KUALA LUMPUR: Serba Dinamik Holdings Bhd's non-independent and non-executive director Datuk Abdul Kadier Sahib has withdrawn a notice calling for an extraordinary general meeting (EGM) to replace KPMG PLT as its external auditor.
Serba Dinamik said it had also received a notice from Abdul Kadier on his earlier proposed nomination of BDO PLT as the new auditor after due consideration to the concerns raised by the shareholders and stakeholders that had been supporting the group.
"Abdul Kadier is looking forward for the management and KPMG to arrange for an engagement session to enable both parties to achieve an amicable solution to the raised matters," the company said in a statement on Wednesday.
Abdul Kadier Sahib, who owns a 15.96 per cent stake to be the company's second largest shareholder, had on Friday called for an EGM to replace KPMG.
Earlier, KPMG announced that it had stopped its audit process on Serba Dinamik and flagged audit issues involving trasanctions of about RM3.5 billion.
On May 29, Minority Shareholders Watch Group, in a statement, urged all minority shareholders to vote against the resolution.
The Malaysian Institute of Corporate Governance said Serba Dinamik's decision to use the process of removing its external auditor when its executive was unhappy with the audit findings was not appropriate.
Meanwhile, Serba Dinamik group managing director Datuk Dr Mohd Abdul Karim Abdullah said it would appoint an independent audit firm on Friday (today), the earliest to resolve the audit issues.
Abdul Karim also said it would decide on whether to appoint BDO PLT or different audit firm, to complement the group's external auditor, KPMG.
"I have been caught by surprise over these irregularities," he told the New Straits Times when contacted yesteryday.
He said the newly-appointed independent auditor would need to confirm if there was any discrepancy in terms of the sales transactions.
Mohd Abdul Karim had previously validated that there were no issues with the contracts and transactions made by Serba Dinamik.
"My job is to strengthen the fundamentals and governance to get the group sustainable. I will give full cooperation to support this and focus on the company's ongoing business," he added.
He expects the oil and gas services activities to pick up this year on the back of the improved Brent crude oil at about US$71 per barrel, which in turn would allow more contracts and services for Serba Dinamik to partake.
Abdul Karim expects Serba Dinamik to reduce its dependence on O&G sector with a revenue contribution of 45 per cent by 2022, diversifying its focus on technology-related segment.
In a separate statement today, Fitch Ratings said it had downgraded Serba Dinamik's long-term issuer default rating to "B-" from "BB-".
The firm also downgraded Serba Dinamik's senior unsecured sukuk due 2022 and 2025 to "B-" from "BB-" with a recovery rating of "RR4".
The ratings have been placed on Rating Watch Negative (RWN).
"The downgrade reflects the pressure on Serba Dinamik's liquidity and the elevated refinancing risk from its short-term debt maturities in 2021 and its US$222 million sukuk due May 2022.
"We believe the company's access to debt funding has been compromised after its auditor, KPMG, requested an independent review when a 2020 statutory audit raised multiple questions over the company's operations."
Fitch expect to resolve the RWN following the completion of the review and the company demonstrating it had access to funding to enable it to refinance its upcoming debt maturities.
