Ernst & Young (“EY”) has agreed in principle to be appointed as the independent reviewer for Serba Dinamik. The need for independent reviewer is required to assess the veracity and accuracy of matters highlighted by KPMG in its audit findings for Serba Dinamik’s 2020 financial statements.
Serba Dinamik in its status update to Bursa Malaysia on 28 June 2021, highlighted that the following conditions are imposed by EY before they are able to act as the independent reviewer:
- EY requires full and unfettered access to KPMG for information and confirmation for the purpose of analysing the transactions highlighted by KPMG;
- The engagement is to be under close supervision of the Securities Commission of Malaysia and Bursa Malaysia;
- The engagement will report to the independent board members for Serba Dinamik; and
- No changes to the scope as previously agreed with the independent directors and Bursa Malaysia.
EY has also demanded a written confirmation from KPMG that co-operation in the form of access and information will be provided to EY for the purpose of understanding the alleged irregularities and anomalies identified, including
- The confirmation process of matters sent to the identified customers; and
- Relevant work papers including confirmations and correspondences in relation to the findings and concerns raised.
KPMG, to-date has yet to provide clearance or agreement on the above matter.
Previously, Serba Dinamik sued KPMG for RM4 billion in relation to loss and damages. Serba Dinamik claims that KPMG has failed and/or neglected to complete the audit report until and unless a third-party independent reviewer is being appointed and addressed the findings raised. KPMG then resigned as the external auditor of Serba Dinamik by virtue to the independent requirements set by the Malaysian Institute of Accountants (“MIA”).