The above was one of the images used in this blog's April 30th article entitled, "Is something big hatching on Malaysian rail involving Scomi?"
Its been awhile since this blog wrote anything regarding the Scomi deal with KTM. Its water under the bridge and KTM's maintainance will be Scomi Rail's. However, the story of Scomi Group on the brink has not ended.
Nuclearbursaman wrote that April 30th Star Online report on the resignation of Group CEO, Sammy Tse Kwok Fai was a red flag alert. It happened at the time this blog was writing on the KTM deal. Shah Hakim Zain and friends was back to the drawing board to save the company.
However, there have been another development early this month. Star Online reported:
The StarMon, Nov 01, 2021KUALA LUMPUR: The board of directors of Scomi Energy Services Bhd has announced that its external auditor Messrs Crowe Malaysia PLT has expressed a disclaimer of opinion in its audit report in respect of the financial statement for the financial year ended June 30, 2021.
"We do not express an opinion on the accompanying financial statements of the Group and of the Company.
"Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements," said Crowe in its report on the audit of financial statements.
According to the auditor, the preparation of the financial statement on a going concern basis is highly dependent on the approval and successful implementation of the group's debt restructuring plan and regularisation plan.
It noted that there are material uncertainties as to whether these plans would be approved and successfully implemented.
"There are material uncertainties as to whether these plans would be approved and be successfully implemented. If these are not successfully implemented, the Group and the Company may be unable to realise their assets and discharge their liabilities in the ordinary course of business.
"Accordingly, the financial statements may require adjustments relating to the recoverability and classification of recorded assets as well as additional amounts of liabilities and classification of liabilities.
"This indicates that a material uncertainty exists that may cast significant doubt on the Group’s and the Company’s ability to continue as going concerns," said Crowe.
Also serving as the basis for its disclaimer of opinion, the auditor said it had not been able to obtain bank confirmation replies on certain borrowings as well as sufficient appropriate audit evidence in the areas of trade payables, foreign exchange reserve, non-controlling interests, material financial information of two subsidiaries and intercompany balances.
These are serious disclaimers.
Since last year, one corporate character been tipping off on the problem of newbie corporate players churning out fake accounts to create false impression on sales, trade receivable and profit to enable issuance of new papers of shares or bonds.
Scomi is not a case of company suspected of creating fake account, but any other desperate company in a tight financial situation could resort to such action.
All these happening at the time the awaited EY review of Serba Dinamik's account did not happen and Bursa has suspended trading on the company. Serbadk is now suing both Bursa and EY. A legal tangled web in the making.
For Scomi, their financial situation is long known but their problem with auditors is only beginning. Wonder whether Scomi could deliver on their KTM deal.