Serba Dinamik shareholder PNB has 'deep concern' after audit issues raised

Kuala Lumpur

MALAYSIA'S largest fund manager Permodalan Nasional Bhd (PNB) on Wednesday said it was deeply concerned by developments at Serba Dinamik Holdings Bhd , which is under investigation by the country's securities regulator.

The comments from PNB, Serba's fifth-biggest shareholder, follow the revelation last week that Serba's auditor KPMG had not been able to verify contracts and transactions totalling RM3.5 billion (S$1.12 billion) with

11 customers, prompting an investigation by Malaysia's Securities Commission.

Serba, an oil and gas services firm, rejected those concerns and said there are no issues with the contracts. It plans to appoint an independent firm to review the issues.

"PNB has informed the Serba Dinamik board of directors of the firm's deep concern about recent developments," the fund manager told Reuters in an e-mailed statement.

It also said there is no merit in removing the appointed auditor before they finish the annual audit, adding that it reserves its right to vote against any resolution to replace the current auditor.

Serba's second-largest shareholder last week proposed removing KPMG as auditor after the audit issues first came to light.

KPMG, in its first public comments on the matter, told Reuters it remained in communication with Serba Dinamik.

It declined to comment further, citing ongoing investigations and client confidentiality.

Shares of Serba Dinamik have lost about 46 per cent of their value so far this week.

They were trading up 3.6 per cent on Wednesday, after heavy losses in the last two sessions. REUTERS