Serba Dinamik to take legal action against KPMG

SHAH ALAM, June 22  -- Serba Dinamik Holdings Bhd has decided to file a civil claim for substantial damages against its external auditor, KPMG PLT, on the grounds of professional negligence, breach of contract and breach of statutory duty.

The oil and gas services company said due to “the ongoing situation”, an adverse speculation has been created in the market that has, among others, resulted in a significant drop in its share price and overall market capitalisation.

In a statement today, Serba Dinamik recounted the events leading to the impasse between it and KPMG, which had raised certain issues in the course of its audit.

“After a comprehensive evaluation of this matter and obtaining a series of legal advice, we are of the view that Serba Dinamik has a good and actionable claim against KPMG as a result of their action or inaction in refusing to complete the audit,” the company said.

In order to clear any concerns with the regulators and the market, Serba Dinamik will still investigate the issues raised by KPMG and announce the findings, notwithstanding the filing of this civil suit, the company said in the statement, which was issued following an online press briefing by Serba Dinamik chairman Datuk Mohamed Ilyas Pakeer Mohamed today.

“Matters (highlighted by KPMG) were raised in a special board of directors meeting on May 3, 2021, where KPMG indicated that it was not willing to complete the audit until and unless a third party independent review is conducted on the alleged findings raised by KPMG,” the company said.

According to Serba Dinamik, the findings raised by KPMG are “not substantive in nature that warrants an independent review” and the issues faced by the auditor are “entirely attributable to their own negligence, among other breaches, in the course of the audit process.”

Serba Dinamik said the actions of KPMG ultimately led to the impasse and when news of this reached the open market, it resulted in a sharp drop in its share prices, market capitalisation and general confidence.

Meanwhile, Mohamed Ilyas said KPMG has blown the audit issues out of proportion.

“As result of that, shareholders suffered a loss. We had a market capitalisation loss of about over RM3 billion, which is not small for an oil and gas firm,” he said.

-- BERNAMA