Awaiting Serba’s SIR report: When no news is not necessarily good news

ON July 2, Serba Dinamik Holdings Bhd appointed Ernst & Young Consulting Sdn Bhd (EY) as the special independent reviewer to assist its board in undertaking a special independent review (SIR).

The SIR is to ascertain the truth and veracity of certain matters highlighted by its former external auditor KPMG PLT.

It is going to be close to two months now and to-date, the company has not announced an indicative date as to when the SIR report will be available.

The SIR is not an external audit of the financial statements and its scope is limited to the matters highlighted by KPMG.

Devanesan Evanson

Surely, between the company and EY – by now – should be able to iron out an indicative date for the release of the SIR report and the findings thereof.

Serba Dinamik should provide an indicative date as to when the SIR report will be available to provide some comfort to the minority shareholders as to when they can expect this major milestone to be reached.

Bursa Malaysia should also liaise with the company to elicit an announcement of this indicative date.

Otherwise, no news may not necessarily be perceived as good news by minority shareholders, as the longer it takes, the greater the uncertainty among minority shareholders.

Looming deadline

The external audit deadline of Oct 31 for Serba Dinamik’s accounts for financial year ended June 30 is fast approaching – and the last thing that minority shareholders want to hear is an extension of time for the issuance of the external audit report.

Such an extension will add further uncertainty to minority shareholders.

The audit committee should be meeting more often to oversee the audit process and to ensure that all necessary information is made available to the external auditors. It must ensure that the audited financial statements are issued by the Oct 31 deadline.

At the end of the day, both the board and the external auditor report to the shareholders.

Conundrum of sorts

There may be a risk that both the SIR and the external auditor are waiting for each other to finish their respective work so that they can rely on the other’s findings. However, the external auditor does not have the luxury of time due to the looming deadline.

As for the SIR, it would be perplexing if their report came out after the external audit report given that the former’s scope of work is limited to only to the truth and veracity of certain matters as opposed to the external auditor’s full audit of the financial statements.


Minority shareholders want visibility. They want visibility as to when the SIR report will be released along with the findings – even an indicative date will suffice given that nearly two months have lapsed since the appointment of the SIR reviewer.

It would be good – and both comforting and assuring – if the company can make a commitment that things are on-track to release the audited financial statements before the deadline.

This is not a typical announcement that a PLC makes but given the circumstances, it would be both understandable and reassuring. – Aug 28, 2021


Devanesan Evanson is the CEO of the Minority Shareholders Watch Group (MSWG).

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.

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