January 26, 2022

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Dear KPMG, You Are Certainly Not A "Shoplot Auditor". But If You Were, The Shoplot Would Be Priceless"

Pic Source : The Edge TV
In my honest view, I assumed that the episode of Serba Dinamik was over after a majority shareholder decided to withdraw calling an EGM to remove KPMG as auditor and the Board's "agreement in principle" to hire EY as an independent auditor. Instead it went up a notch with a press conference being called not to calm shareholders who are sitting on massive losses but to flex their muscle through threat, intimidation and name calling. This spectacle of corporate mess is truly eye opening for an otherwise usually subdued and professional corporate scene in Malaysia.

I supposed when you appoint new independent directors to the board and re-designate your chairman in a time of crisis, you would expect someone of great stature and composure who carries the air of integrity in order to command respect from the public. At the very least, it must be someone who have the knowledge and aptitude to give assurance to investors whilst allaying fears of uncertainty. I did not see any of that from Serba Dinamik's 22nd June press conference.

As mentioned in my earlier article, the law provides that the legal principle of "Presumption of Innocence" should be applied to everyone. One is innocent until proven guilty and have the right to stand before the law, not as a guilty party but as an innocent man. For a corporate entity which was once the darling O&G stock of Bursa, it is not your ordinary penny stock with dodgy shareholders. The shareholders of Serba Dinamik includes guardians of the Rakyat monies such as EPF, KWAP, PNB and Tabung Haji. It is supposed to be a safe company run by respectable professionals. Yet, as the drama unravels, it seems to point towards a complete opposite. Now is this the fault of KPMG, the external auditor who have been appointed since 2013?

Well, let me share my view of auditors. Like them or hate them, they perform an essential role of the corporate world. In terms of governance, their function is indispensable. Growing up, I was told that one of the safest job is to be an accountant. You are the last to go, even in the times of recession. Someone needs to ensure the books of the company are in order, or so they say. Sadly, amongst all professional licensed occupation such as doctor, engineer, lawyer, architect, an accountant specifically auditor is the least well paid relative to the hours clocked in. The tedious amount of work, strict deadline and voluminous documents to sift through truly sucks the soul of a person. Hence, I have much respect for auditors and more so for those who are willing to stand their ground when they find irregularities or red flags. It takes courage and effort in comparison to turning a blind eye. Life could have been simpler if one just ignores.

So contrary to the insults hurled towards KPMG by the new Chairman, I take my hats off to you KPMG and the team of auditors in charge. You should hold you head up high and be proud for doing the right thing. Martin Luther King, Jr. once said "The time is always right to do the right thing". In today's society where power, influence and money lord over the values of justice and integrity, it takes immense courage to do what you did.

The irony was, prior to the press conference, the YouTube link was circulated widely in the investment community. I noticed the share price of Serba Dinamik started moving from a low of 58 sens in the morning to a high of 65 sens. This meant that investors were hoping for something positive from the highly anticipated press conference. What the management did subsequently achieve none of that effect.

The verdict is not out yet. But I believe the drama is far from over. In time, we will know who is the actual, official "Gangster".
Once Upon A Time In Bursa - Entered MPH Weekly Bes...


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