Serba Dinamik insiders become net buyers as KWAP, EPF sell shares


SERBA Dinamik Holdings Bhd directors have become net buyers of the company shares over the past two weeks, while institutional investors were net sellers amid the financial concerns raised by its external auditor.

Since May 28, when the company announced a proposed special notice to remove its external auditors KPMG PLT, Serba Dinamik group MD Datuk Mohd Abdul Karim Abdullah, also the largest shareholder, had bought five million shares from the open market, bringing his shareholding to 27%.

Serba Dinamik’s second-largest shareholder, the non-independent non-ED Datuk Abdul Kadier Sahib, also purchased another 11 million new securities, increasing his stake in the company to 16%.

Abdul Kadier had wanted to remove KPMG but has since withdrawn the special notice.

In contrast, Serba Dinamik co-founder Datuk Awang Daud Awang Putera disposed of some 8.5 million shares, diluting his direct interest in the company to 1.8%.

The non-independent non-ED clarified the disposal was due to margin calls, dismissing speculations that he was exiting the company amid the audit matters.

He said the rumours of him splitting ways with Serba Dinamik were merely groundless denunciations.

“The sale of the shares is largely due to the technicalities of the stock market margin call and was not an off-loading of shares exercise”, Awang Daud said in a statement last Friday.

Overall, Serba Dinamik directors emerged to be the net buyers of shares with additional 7.5 million units.

From a price action point, the buying failed to push up the share price of Serba Dinamik as the selling by institutional soured investor sentiment.

The Retirement Fund Inc (KWAP) and the Employees Provident Fund (EPF) have become net sellers in the last two weeks, disposing of 1.8 million and 26.1 million shares, respectively.

In the process, KWAP has ceased to be a substantial shareholder and EPF has cut its stake to 9.9%. Serba Dinamik shares closed at a historic low of 60.5 sen last Friday.

Awang Daud stated he remains confident of the prospects of the global integrated engineering services provider despite disposing of a small percentage of the group’s shares recently.

He also expressed confidence in Abdul Karim to navigate the company in the challenging period brought on by the audit issues.

Awang Daud, who is connected to the group in various and diverse capacities since its inception, said he is confident that the board and senior management will carry out all the necessary steps to clarify any queries about the audit issues highlighted by its external auditors to safeguard the interests of its stakeholders.

The Malaysian Reserve reported that Serba Dinamik was looking at forming an independent firm or committee, likely composed of four members, to review the issues flagged by KPMG 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.

The persons include an academician who also holds directorship positions on various government-related agencies and private corporation boards.

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

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

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

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.