Serba Dinamik gave an update on the auditor concerns that were flagged on Thursday. The O&G services company said that their auditor KPMG tried to check on sales transactions, trade receivables and on site balances of materials, but received a response from only one of their 12 customers. KPMG also questioned why several suppliers shared the same address and some had very low levels of paid-up capital despite the large size of their transactions with the company. Serba replied the shared address was because the suppliers used the same secretarial service. They added that some suppliers came under the Malaysian government’s ‘vendor development programme’ to support growth of local companies,. Under the programme, these companies were not required to have a large share capital to be considered as suppliers. They added that their non-executive director Abdul Kadier Sahib (who owns 15.96% of Serba Dinamik) had filed a notice to replace KPMG as the auditor. They have set-up a committee of non-exec directors, legal advisors, internal auditors, company secretary and key management to review the findings. Besides, they plan to appoint an independent firm next month to investigate these issues.
Despite the company coming out with the update, their dollar bonds plunged. Its 6.997% 2025s and 6.3% 2022s fell sharply again by 25 and 35 cents to ~35 cents on the dollar each.
