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Serba Dinamik to finalise EY appointment as independent reviewer in “one to two weeks”, says chairman

KUALA LUMPUR: Serba Dinamik Holdings Bhd will finalise the appointment of Ernst & Young Advisory Services Sdn Bhd (EY) as its independent reviewer in one to two weeks.

Serba Dinamik chairman Datuk Mohamed Ilyas Pakeer Mohamed said the company had spoken to EY on its appointment to assess the veracity and accuracy of the issues highlighted by its former external auditor KPMG.

“Once we settle the legal working arrangement, EY can start doing their jobs. In one to two weeks’ time, we will finalise the appointment.

“EY will only do the external audit review, but the audit is not complete yet. So now we have to get another auditor (among the Big Four) to complete the statutory audit. The proposal is out to invite the new auditor, now we just wait for the process to commence,” Mohamed Ilyas told the New Straits Times.

He said the company would also appoint new independent non-executive directors (INEDs) to replace the resigned directors as soon as possible.

Serba Dinamik had identified a few candidates, he added.

“We have already identified a few bankers, regulators, former regulators and people from the oil and gas industry et cetera. The nomination committee will make the decision, but of course we will take people who can take the heat and go through the problem that we had.

“We are getting their curriculum vitae and reviewing them. Many people are still interested in Serba Dinamik. They want to come in and help the company to solve the crises,” Mohamed Ilyas said.

Previously, five INEDs resigned from the board, with four of them citing differences in opinion over the company’s decision to take legal action against KPMG.

He said the ex-INEDs’ resignation was mainly because they were not able to face the challenges arising from the audit concerns.

“They did not do much against KPMG. When it comes to crisis management, they could not manage it and did not know how to solve the crisis. Thus, the fastest way for them is to resign. There is nothing to hide because we are a public listed company. Serba Dinamik has 7,000 staff, how can we lie to them?” he asked.

Mohamed Ilyas reiterated that Serba Dinamik had to take legal action because KPMG was allegedly negligent and irresponsible, not only to the company but also the shareholders.

Serba Dinamik has been embroiled in a dispute with KPMG after the latter highlighted audit issues involving transactions of more than RM3.5 billion to the company’s independent directors last month.

KPMG had reportedly told theedgemarkets.com last week that Serba Dinamik’s civil claims had no legal basis and it would firmly refute the allegations if the matter went to court.

Mohamed Ilyas said the audit issues raised by KPMG was not “a margin missing” as the firm could not verify the amount.

“The direct effect is not RM4 billion. It is less than 10 per cent from the total revenue. This is not a margin missing. They cannot identify the amount. When KPMG sent the audit confirmation to the 11 companies, the companies were not answering because it was not regulatory for them to reply,” he said.

Overall, Mohamed Ilyas said investors needed to focus on the basics of the company, not the rumours as Serba Dinamik was doing well with an RM18 billion order book.

“Every year, Serba Dinamik registered about RM6 billion turnover and RM1 billion profit. Thus, the company is healthy and we are above industry average.

“We are operating as usual. We can confirm that there will be no funding disruption to the business. We are not involved in any fraud, so there will be no reason for investors to pull out any funding,” he added.