what i am most afraid, the market is overly reacting to such subtle indication by KPMG with maximum prejudice....from prior conditioning made by the 1MDB saga

problem is i think Karim made a middleman entity as main contractor between serba and subcontractors...and he owns this middleman entity...

UAE govn has no choice but to pump into such investment generously as without such money flow, the country cannot sustain businesses....

chef, u underestimated UAE...check out how shindaga tunnel area looked like a year ago and how it appears now..

under covid condition in less than a year they built 6 x 5 star hotels there...



Posted by ChefKarim > Jun 5, 2021 2:07 PM | Report Abuse

Even a simple housing development will take years, this block 7 like less than 1 year already start pilling already. amazing. piling what? piling for the worker's quarter?

its public holiday there, u try on sunday and see

Posted by PSAi3alert > Jun 5, 2021 1:55 PM | Report Abuse

The number stated at the site was +971 2 5504023 . I tried calling but not reachable.

yes the entity is the primary issue...the rest is reaction based on concerns

the 3b in question is for the whole FY 2020 i suppose (30% of their annual revenue)...hope at least the remaining 70% they can verify


Posted by CharlesT > Jun 5, 2021 1:37 PM | Report Abuse

The crucial question is whether those Co in Middle East (related or not related) who gave more than 50% of theircurrent contracts are real or not

KPMG wrote in a subtle way. But investors are able to read the message between the lines...

Thats y u see 50% drops in mother shares n 70% in Bonds

charlest the bond sellers price is only drop 52% on asking price right?

https://www.bondsupermart.com/bsm/bond-factsheet/XS2089155761

in summary...i see auditor main concern is identity of those entity which made the transaction of 2.3 b , the entity with pending receivables...identification of some inventory and assets

by right serba should not have issues coming with verification on these...via a conference call with their clients

sifu charlest say i need to respect, you can take out my assertion there on junior auditor...it was all aimed to retrieve salient arguments from the naysayers...which till now i cant see anything concrete

https://www.thestar.com.my/business/business-news/2021/06/05/the-essential-role-of-an-audit

hopefully serba comes out open fast

i support both carlest sifu and philips...i am only here for the truth...

this could be either a jackpot like mmc corp i had or just a lure to get my fingers burnt

sifus....how to buy the bond? appears very attractive

will the bond holders have the same rights as debtors usually do upon liquidation of the company

will they be given first priority to retrieve their capital from whatever they get from assets liquidation?

ok naysayers win la... but till now i am still puzzled how such a basic thing - existence of a real customer has not been verified by the auditors

really amazing ability of Karim... even the 7.7 billion new contract....

to all kpower & SCIB shareholders, please go through in detail below KPMG query & Serba's reply. Details appears to be not that bad at all for SD....i see kpower and scib does not at all deserve this level share price punishment

https://www.theedgemarkets.com/article/kpmg-raised-audit-issues-transactions-involving-over-rm3-billion-says-serba-dinamik

LOL! I can only laugh...

i have also been audited...but sometimes the individual auditor make a hell of difference...

LOL...people who are certain on their views would no longer spend time to clear their doubts here ma...after all there is no doubt right..

but apparently things are not so straight fwd looks like...

may be a jab on the auditors made them feel reactive

KPMG was auditing Serba for many years right....why they did not realize this earlier - if its such a basic requirement?

i think the nerd auditor became a little hyper recently...cannot find a better explanation, seriously

Posted by colin888 > Jun 4, 2021 11:41 PM | Report Abuse

I was once an auditor and only if you have the exposure you would know the risks! Do not be foolish!

totally agree....LOL!

Posted by see2sea > Jun 4, 2021 11:40 PM | Report Abuse

All the negative comments here just follow what KPMG said.

Even bank analyst just follow bindly. They got alot of info from KPMG hah?

