission Malaysia finally caught wind of the scandal and proceeded to charge SERBADK.
Executives will face an imprisonment term of up to 10 years and/or a fine of not less than RM3 million if convicted.
Executives will face an imprisonment term of up to 10 years and/or a fine of not less than RM3 million if convicted.
11. With a fraud so huge and the sheer amount of money lost from investors, you would think that these executives deserve the maximum prison sentence and fine.
But no.
The guilty were let off the hook for RM16 million, and SERBADK’s shares resumed trading again.
But no.
The guilty were let off the hook for RM16 million, and SERBADK’s shares resumed trading again.
12. The plunge in the share price afterwards was inevitable.
SERBADK fell another 83%, from 35 cents to 6 cents, before rebounding back to 22 cents in 2 days.
Hold up.
How could a stock rebound so quickly when the company was already doomed, you ask?
SERBADK fell another 83%, from 35 cents to 6 cents, before rebounding back to 22 cents in 2 days.
Hold up.
How could a stock rebound so quickly when the company was already doomed, you ask?
13. Say hello to the speculators and gamblers.
Throughout SERBADK’s rapid downfall, "gurus" emerged everywhere, prompting retail investors to "buy low" and "look for the rebound".
"It’s at 3 cents now, how much lower can it drop to?"
Throughout SERBADK’s rapid downfall, "gurus" emerged everywhere, prompting retail investors to "buy low" and "look for the rebound".
"It’s at 3 cents now, how much lower can it drop to?"
14. But the speculators had no idea.
In December 2022, SERBADK's shares were suspended once again because the firm was unable to submit its 2022 annual report.
Shares were last recorded at 1 cent, and things only got worse afterwards.
In December 2022, SERBADK's shares were suspended once again because the firm was unable to submit its 2022 annual report.
Shares were last recorded at 1 cent, and things only got worse afterwards.
15. On Tuesday, the High Court granted permission for SERBADK to wind up.
The company which had a valuation of RM5.918 billion in 2019 is now worth a mere RM37 million.
RM10,000 invested in SERBADK a year ago would be worth roughly RM300 now, if shares resume trading of course.
The company which had a valuation of RM5.918 billion in 2019 is now worth a mere RM37 million.
RM10,000 invested in SERBADK a year ago would be worth roughly RM300 now, if shares resume trading of course.
Wrapping up:
SERBADK is a classic case of fraud, greed, manipulation, and corruption.
Executives of the company knew they were cooking the books. Yet, when they were caught red-handed, they simply waved...
SERBADK is a classic case of fraud, greed, manipulation, and corruption.
Executives of the company knew they were cooking the books. Yet, when they were caught red-handed, they simply waved...
...their pile of cash (made from offloading shares to innocent investors) and were let off the hook.
Meanwhile, regular investors were left to pick up the scraps, except there’s nothing left.
There are too many lessons to learn from this saga.
But that, is for another day.
Meanwhile, regular investors were left to pick up the scraps, except there’s nothing left.
There are too many lessons to learn from this saga.
But that, is for another day.
Thanks for reading till the end! We hope you learned something.
This was one of the most challenging threads we've written so far, citing from over 40+ different sources and articles.
Some of the information may have been misrepresented, and we apologize for that.
This was one of the most challenging threads we've written so far, citing from over 40+ different sources and articles.
Some of the information may have been misrepresented, and we apologize for that.
Sources (DM us for the complete list):
i) sc.com.my
ii) freemalaysiatoday.com
iii) klse.i3investor.com
iv) klse.i3investor.com
v) theedgemarkets.com.
vi) theedgemarkets.com
vii) thestar.com.my
viii) theedgemarkets.com
i) sc.com.my
ii) freemalaysiatoday.com
iii) klse.i3investor.com
iv) klse.i3investor.com
v) theedgemarkets.com.
vi) theedgemarkets.com
vii) thestar.com.my
viii) theedgemarkets.com
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SC Charges Serba Dinamik, its Director and Officers for False Information in its Financial Statement - Media Releases
The Securities Commission Malaysia (SC) today charged Serba Dinamik Holdings Berhad (Serba Dinamik),...
freemalaysiatoday.com/category/natio…
Serba Dinamik and its top execs settle RM16m compound
Company says it will now focus on managing creditors and restructuring exercise.
thestar.com.my/business/busin…
Serba Dinamik shares to be suspended for failure to submit annual report
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theedgemarkets.com/article/serba-…
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Forum : Stock: [SERBADK]: SERBA DINAMIK HOLDINGS BERHAD
Forum discussion thread listing: Stock: [SERBADK]: SERBA DINAMIK HOLDINGS BERHAD
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This book is the result of the author's many years of experience and observation throughout his 26 y...
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