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Wednesday, June 23, 2021

Bursa queries Serba Dinamik on update on independent reviewer


Serba Dinamik is taking legal action against KPMG, saying the auditor negligently red-flagged some issues. (File pic)

KUALA LUMPUR: Bursa Malaysia has issued a query to Serba Dinamik Holdings Bhd requesting a status update and timeframe in relation to the appointment of an independent reviewer.

In May this year, Serba Dinamik said auditor KPMG PLT had not been able to verify contracts and transactions worth RM3.5 billion with 11 clients.

The oil and gas service provider rejected the concerns and has since announced that it saw no issues with the existence or legitimacy of the contracts.

On June 22, 2021, Serba Dinamik sought legal action against KPMG, saying the auditor negligently red-flagged some issues, hence, the request for an independent review.

In a statement today, the bourse said Serba Dinamik should undertake the necessary steps to appoint the independent reviewer immediately to address the uncertainty surrounding the veracity and accuracy of the matter as highlighted by its external auditors in a timely manner.

Bursa Malaysia also denied that Serba Dinamik’s chairman Mohamed Ilyas Pakeer Mohamed had spoken to the bourse over the matter, as stated by a news report.

“Bursa Malaysia denies that such a conversation took place.

“The exchange is committed to ensuring the proper dissemination of accurate and timely information to the capital market,” it said.

In a separate statement, the Securities Commission Malaysia (SC) also clarified that it has not spoken to the chairman of Serba Dinamik as reported in the article entitled “What Serba Dinamik said on its audit issues”, which appeared in The Edge CEO Morning Brief on Tuesday.

According to the SC, auditors are also required to exercise their professional scepticism during their audit and always apply the International Standards of Auditing as adopted by the Malaysian Institute of Accountants (MIA).

It reiterated that under the Capital Markets and Services Act 2007, auditors have a statutory obligation to immediately report to the SC “if they reasonably believe that there are any matters which may constitute a breach or non-performance of any requirement of securities laws, rules of the stock exchange or any matter which may adversely affect to a material extent the financial position of the listed company”.

The SC’s Audit Oversight Board also stated that external auditors play an important role in promoting confidence in the quality and reliability of audited financial statements in Malaysia.

As such, auditors should be allowed to carry out their responsibilities and render their independent opinion without fear or favour, and discharge their duties free from any retaliation.

In reply to the Bursa Malaysia query, Serba Dinamik said the board of directors had agreed to appoint an independent reviewer to assess the veracity and accuracy of the matters highlighted by KPMG.

“As of June 22, 2021, the company has filed a writ and statement of claim against KPMG on the grounds of professional negligence, breach of contract and breach of statutory duty.

“Accordingly, the board shall be deliberating on June 25 to see whether the scope of the independent reviewer has to be expanded or otherwise.

“Based on legal advice, the company is of the view that KPMG can no longer act independently as external auditors.

“The company will make an immediate announcement to this effect immediately upon the finalisation of the aforesaid scope of work,” Serba Dinamik said in a filing with Bursa Malaysia. - FMT

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