PETALING JAYA: Shares of Serba Dinamik Holdings Bhd hit limit down upon being requoted after two days of suspension as investors sold the stock on issues surrounding its past sales deals.
At the opening bell, the stock dived to RM1.13, down 30% or 48 sen.
Stocks linked to the engineering solutions provider for the oil and gas industry, namely, KPower Bhd and Sarawak Consolidated Industries Bhd, were also lower by 13% and 19% to RM1.14 and 93.5 sen at the mid-day break.
Meanwhile, Reuters reported that the Securities Commission (SC) has commenced an investigation into Serba Dinamik after the company’s auditor flagged issues last week. The newswire said yesterday the regulator had secured documents and records from the company to assist its investigation.
Serba Dinamik has been in the news since last week when when it said it was informed by its external auditors, KPMG, on “some matters pertaining to statutory audit”.
The matters in question include those related to sales transactions and trade receivables involving a sum of more than RM3.5bil.
Serba Dinamik has said that it would be appointing an independent firm to commence a special independent review “to assess the veracity and accuracy of the matters”.
It also plans to put forth a motion requested by one of the company’s largest shareholders and non-independent director, to replace the current auditors, KPMG with BDO PLT.
The company’s largest shareholder is the group managing director and chief executive officer Datuk Mohd Abdul Karim Abdullah (pic) who has close to a 27% stake in the group.
This is followed by Datuk Abdul Kadier Sahib, the one who requested for the removal of KPMG, who holds close to a 16% equity stake.
The other two largest shareholders are the Employees Provident Fund and Kumpulan Wang Persaraan (Diperbadankan) or KWAP, which will no doubt, be key in the decision on the removal of KPMG.
Only a simple majority is needed for this resolution to be passed.
In a note to clients yesterday, AmInvestment Bank’s research arm said it was maintaining its “sell” call on Serba Dinamik with unchanged forecasts and a fair value of RM1.26 per share.
“While we appreciate the greater transparency by management on these matters, the removal of the current auditor could raise yet more difficulties for both the independent review and audit progress, given the current Covid-19 movement restriction which has already delayed the FY12/20 audit process, ” it said.
The research unit said until the review was completed together with the audit finalisation and issuance of the group’s annual report by Oct 31, it expects negative market speculation to continue impacting its share price.
This could last up to five months, according to AmInvestment.
Another analyst who tracks Serba Dinamik but declined to be named said Serba Dinamik will likely suffer “an integrity issue”, until all the necessary reports have been completed.
Notably, the company has engaged stakeholders and shareholders as well as analysts and media over the past few days, providing explanations for each of the issues that had been raised by KPMG.
It also said that it had replied to KPMG on the matters raised by it but the auditors had yet to reply.