Serba Dinamik Annual Report 2021

Registration No: 201501042584 (1167905-P) Serba Dinamik Holdings Berhad (Incorporated in Malaysia) 138 40. Subsequent events 40.1 Material litigation (a) The Company vs. KPMG PLT On 22 June 2021, the Company has filed a Writ of Summon (“WOS”) together with the Statement of Claim (“SOC”) at the High Court of Malaya at Shah Alam against the former auditor, KPMG PLT (“KPMG”). The circumstances leading to the filing of the WOS and SOC by the Company is based on the Company’s contention that KPMG has failed and/or neglected to complete the audit report until and unless a third party independent reviewer is being appointed and to verify the findings as raised by KPMG. Yet prior to such verification, KPMG had taken steps in breach of its professional obligation to cause unwarranted and adverse speculation in the open market resulting in loss and damage on the Company. The Company contends that the findings raised by KPMG that were still subject to review and verification (as requested by KPMG) were incomplete and premature to be disclosed to third parties. The issues faced by KPMG were entirely attributable to their own negligence in the course of the audit process. Furthermore, the Company is of the view that KPMG’s act of halting the audit process pending a third party independent review was in the circumstances a further breach of professional duty as it has inevitably delayed the preparation of the audit report and would under normal circumstances create adverse speculation in the market. Ultimately the Company takes the position that KPMG’s actions taken collectively, amounts to professional negligence and a breach of statutory duties pursuant to the Capital Markets and Services Act 2007. The claims pursuant to the WOS and SOC are as follows: i) General damages; ii) Punitive damages; iii) Aggravated damages; iv) Interest at the rate of 5% per annum on such damages as may be awarded in favour of the Plaintiff from the date of filing of this Writ until the date of realisation; and v) Costs Apart from the amount claimed by the Company and the corresponding legal costs, the WOS together with the SOC are not expected to have any other material adverse financial impact on the Company for the financial period 30 June 2021. Both WOS and SOC are not expected to have any business and operational impacts on the Company.