SHAH ALAM – Serba Dinamik Holdings Bhd will file a civil claim for substantial damages against its external auditor, KPMG PLT, on the grounds of professional negligence, as well as breach of contract and statutory duty.
The oil and gas services firm 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 prices and overall market capitalisation.
Serba Dinamik in a statement yesterday recounted the events leading to the impasse between it and KPMG, which has 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 its action or inaction in refusing to complete the audit.”
In order to clear any concern with the regulators and market, it said Serba Dinamik will investigate the issues raised by KPMG and announce the findings, notwithstanding the filing of the suit.
The statement was issued following an online press briefing by director Datuk Mohamed Ilyas Pakeer Mohamed yesterday.
“Matters (highlighted by KPMG) were raised in a special board of directors meeting on May 3, where KPMG indicated that it is not willing to complete the audit until and unless a third party independent review is conducted on the alleged findings raised by KPMG,” said Serba Dinamik.
It said the findings raised by the auditor are “not substantive in nature that warrants an independent review” and issues it faced are “entirely attributable to its own negligence, among other breaches, in the course of the audit process”.
It said the actions of KPMG have ultimately led to the impasse, and when the news reached the open market, it resulted in a sharp drop in its share prices, market capitalisation and general confidence.
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.” – Bernama, June 23, 2021
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