KUALA LUMPUR (Oct 22): Bursa Malaysia has set Tuesday (Oct 26) as the deadline for Serba Dinamik Holdings Bhd to announce the findings of the special independent review, which addresses the audit issues flagged by its former external auditor, KPMG.
In a statement, the stock exchange noted that the findings from the factual findings update as at Sept 30, 2021 on the special independent review were communicated to three out of four independent non-executive directors on Thursday (Oct 21).
Following the statement, Serba Dinamik made an announcement to the local bourse on the directive issued by Bursa Malaysia.
Bursa suspended the trading of Serba Dinamik shares and warrants on Friday afternoon, and said the trading suspension will remain until Serba Dinamik makes an announcement in compliance with the directive.
Bursa Securities said the directive is given to ensure the audit issues highlighted by KPMG are addressed in a "timely manner and provide clarity to the market".
Serba Dinamik's former auditor KPMG 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 group announced that it wanted to commence an independent review on the audit issues pertaining to its statutory audit flagged by the auditor.
Its group managing director (MD) Datuk Dr Mohd Abdul Karim Abdullah has repeatedly stated that Serba Dinamik's management had done nothing wrong with regard to the audit issues flagged.
KPMG later resigned as the external auditor on June 24, following a suit by Serba Dinamik. The audit firm said that the suit had compromised its ability to independently continue to audit the company and discharge its professional duties.
Serba Dinamik then in July appointed Ernst & Young Consulting Sdn Bhd (EY) as the independent reviewer to assess the veracity of the audit issues raised by KPMG.
The group said the decision to appoint EY was on the back of discussions with the regulator.
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.
In August, Serba Dinamik appointed Nexia SSY PLT as its new external auditor.
Since the appointment, Serba Dinamik has yet to reveal any findings on the special audit.
At 12.30pm on Friday, Bursa Securities announced the trading suspension of Serba Dinamik shares and all structured warrants, effective from 2.30pm until further notice.
Prior to the suspension, Serba Dinamik fell two sen or 5.41% to 35 sen, valuing the company at RM1.31 billion. The counter was traded between 33.5 sen and 36 sen.
Despite the stock being traded for half a day only, it was the most-actively traded counter on local bourse with 105.18 million shares traded.
Notably, Mohd Abdul Karim had sold all of his warrant holdings although the derivative price was near record low before the trading suspension of the company shares was announced.
Based on the closing prices on the transaction dates, Mohd Abdul Karim is expected to have netted RM4.3 million from the divestment of the warrants he owned.
However, Mohd Abdul Karim bought one million shares or a 0.03% stake on Friday, bringing his stake in the oil and gas outfit to 21.225% or 787.38 million shares.
Serba Dinamik MD Abdul Karim buys one million shares on Friday after selling off entire warrant holdings
Bursa suspends trading of Serba Dinamik securities from 2.30pm on Friday until further notice
Serba Dinamik shares, warrants fall after MD disposes of entire warrant holding
Abdul Karim disposes of entire warrant holdings in Serba Dinamik at near record low prices