IT is perhaps an understatement now that the Serba Dinamik Holdings Bhd-KPMG saga has inflicted a big hole on the market capitalisation of the global integrated oil & gas (O&G) service provider.
The “big hole” syndrome has equally impoverished the pockets of countless retail investors and institutional funds as Serba Dinamik’s market cap has dwindled 62% to RM2.3 bil at the time of writing from RM6 bil prior to its trading resumption from suspension following the flagging of accounting matters to its FY2020 financials by its external auditor.
Staring at its 52-week share price range from 54 sen (all-time low posted on June 14) to RM2.09, one can wonder the financial anguish of investors who would have bought into the company at its peak.
Even the Employees Provident Fund (EPF) which is the retirement fund proxy to 14.6 million members has to bite the bullet.
Imagine how the fund’s decision to dispose 18.5 million shares alone on June 15 and 17 at a loss (could be more than 50% below the purchase price) would adversely impact its equity earnings.
Well, some wise men say “let bygones be bygones” while other wise men say “always take a chapter from history to prevent lightening from striking twice”.
In retrospect – if only one is able to re-visit the past – wouldn’t it be a joy to watch both ‘warring’ parties sit down on the round table to resolve the pending issues amicably and internally?
Wouldn’t this bring about a win-win outcome even if they have to shout and scream their hearts out so long as those exchanges took place in an indoor confine and only transpire between themselves?
In other words, wouldn’t it be more fruitful supposedly KPMG could thrash out to its client what was lacking in its findings instead of blowing the matter out of proportion by red flagging the issue?
After all, this is the impression that many layman investors are getting – while the Serba Dinamik management had willingly offered whatsoever assistance required by the external auditor, the latter still went ahead to wave the red flag.
Now that the dirty linen have already been aired in public, there is nothing much that can be done except to allow the latest chain of events to take its course.
Yesterday, Serba Dinamik has taken its impasse with KPMG a step further by filing a civil claim for substantial damages inflicted on its share price and market capitalisation.
Among others, the claims will be made on the grounds of professional negligence, breach of contract and breach of statutory duty, according to the company’s newly-appointed chairman Datuk Mohamed Ilyas Pakeer Mohamed.
To cite an example of how a common sense issue can become so mind boggling, Mohamed Ilyas pointed to how KPMG had taken issue with discrepancies arising from a name of foreign vendor which was designated with an “L.L.P.” whereas in subsequent invoices the company concerned designated themselves with an “LLP”.
“The difference of these two abbreviations is akin to a company having a “Sdn. Bhd.” and “Sdn Bhd” where these matters were not substantive in nature and would have been easily resolved with some diligence,” lamented Mohamed Ilyas.
“We have also noted that the entire process of audit confirmations undertaken by KPMG did not observe international and local protocol such as not having any or adequate engagement between KPMG and Serba Dinamik which is a fatal mistake on KPMG’s part.
At least until we listen to KPMG’s side of the story, this seems to be the only light that investors can hang on to.
At 12.29pm, Serba Dinamik was down 1.5 sen or 2.40% to 61 sen with 103.95 million shares traded, thus valuing the company at RM2.27 bil.
