PETALING JAYA: Serba Dinamik Holdings Bhd today denied that there was any element of related party transaction in the undertaking of Block 7 Investments LLC when it was first announced on April 12, 2020 and has clarified that Block 7 was incorporated in Abu Dhabi, UAE and not in the US.
In response to a media report, Serba Dinamik explained that its wholly owned subsidiary Serba Dinamik International Ltd (SDIL) bagged a contract on April 12, 2020, from Block 7 for the engineering, procurement and construction of an innovation hub, academic campus, related facilities and information technology infrastructure in Abu Dhabi, UAE.
“In order to strengthen Serba Dinamik’s expansion of its business into a strategic asset ownership model, on March 2, 2021 Block 7’s ownership was transferred to EFIRE Capital Holdings Limited. EFIRE is owned by LIWA Investment Holding and SDIL with 51% and 49% ownership respectively. Upon completion of the transfer, EFIRE and LIWA owned Block 7 with 99% and 1% shareholding respectively. Hence, SDIL is an indirect minority shareholder of Block 7 effective from March 2, 2021,“ the group told Bursa Malaysia.
Block 7 has come under the spotlight after Serba Dinamik’s auditor KPMG flagged issues on its sales transactions, receivables and payables to the tune of over RM3 billion.
Serba Dinamik added that Block 7 signed a long-term land lease agreement with ZonesCorp, an Abu Dhabi Ports company on March 31, 2021, as one of the largest operators of purpose-built economic zones in the UAE and owned by the Abu Dhabi government to develop the Innovation Hub Project in the Industrial City of Abu Dhabi. The announcement was made by ZonesCorp on April 24, 2021.
“With the opportunity to participate in the project as an EPC contractor, SDIL was able to expand its EPC business segment. Furthermore, with its participation as an equity shareholder, SDIL is also in a good position to provide facilities management services for the maintenance and upkeep of the project upon its completion and hence, benefit from the long-term stable income,“ it said.
Based on these, Serba Dinamik confirmed that there is no element of related party interest as purported. The structure as described was undertaken in the best interest of Serba Dinamik for long term shareholders’ value creation and earnings stability.
In 2020, Serba Dinamik did not record any revenue for the EPC contract. Currently, the project is at the stages of concept master planning design and securing approval from the relevant Abu Dhabi authorities.
Serba Dinamik today closed 4% lower at 60 sen on 90.09 million shares traded.