Kadier buy peanut shares has no significance to me....but the biggest question mark is the issues highlighted by KPMG - is it really concerning? is the queries addressed really cannot be replied to satisfaction of KPMG? I think its possible...

and its unlikely to deserve this level of share price decline on serba...

lets see how the truth unfolds..

all dont know blubbering what...tell the exact issue here...what is the MAJOR concern now from the audit report...

the auditor appears like a bookworm, even website can be faked man...

frankly i dont hold a single share of serba, but if i am the management of serba, like Kadier i will definitely get pissed off with the auditors with such query...

What kind of st*pid query is the below...instead of checking website just speak to the customer lor...


...............

(D) Trade receivables balances and sales transactions for information technology contracts

KPMG had noted that there was no company registration number and registered business of the customers as indicated in their respective contracts

(i) Certain suppliers’ invoices do not have registration numbers;

(ii) Two suppliers' and two customers' company stamps did not bear registration numbers;

(iii) Differences in the names contained in legal contract agreement, invoices, user acceptance test and customers' company stamps;

(iv) Differences in addresses contained in legal contract agreement compared with customers’ websites;

(v) Six out of seven customers will make direct payment to subcontractors and the Group will receive the net amount; and

(vi) Three customers have minimal share capital and were only incorporated in 2019 and 2020, one of the customer’s principal activities did not appear to be IT related.

KPMG viewed that they are unable to determine the appropriateness of the contracts and transactions as well as the revenue and cost recognised based on the above.

this simple comment says a lot about the auditors

Posted by Ron90 > Jun 4, 2021 10:52 PM | Report Abuse

if small time fly by night audit firm, can accept la findings like this, but if from KPMG.. that showed how downgrade they are now.. findings like this, good auditor will just give verbal comment la.. malu nak tulis dalam report pon.. we just focus on major issues... elementery findings, indeed true.

to all kpower & SCIB shareholders, please go through in detail below KPMG query & Serba's reply. Details appears to be not that bad at all for SD....i see kpower and scib does not at all deserve this level share price punishment

https://www.theedgemarkets.com/article/kpmg-raised-audit-issues-transactions-involving-over-rm3-billion-says-serba-dinamik

to all kpower & SCIB shareholders, please go through in detail below KPMG query & Serba's reply. Details appears to be not that bad at all for SD....i see kpower and scib does not at all deserve this level share price punishment

https://www.theedgemarkets.com/article/kpmg-raised-audit-issues-transactions-involving-over-rm3-billion-says-serba-dinamik

what is the meaning of 'transaction'? its not invoice for sure...

they say the truth is in the details....check the details and refute where you can...dont talk empty space lar...

pity kpower and SCIB who got dragged by this....turns out even SD could be completely innocent

young nerd KPMG auditor seems to be the whole problem...no wonder Kadier got irritated...

no one is in denial...we are seeing things objectively....SD wants to retain KPMG ma....they may need to send a senior experienced auditor from KPMG.....

receivable in question is only 0.6b, they questioned 'transaction' of 2.3 b...its a payment...i see this not a big issue

https://assets.theedgemarkets.com/pictures/serba-dinamik-audit-issue-tablefrmAin-for-Adam-KPMG-second-late-night-story-Fri28052021.png

receivable in question is only small portion, they were concern on 'transaction'' of 2 billion....already paid man!

Posted by colin888 > Jun 4, 2021 10:54 PM | Report Abuse

If the receivables are paid there will not be in this situation and no need to conduct special audit! Something is not right!

exactly Ron90...

Posted by Ron90 > Jun 4, 2021 10:52 PM | Report Abuse

if small time fly by night audit firm, can accept la findings like this, but if from KPMG.. that showed how downgrade they are now.. findings like this, good auditor will just give verbal comment la.. malu nak tulis dalam report pon.. we just focus on major issues... elementery findings, indeed true.

agree on that Ron90..

KPMG really sounds like a nerd scrutinizing every petty things...SD is already telling them to go for interview with their clients to verify...that shows a lot of confidence from SD side!

