THE quest of Sarawak Consolidated Industries Bhd (SCIB) to venture into Peninsular Malaysia has become a reality by securing a RM138.5 mil project from the Terengganu State’s Public Works Department (JKR).
The contract follows the acceptance of a letter of award and acceptance (LOA) for an engineering, procurement, construction and commissioning (EPCC) contract by SCIB’s subsidiary, SCIB Industrialised Building System Sdn Bhd and Sasoakai Resources Sdn Bhd.
Both parties had on Feb 5 entered into a joint venture agreement in relation to the maintenance of roadworks contract in the Terengganu State on a concession basis for the tenure of 2021-2026.
The contract (second package; southern zone) covers the duration of Aug 1, 2021 to July 31, 2026.
“The contract secured is not expected to have any material effect on the net assets of SCIB and its group of companies (SCIB group) for the financial year ending June 30, 2022,” the company pointed out in a Bursa Malaysia filing.
“Any profits attributable to the group would be realised in stages over the tenure of the contract based on the progress of the project. The contract secured is expected to contribute positively to SCIB group’s future earnings over the duration of the contract.”
Commenting on the contract, SCIB said it is subject to normal business risks such as construction risk, increase in cost due to escalation of material costs, availability of skilled manpower and materials as well as contractual terms including default provision and subcontractors’ performance.
“However, SCIB will put in place control measures and operational procedures to mitigate the risks,” added the company.
KPMG quits as auditor
In an unrelated development, SCIB said it has received a notice dated July 23 from KPMG PLT on their resignation as the company’s external auditor of with immediate effect.
To put the matter into context, SCIB has been seeking legal advice regarding recent events surrounding KPMG that has caused adverse speculation against the company. This is in light of a perception that the company shares similarities to Serba Dinamik Holdings Bhd which is currently in litigation with KPMG.
“Accordingly, concerns were raised by the company as to whether KPMG is able to continue acting independently in their capacity as auditor consonant with Rule 400.5 of the Malaysian Institute of Accountants By-Laws (on professional ethics and conduct),” SCIB noted in a separate Bursa Malaysia filing.
“Following this, KPMG has in its notice stated that the views and opinions of the company on KPMG’s independence, coupled with the potential of a claim by the company, has compromised KPMG’s ability to continue to independently discharge their professional duties as auditor of the company.”
At the close of today’s mid-day trading, SCIB was down 1.5 sen or 2.07% to 71 sen with 4.6 million shares traded, thus valuing the company at RM348 mil. – July 26, 2021