KUALA LUMPUR (June 4): Shares of Serba Dinamik Holdings Bhd touched a fresh record low today, extending the week’s losses after a short-lived rebound this morning.
Its share price fell seven sen or 8.4% at 76.5 sen, after touching a high of 85 sen this morning.
The stock, which has hogged the limelight for the wrong reason, remained actively traded today with a trading volume of 425.4 million shares, making it the second most traded counter on Bursa Malaysia.
For the week, Serba Dinamik’s share price plummeted from RM1.61 to end the week at 76.5 sen, down 52.5% or 84.5 sen.
The fierce selldown sparked by issues on its financial accounts for the year ended Dec 31, 2020 (FY20) raised by auditor KPMG PLT, has wiped off RM3.15 billion from its market capitalisation (cap). At the closing of 76.6 sen, the company’s market cap was at RM2.85 billion, compared with RM6 billion before the audit issues were made public.
It is not hard to fathom as to why investors shunned the stock, after Serba Dinamik's external auditor flagged certain issues involving a sum of over RM4 billion for FY20.
In fact, it has been an eventful week for the company.
While Serba Dinamik announced it wanted to conduct an independent review on the findings of its auditor KPMG, the company’s second largest shareholder Datuk Datuk Abdul Kadier Sahib sent a notice to the management to call for a shareholder meeting to remove the auditor who flagged the red flags.
The proposal to remove the auditor did not go down well with investors. This raised concerns that the truth might not be uncovered.
In an interesting twist, Abdul Kadier, who is also a member of the audit committee and an non-independent non-executive director, changed his mind and withdrew the notice to remove the auditor, after the company’s institutional shareholders, Employee Provident Fund and Permodalan Nasional Bhd, voiced their concerns on Serba Dinamik's corporate governance.
As its share price was on the slide, Abdul Kadier, alongside largest shareholder Datuk Dr Mohd Abdul Karim Abdullah, had also bought shares this week, raising their stakes to 16.17% and 27.07% respectively.
KPMG remains Serba Dinamik's auditor. Did the auditor go to the wrong addresses when verifying the suppliers? Shareholders deserve the truth.