Serba Dinamik’s special audit review facing ‘operational matters’

by NUR HANANI AZMAN / pic by TMR FILE

SERBA Dinamik Holdings Bhd is unable to meet Bursa Malaysia’s deadline yesterday to announce the findings of the special independent review (SIR) as the audit process remains in progress. 

Group MD and CEO Datuk Dr Mohd Karim Abdullah said the SIR auditor, Ernst & Young Consulting Sdn Bhd (EY), needs the company to clarify a few things before proceeding to release its audit findings. 

He added that the questions raised by EY were related to operational matters as business conduct differs across countries Serba Dinamik has operations in. 

“Hopefully the easing of standard operating procedures on Covid-19 restrictions in different countries can help to expedite the verification process. It depends on agreement or cooperation of all parties involved,” he told The Malaysian Reserve when asked about the date the group will be able to announce the findings. 

Bursa Malaysia Securities Bhd had suspended the trading of Serba Dinamik shares and issued a directive to the company regarding the status of the company’s SIR report last Friday. 

The market regulator, in a statement last week, directed Serba Dinamik to make an announcement on the findings from the Factual Findings update (FFU) by Oct 26, 2021. 

Bursa Securities notes that the findings from the FFU as at Sept 30, 2021, on the SIR have been communicated to three out of four independent non-EDs on Oct 21, 2021. 

“In this regard, Bursa Securities notes that to date, Serba Dinamik has not announced the findings from the FFU in accordance with Paragraph 9.03 of the Main Market Listing Requirements,” it noted. 

In an exchange filing on Monday, Serba Dinamik replied that the company does not have anything on paper from EY that could be regarded as the FFU to present to the exchange. 

Serba Dinamik’s former external auditor KPMG Ltd had flagged some accounting issues relating to transactions involving more than RM3.5 billion. 

The audit dispute between Serba Dinamik and KPMG was made known to the investing public in May when the company announced it wanted to commence an independent review on the audit issues pertaining to the issues flagged by the then external auditor. 

The issue saw investors selling dozen of Serba Dinamik shares with the stock falling from about RM1.60 a share to 35 sen at last trade last week. 

KPMG resigned as the external auditor on June 24, following a suit by Serba Dinamik. 

The integrated oil and gas service provider appointed EY in July as its independent reviewer to assess the veracity of the audit issues raised by KPMG. 

The scope of works calls for EY to assess the validity and veracity of the transactions and balances on sales, trade receivables and materials on sites with respect to 11 identified customers, and to quantify any possible financial impact. 

It is also looking into purchases from six local suppliers; IT contracts and transactions involving six customers and two suppliers, as well as the revenues and costs involved; and the transactions and balances involving one customer and one supplier in Bahrain. 

On Aug 4, Serba Dinamik announced the appointment of Nexia SSY PLT as its new external auditor. 

Serba Dinamik shares remain suspended pending a directive from the regulator. 

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