At a press conference, he said KPMG has “negligently red flagged some issues”, and claimed that the external auditor had “blown the audit issues out of proportion”.

In May, Serba Dinamik said KPMG had not been able to verify contracts and transactions worth RM3.5 billion with 11 customers. Serba Dinamik has since said it saw no issues with the existence or legitimacy of the contracts.

“We filed the action early this morning,” said the group’s legal consultant Muhammad Shafee Abdullah.

Shafee asserted that KPMG raised the issues in an inappropriate manner, saying “KPMG should have resorted to meeting the client and raising the (audit) issues one by one to find out the answers,” he said.

Serba Dinamik has been embroiled in an auditing dispute with KPMG after it highlighted discrepancies involving transactions worth RM4.54 billion to the company’s independent directors last month, based on the financial accounts for the financial year ending Dec 31, 2020.

The company earlier announced that its board had agreed in principle to appoint Ernst & Young Advisory Services Sdn Bhd as an independent reviewer to assess the matters raised by KPMG.

Since the issues were made known, the company’s institutional investors, including Employees Provident Fund and Permodalan Nasional Bhd, have voiced concerns over Serba Dinamik’s governance.

Since the company announced that KPMG had questioned its accounts on May 25, its share price has plummeted 61.5% to 62 sen as of publication.