KUALA LUMPUR (May 31): Malaysian Rating Corp Bhd (MARC) has placed its ratings of MARC-1IS /A+IS on Serba Dinamik Holdings Bhd's RM500 million multi-currency Islamic Commercial Papers Programme and RM1.5 billion Islamic Medium-Term Notes Programme with a combined limit of RM1.5 billion on MARCWatch Negative.

The ratings were assigned on May 11, the rating agency said in a statement today.

The MARCWatch placement arose from issues pertaining to the group's annual accounts for the financial year ending Dec 31, 2020 (FY20).

MARC noted that Serba Dinamik had addressed these issues in its recent briefing on May 29, which included customer confirmation on sales transactions and trade receivables following matters raised by external auditor KPMG PLT on May 3, pertaining to the statutory audit of the group for FY20.

MARC said that in its rating assessment on Serba Dinamik, it had incorporated the group's unaudited financial statements for FY20.

"The aforementioned issues have raised concerns on some of the group's transactions for FY20, hence the MARCWatch placement.

"Serba Dinamik is undertaking measures to resolve its audit issues for FY20, which include the appointment of an independent reviewer for the issues," said the rating agency.

MARC said it will resolve the placement based on the outcome of the independent review, including clarification on the matters that have been raised.

"The ratings would be affirmed in the event of a satisfactory conclusion of the issues raised but could be lowered should the findings have a material impact on Serba Dinamik's financials," it added.

Serba Dinamik shares hit limit down today upon resumption of trading after being suspended last Thursday and Friday. The 48 sen or 29.81% decline to RM1.13 today reduced the group's market capitalisation to RM4.21 billion.