Do not conclude based what Fitch rating says and what Auditors say or what market says on its bond valuation which had dropped 70%...as these are all people from finance background..

i cannot see any stark issue....since SD is willing to cooperate & clarify to whatever KPMG needs

Guys. please read the above KPMG query - SD reply and see if SD could be innocent or not...

may be its time to whack on Tuesday!

funds probably got spooked by the prejudice build by 1MDB saga earlier involving middle east partners same like how SD is now...

i am beginning to feel SD is innocent

looking at above SD's reply, makes me think perhaps they can still pull through with an independent review

(D) Trade receivables balances and sales transactions for information technology contracts

KPMG had noted that there was no company registration number and registered business of the customers as indicated in their respective contracts

(i) Certain suppliers’ invoices do not have registration numbers;

(ii) Two suppliers' and two customers' company stamps did not bear registration numbers;

(iii) Differences in the names contained in legal contract agreement, invoices, user acceptance test and customers' company stamps;

(iv) Differences in addresses contained in legal contract agreement compared with customers’ websites;

(v) Six out of seven customers will make direct payment to subcontractors and the Group will receive the net amount; and

(vi) Three customers have minimal share capital and were only incorporated in 2019 and 2020, one of the customer’s principal activities did not appear to be IT related.

KPMG viewed that they are unable to determine the appropriateness of the contracts and transactions as well as the revenue and cost recognised based on the above.

Serba Dinamik’s reply:

In relation to (i) to (iv)

The management noted that KPMG had extracted the wrong addresses from the document.

Informed KPMG that there is no requirement for the company in the said jurisdictions to put the company’s registration number in the invoices but nevertheless the said number was stated at the bottom page of the invoices.

There is no requirement for the company in the said jurisdictions to put the company’s registration number in the stamp.

With regards to the different name, there is no significant differences in the name which has been highlighted e.g. “Ltd” or “Limited” / LLC against L.L.C.

In terms of legal contract agreement against the website address, (1) in one of the company, there was a slight typo in the address and; (2) for another case, the contract is as per the place of business whilst the website stated their registered office.

In relation to (v)

The mentioned subsidiary has entered into a tripartite agreement at client’s request where payment will be made directly to the sub-contractor. The company is of the view that the subsidiary acted as a principal to meet the contract’s obligations and hence, we believed that this subsidiary is able to recognise the revenue and cost associated with the contract.

In relation to (vi)

The company does not view that its customers’ profile must include huge paid-up capital in their books so long as the relevant customers are able to secure the contracts from the ultimate contract awarder and meet the legal requirements to perform such contracts. In relation to the company of which the principal activities do not appear to be IT related, there are no legal restrictions for them to participate in any other business activities.

Below are the pertinent points raised by KPMG, and the responses provided by Serba Dinamik in the filing:

(A) Certain customers’ confirmation relating to sales transactions, trade receivables and material on site balances

KPMG had sent out confirmations on the aforesaid balance where only one reply out of 12 customers was received by KPMG.

In order to hasten the process, the Company had subsequently sent a second confirmation to the remaining 11 customers with the same amount as in our first confirmation to the relevant debtors of which all have replied.

Based on the meeting dated 3 May 2021, KPMG has yet to test the completeness and is not able to verify the authenticity of the confirmations identified nor validate the person signing the confirmation.

Serba Dinamik’s actions for (A):

Proposed to arrange for interviews and other means of communication between KPMG and certain debtors to clarify matters;

The board also suggested to KPMG to send the third confirmation;

Requested KPMG to share the signed confirmation that was in contentious for the Company’s further investigation; and

Commitment to continuously assist KPMG.

(B) Certain transactions on purchases and trade payables balances on local supplier

Two local suppliers were incorporated on the same day.

Four local suppliers were found to have the same registered address as the two local suppliers above

Five out of the six suppliers were noted to have paid-up capital of RM100,000 each whereby each supplier is owned by an individual shareholder despite having transactions which ranges between RM60 million to RM96 million.

