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Serba Dinamik to rejig board with reputable appointments

The board has decided to appoint E&Y as its independent reviewer to assess the veracity and accuracy of the matters highlighted by KPMG


SERBA Dinamik Holdings Bhd will appoint credible corporate leaders to replace the resigned directors as soon as today or latest by Tuesday, as part of its move to reconstitute its board and shore up market confidence in the embattled counter.

The company is seeking to appoint Ernst & Young Advisory Services Sdn Bhd (E&Y) as its independent auditor to review the issues raised by its former external auditor.

Group MD and CEO Datuk Dr Mohd Karim Abdullah (picture) told The Malaysian Reserve (TMR) yesterday the group has identified some credible individuals with strong integrity and reputation from their previous work life to fill in the vacancies following the resignation of several board members last Friday.

“These are very highly reputable individuals who have garnered the respect from the public at large during their tenure serving the people of Malaysia.

“So, there will be more credible and stronger figures who are coming to take up the vacancies left by the exiting directors,” he told TMR.

Filings to Bursa Malaysia last Friday showed five of its independent and non-EDs have resigned, with four of them stating their disagreement over Serba Dinamik’s decision last Wednesday to take legal action against its former external auditor, KPMG Ltd, as their reasons for leaving.

KPMG resigned as Serba Dinamik’s external auditor last Thursday following the latter’s legal action against it.

Mohd Karim said the board has decided to appoint E&Y as its independent reviewer to assess the veracity and accuracy of the matters highlighted by KPMG.

“Independent review has been an issue, which has already been appointed by the board. The discussion with the regulator has also proceeded for some time by the previous (board members).

“Further fine-tuning will be taken up by the existing and new (board members) together with the regulator, we are resolving this, it has to be settled as soon as possible.”

Besides legal options, he said other options are also on the table including talking to the government, regulators and bankers.

“All options are there. Those options that we have prioritised are being put into motion. Due to lockdown and SOPs (standard operating procedures) need to be followed, this is not moving as fast compared to a non-lockdown environment.

“Legal action is one of the things that needs to be taken and at the end of the day, we still have to explain to our shareholders and stakeholders. All the necessary parties we need to update, communicate with, are done almost on a daily basis.”

As an entrepreneur, Mohd Karim said he is always ready to face challenges that come along and believes the fundamentals of Serba Dinamik remain firm.

“The company has been in the market for more than 28 years. I am sure it has strong fundamentals required to face strong challenges like that we are facing at the moment.”

The group is looking at business as usual, he added.

“We set up a crisis team. We also slated a legal solicitor to help us advise what needs to be done, so that we do not violate rules and regulations — domestic and international.

“This team has been set up to handle the existing case with the external auditor.

“So many things we are rolling out effective Monday onwards. Of course, we also start back the discussions and negotiations with prospects and so on,” he explained.

Serba Dinamik share price fell to a historic low of 41 sen last Friday as news of the resignations hit already fragile investor sentiment.

Heavy selling by institutional investors like the Employees Provident Fund has wiped out over RM4 billion in Serba Dinamik’s market value as the share price plunged from RM1.61 early this month.

That said, the company registered earnings of RM113.32 million for the January to March 31, 2021, period (5Q21) or earnings per share of 3.05 sen on the back of RM1.38 billion in revenue.

Its operations and maintenance (O&M) segment and engineering, procurement, construction and commissioning (EPCC) division contributed 90.5% and 7.2% of the amount respectively.

The O&M segment recorded a revenue of RM1.25 billion with a gross profit of RM214.6 million, mainly from operations in Qatar, the United Arab Emirates (UAE), Oman and Malaysia, the Serba Dinamik filing noted.

The EPCC segment contributed RM99.3 million of revenue, mainly derived from various contracts in Malaysia and the UAE.

The group stated it is actively expanding its ICT business activities worldwide by providing services relating to customised solutions involving software developments and also extended reality training applications.

As part of its initiative in reducing reliance on oil and gas, the group has procured two O&M and three ICT contracts in countries such as India, Indonesia and Malaysia.

The group has also embarked into the space industry and aims to render downstream services in the space sector by taking initiatives to improve connectivity for rural communities in Malaysia.

Commenting on KPower Bhd and Sarawak Consolidated Industries Bhd’s (SCIB) shares getting caught in the crosswinds of the problems at Serba Dinamik, Mohd Karim said the fall in the share values was basically due to perception.

“KPower and SCIB are two separate entities that should not be entangled in the Serba Dinamik saga. They are managed by different management teams, they also have different shareholders which align to the company’s goal and objective.

“I am just a shareholder there, holding a non-ED position. It should not be associated with Serba Dinamik,” he said.