Serba’s head honcho denies RM4.5 bil audit discrepancies

CLAIMS of audit discrepancies amounting to RM4.54 bil in Serba Dinamik Holdings Bhd transactions which have been widely circulated in numerous reports are inaccurate.

This has prompted the global integrated oil & gas (O&G) outfit’s group managing director/CEO Datuk Mohd Abdul Karim Abdullah to come forward to set the record straight on auditing issues pertaining to the company’s FY2020 statutory account.

“Everyone has read the information wrongly; the RM4.54 bil consists of items that shouldn’t be added together. You cannot add costs and revenue together which is how the figure has been derived. This goes against financial literacy,” he was quoted as telling the Free Malaysia Today (FMT) portal.

“Perhaps, people are intentionally trying to sabotage us by exaggerating the numbers. We are not ruling this out.”

The ‘exaggerated’ figure has appeared in numerous reports about Serba Dinamik’s ongoing legal dispute with its former external auditor KPMG which the company claims had led to the surfacing of several trivial issues that have since been responded to.

On April 12, Serba Dinamik’s board was unable to approve the company’s 2020 accounts after KPMG refused to complete its independent audit until issues it raised were addressed.

However, Abdul Karim said that even after the Serba Dinamik management had answered KPMG’s queries, the firm declined to continue its audit.

“Among the issues raised to the board were ‘trivial’ audit issues which our management responded to,” he insisted.

Datuk Mohd Abdul Karim Abdullah

These issues included the inability to verify documents because auditors went to the wrong address and a receptionist’s failure to confirm a staff member’s existence.

In Serba Dinamik’s defence, Abdul Karim said large companies had thousands of staff, hence receptionists may not know everyone in the organisation. Subsequent checks by the company confirmed the details of the staff member.

“In other instances, the auditors used the social media app truecaller to verify client contact, and made an issue out of the misuse of abbreviations like ‘LLC’ versus ‘L.L.C’ (which can be likened to spelling out ‘Sdn. Bhd.’ as ‘Sdn Bhd’).”

Despite responding to these concerns, Abdul Karim said Serba Dinamik still filed a Bursa Malaysia announcement which led to the suspension of its shares’ trading and a loss of RM4.5 bil in market capitalisation to date.

“This put the company, its institutional investors, normal shareholders and 7,000 staff members at risk,” he told FMT.

To re-cap, Serba Dinamik has since filed a civil suit against KPMG for gross negligence on June 22 with the Big-Four firm eventually resigned as the company’s external auditor on June 24.

Ernst & Young Consulting Sdn Bhd (EY) has since been appointed as the special independent reviewer to assess the accuracy and veracity of the matters highlighted by the KPMG.

At 10.40am, Serba Dinamik was down 0,5  sen or 1.27% to 39 sen with 52.48 million shares traded, thus valuing the company at RM1.45 bil. – Aug 2, 2021

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