Serba Dinamik mulls 4 members for independent ‘audit forensics’

by RAHIMI YUNUS / pic by TMR FILE

SERBA Dinamik Holdings Bhd is looking at forming an independent firm or committee, likely composed of four members, to review the issues flagged by its external auditors in its statutory audit, according to sources.

A source said the oil and gas services company aims to finalise the candidates very soon, comprising “totally outsiders” to the company to ensure the independence and authority of the committee’s findings.

One of the names, the source said, is an academician who also holds directorship positions on various government-related agencies and private corporation boards.

The other prospective member of the independent firm is a former top government official who also helped establish the Securities Commission Malaysia.

“The independent committee would consist of members with vast experience in auditing as well as entrepreneurship. They will look at the matters raised by the external auditors from A to Z.

“The committee, of course, would have no representation from the management,” the source, who is close to the discussion, told The Malaysian Reserve (TMR).

Serba Dinamik group MD Datuk Mohd Abdul Karim Abdullah did not immediately reply to a request for comment by TMR.

The source added that the setting up of the “independent firm” is at its final stage and could be announced this week.

“Some of the candidates are concerned to commit within the timeline, while others are still contemplating to join,” the source added.

For now, the source said it is “business as usual” for Serba Dinamik, while its management is actively addressing the irregularities found in the statutory audit.

In its recent filing, Serba Dinamik stated that it will appoint an independent firm to commence a special independent review to assess the veracity and accuracy of the matters raised in the statutory audit by KPMG PLT.

KPMG raised concerns about billions of ringgits of sales transactions (RM2.3 billion), resultant trade receivables balances (RM652 million) and materials on-site balances (RM569 million) involving 11 customers’ confirmations for the group’s financial statements ended Dec 31, 2020.

KPMG also raised issues on 10 local suppliers with a total purchase transaction of RM798 million.

There were also issues with Serba Dinamik’s customers and suppliers in Bahrain and local information and technology contracts.

Another source said the Serba Dinamik board is in the middle of forming the independent committee to look after the “audit forensics”.

He said no board member from the company would be involved in the independent group.

“The exclusion of board members aims to provide public assurance that the audit forensics would be independently monitored. A few names are on the cards, but they are yet to be firmed up,” the source told TMR.

Serba Dinamik has changed its financial year end from Dec 31, 2020, to June 30, 2021, due to extension of the Movement Control Order in Malaysia and lockdowns in other countries that hampered the group’s ability to finalise its financial statements, it said in an earlier filing.

Serba Dinamik shares hit a low of 61 sen yesterday before closing 14.5 sen or 19% lower at 62 sen.

Its non-independent non-ED Datuk Abdul Kadier Sahib, also the second-largest shareholder, has withdrawn his motion for an EGM to be convened for the proposed removal of KPMG and to replace them with BDO PLT.

Abdul Kadier and Abdul Karim, the largest shareholders, have each bought 11 million and five million new securities respectively in the open market since June.

Their buying comes as the Retirement Fund Inc cut its stake in Serba Dinamik by disposing of 26 million shares last week.