Serba Dinamik has formally appointed Ernst & Young Consulting Sdn. Bhd. (“EY”) as the independent reviewer to assist in undertaking the special independent review.
The appointment of EY as a special independent reviewer is to assess the accuracy and veracity of the matters highlighted by Serba Dinamik’s former external auditors, KPMG PLT (“KPMG”). Serba Dinamik has sued KPMG for RM4 Billion, for 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.
Previously Bursa Malaysia directed Serba Dinamik to appoint an Independent Reviewer by 2 July 2021, which will then report directly to Bursa Malaysia (“Bursa”) and the Securities Commission (“SC”) of Malaysia, periodically on the progress and the findings. Apart from that, Bursa also put a requirement for an independent reviewer to have a presence in Bahrain and such other overseas locations, where the customers and suppliers which were highlighted by KPMG are located.
The decision to appoint EY as an independent reviewer came after a discussion held between Serba Dinamik and Bursa Malaysia where EY is fit for the engagement, being a reputable “Big 4” accounting firm.
The appointment of EY is also made under the directive from Bursa Malaysia in accordance with Paragraphs 2.23 and 2.24 of the Main Market Listing Requirements.
Scope of work of EY as the Independent Reviewer
The scope of work of EY which has also been reviewed and approved by Bursa Malaysia, are as follows:
|1||a) To assess the validity and veracity of the transactions and balances with respect to the 11 identified customers on sales transactions, trade receivables and materials on sites;|
b) To quantify the possible financial impact, if any.
|2||To assess the validity and veracity of the purchases from six (6) identified local suppliers.|
|3||a) To assess the validity and veracity of the IT contracts/ transactions entered into with the six (6) identified customers and two (2) identified suppliers;|
b) To assess the appropriateness of the revenue and costs recognised in the financial year in relation to the identified customers and suppliers above.
|4||To assess the existence (where possible); and validity of the transactions and balances of the one (1) identified customer and one (1) identified supplier located in Bahrain.|
Previously EY has agreed to be an independent reviewer with conditions, and at this juncture there is no further comment on those conditions.