KUALA LUMPUR (June 28): Ernst & Young Consulting Sdn Bhd (EY) has accepted its appointment as Serba Dinamik Holdings Bhd’s independent reviewer to assess the veracity and accuracy of the matters highlighted by the oil and gas services provider’s former external auditor, KPMG PLT.
Announcing this in a stock exchange filing today, Serba Dinamik said the group has agreed to the requirements sought by EY to ensure that the engagement can be performed in an independent and objective manner for the benefit of all stakeholders.
These include the need for EY to have full and unfettered access to KPMG for information and confirmation for the purpose of analysing the transactions and concerns highlighted, the group said.
EY also wants the engagement to be under the close involvement and supervision of the Securities Commission Malaysia and Bursa Malaysia, and to be reported to independent board members of the group.
Another requirement is that there should be no changes to the scope of the engagement as previously agreed with the independent directors and Bursa Malaysia.
Serba Dinamik said that in light of the recent resignation of KPMG as the external auditor, EY wants assurance that these requirements remain in place prior to executing the engagement letter and commencing the review.
These include a written confirmation from KPMG that cooperation in the form of access and information will be provided to EY for the purpose of understanding the alleged irregularities and anomalies identified, such as the confirmation process of matters sent to identified customers and relevant work papers, including confirmations and correspondences in relation to the findings and concerns raised.
“Accordingly, following the board meeting on June 25, 2021, our solicitors Messrs Shafee & Co have written to Messrs Lee Hishammuddin Allen & Gledhill, the solicitors for KPMG PLT, for confirmation of the above requirement put forward by EY,” said Serba Dinamik.
Meanwhile, in separate filings today, Serba Dinamik notified that its co-founder Datuk Awang Daud Awang Putera and substantial shareholder Employees Provident Fund (EPF) had disposed of more shares of the group in the open market.
Awang Daud, who is also the group’s non-independent and non-executive director, sold eight million shares in the open market on June 25, reducing his stake to 52.39 million shares or 1.41%.
Meanwhile, EPF disposed of 2.04 million shares in Serba Dinamik on June 23. This further trimmed the fund’s stake in the group to 281.08 million shares or 7.58%.
Bloomberg, in a report today, said EPF is “gravely concerned” over the latest developments at Serba Dinamik that have caused a significant loss in shareholder value, including the departure of several directors and the resignation of KPMG as external auditor.
The report quoted EPF as saying that it urged Serba Dinamik to urgently proceed with the conduct of an independent review and take action to resolve all outstanding issues.
Serba Dinamik has been in the news since the end of May, when the group announced that KPMG had informed the firm of some matters pertaining to its statutory audit.
Serba Dinamik’s share price plunged 20.73% or 8.5 sen today to a new all-time low of 32.5 sen, with some 612.71 million shares changing hands. This gives the group a market capitalisation of RM1.21 billion. The counter has dropped 57.33% from 75 sen on June 14.
