KUALA LUMPUR (May 28): Serba Dinamik Holdings Bhd said its non-independent non-executive director Datuk Abdul Kadier Sahib, who is also the second largest shareholder, has proposed to remove KPMG PLT as the company’s external auditor.

Holding a 15.96% stake in Serba Dinamik, Abdul Kadier has also proposed to appoint BDO PLT as the company’s new auditor “in place of KPMG PLT for the financial year ending June 30, 2021”, the company announced to the stock exchange this evening.

The proposal to change auditor came two days after the oil and gas company announced that it is commencing a special independent review after its board of directors was informed by KPMG on some matters pertaining to statutory audit.

Concurrently, Abdul Kadier has also proposed for Serba Dinamik to convene an extraordinary general meeting (EGM), pursuant to Section 311 of the Companies Act 2016.

Serba Dinamik said that the special notice from Abdul Kadier for the proposals was received today, noting that the proposed change in auditor is subject to the approval being obtained from the shareholders at an EGM to be convened later.

In a statement issued on late Wednesday, Serba Dinamik managing director-cum-group chief executive officer (CEO) Datuk Dr Mohd Abdul Karim Abdullah later said the company has not changed its business structure materially since the initial public offering (IPO) in 2017 and has worked with KPMG since 2013.

The company is now targeting to release its annual report by Oct 31, having changed its financial year end to June 30, from Dec 31 just earlier this month. It cited challenges in finalising its financial statement from its operations across more than 20 countries due to the Covid-19 pandemic.

Karim is the single largest shareholder holding a 26.93% stake in Serba Dinamik. The Employees Provident Fund is the third biggest shareholder owning 10.15% while Kumpulan Wang Persaraan (Diperbadankan) has 5.25%..

While the substantial shareholder intends to remove the auditor, Serba Dinamik’s minority shareholders, however, are still kept in the dark. The board has yet to disclose details on the issues that KPMG has flagged to the management.

Serba Dinamik’s board is chaired by Datuk Mohamed Nor Abu Bakar, who was formerly the chairman of Petronas’ Kerteh Integrated Petrochemical Complex up till 2007.

The company’s independent directors include KPMG Malaysia former partner Hasman Yusri Yusoff, Nationwide Express Holdings Bhd former managing director Rozilawati Basir, as well as accountant Sharifah Irina Syed Ahmad Razi and lawyer Tengku Datuk Seri Hasmuddin Tengku Othman.

Abdul Kadier, together with Abdul Karim and Datuk Awang Daud Awang Putera were the promoters of Serba Dinamik’s IPO in 2017.

Awang has since pared his stake to 2.23% from 11.7% post-IPO.

According to Serba Dinamik’s official website, Abdul Kadier is a member of the Party Pesaka Bumiputera Bersatu Sarawak.

He is also an active member of the Bumiputera Chamber of Commerce Sarawak, and served as a member of the Consultative Council to advise Bintulu Development Authority on the development and local government functions in Bintulu, Sarawak until 2019.

According to a TA Research analyst report dated May 27, the audit matters raised by KPMG to the board of Serba Dinamik pertains to the company's financials for the financial year ended Dec 31, 2020 (FY20).

“We understand from management that as part of its annual audit process (start: October 2020), KPMG had requested Serba Dinamik for assurances on risk factors. The latter was identified earlier in April 2021 and officially submitted to Serba in early May 2021," TA Research said.

Serba Dinamik has suspended its shares from trading since Thursday. The counter last traded at RM1.61, valuing the group at RM6 billion.