Serba Dinamik’s actions for (B):

Choice of local suppliers

The Government of Malaysia has implemented the Vendor Development Program (VDP) since 1998 of which the objective is to develop Bumiputera vendors to be successful in the manufacturing and services industry.

The Company became a Petronas vendor in 1997 and graduated from Petronas vendor in 2007 and subsequently, the government has appointed the Group as the anchor company for the program. The aforesaid suppliers are assessed and recommended by supply change management under the VDP.

Companies that were appointed as the group’s vendors do not require to have huge share capital as a condition to assign and fresh vendors will also be considered, through VDP.

Same address of local suppliers

Company has informed that the registered address was actually the company secretary’s office and these companies are using the same secretarial services. Arrangement on further interviews with the local suppliers 2 suppliers have agreed to meet up with KPMG. Notwithstanding, KPMG has yet to take any further action.

(C) Further information relating to customer and supplier in Bahrain

Office address cannot be located on physical site for the supplier and customer

KPMG has noted fax contact number of the customer as indicated in the official website is registered under one of the group’s employee but using ‘Truecaller’ application.

Serba Dinamik’s reply:

KPMG has sighted the wrong address and accordingly management had on May 6, 2021 provided KPMG with the right address.

Management had provided KPMG with the official telecommunication bill from the provider.

FOR EVERYONE's KNOWLEDGE, let me place the allegation info available:

https://www.theedgemarkets.com/article/kpmg-raised-audit-issues-transactions-involving-over-rm3-billion-says-serba-dinamik

KUALA LUMPUR (May 28): The audit issues raised by Serba Dinamik Bhd’s auditor KPMG are in relation to the company’s sales transactions, trade receivables and payables, as well as material on site balances, according to the company’s filing with Bursa Malaysia.

The announcement was made just two hours after Serba Dinamik’s non-independent non-executive director Datuk Abdul Kadier Sahib, who holds a 15.96% stake, proposed to call for an extraordinary general meeting to remove KPMG as its auditor and appoint BDO as replacement.

In its second filing today, Serba Dinamik said KPMG had raised issues relating to sales, trade payables and material on site balances involving 11 parties which accounted for total sales transactions of RM2.32 billion, trade receivables balance of RM652 million and materials on site balance of RM569 million.

The auditor also raised issues relating to purchases and trade payables involving six local suppliers involving a total transaction amounting to RM481 million, Serba Dinamik said.


Thirdly, KPMG also raised issues around Serba Dinamik’s customer and supplier in Bahrain, involving total sales transactions of US$101 million (RM417.48 million) and trade receivables balance of US$24 million (RM99.2 million).

Besides, the auditor questioned the trade receivables balances and sales transactions regarding its technology contracts involving multiple customers and suppliers.

KPMG said it is “unable to determine the appropriateness of the contracts and transactions as well as the revenue and cost recognised".

It is setting up an independent committee to manage and handle the matters in relation to the independent review that will report to the board of directors. “The composition of this committee will mainly comprise non-executive directors, legal advisors, internal auditors, company secretary and representative of the management,” said Serba Dinamik.

Serba Dinamik said it has responded to KPMG on the queries on May 6, but “to date, KPMG has yet to revert with the above”.

“The company is not able to substantiate the impact pending the review by the independent firm.

“The company takes the view that there is no issue with regards to the legitimacy and existence of the contracts as well as the value that will render any material impact to the financial and operational aspects of the group for the financial year ending June 30, 2021,” it added.

10 out of 11 customers sslee...thats way too much

3 billion in question at end of FY 2020 means the whole of Inventory + Receivables cannot be verified....

@RISK8888, if its only a small irregular transaction issue, eventually the price will go up again as the dividend yield is too good...though share price dip momentarily due to major fund disposal

@smoking, thank you so much for the valuable info

what logic is this...


Posted by partimeshark > Jun 4, 2021 5:47 PM | Report Abuse

sold my C29..
IB rugi kawkaw this time

there were also private placement right? did it go through...wonder these insider check on the business