Someone asked for my opinion yesterday about Rocky's posting on the fight between Malaysian company Serba Dinamik and global accounting firm KPMG.
First I have to say that I hardly write about corporate stuff because I'm not of that world.
I don't like the corporate world and in fact I don't really like most corporate people because of their profit driven attitude.
"All I care about is the bottom line. I couldn't care less about your campfire stories."...one of them told me once. Urgh. What an arrogant prick.
Okay. Enough of that and back to this Serba Dinamik (SD) versus KPMG case, which Rocky found to be so interesting to write about.
I will try to make it as simple and easy to understand as possible.
The way I see it, it's a case of a bunch of arrogant (in this case most likely young) pricks backed by the name of their all powerful international firm who think they can bully their lesser equals from a local company.
I suspect the fact that SD is a bumiputera owned and run company also contributed to the inflated ego of the KPMG boys and girls who were assigned to handle its accounts.
It's a known fact that among corporate people, bumiputera companies are not as highly regarded as others. Of course they don't say it, but such a racist mindset does exist in the supposedly "bottom line is all that matter" corporate world.
Anyway, do bear in mind that what basically happened was that SD actually engaged KPMG to handle its account. KPMG then found something that it deemed not right and reported it to Securities Commission causing SD's shares to suffer thus prompting SD to want to sue because KPMG didn't even bother to discuss the matter with it before lodging the report.
It's like you hiring someone to check on whether your cooking is good and that person think you didn't put enough salt in it. Instead of telling you of the need to put more salt, that person went straight to your mother-in-law and told her that you were a lousy cook leading to the whole village thinking you were not only a bad cook but also a cheating wife. Well, you know lah how people's mouths are.
To understand why the KPMG boys and girls ended up doing that, we need to see how these supposedly reputable and mighty global firms work when it got a puny (Rocky's word) local company as a client.
They would assigned a bunch of inexperienced junior executives (most are probably fresh grads) to handle the assignment. It's after all just a puny bumiputera company's account.
But mind you, despite being green and none the wiser, these cikus have the same mentality as their seniors of looking down at companies such as SD. Hey, they are from KPMG what, one of the Big Four, or is it now the Big Three....whatever.
That attitude is what I believe that led them to report to the regulator without bothering to discuss the perceived problems with SD.
SD has said that the problem reported by the KPMG cikus could have been simply rectified if it was discussed. Well, too late, damage done already as SD's shares had went down like crazy because of the report.
Personally, I don't have much sympathy for SD per se, as they were foolish enough to buy into the hype over KPMG being among the Big Four as the best for the job of handling its account. They should have just hired a bunch of good local accountants at very very much lower price to do it with equal or even better results.
Why I bothered to write about it is because the majority of actual SD shareholders are normal people and in a way that includes me. Hey EPF money is in there, okay, so that means my money is also there.
Anyway, it's good that SD is taking KPMG to court as this may not only help to reverse the dropping of its shares but also possibly change things for the better in the corporate world.
Maybe, it would make the corporate boys and girls realise that they are living under the hyped impression that they are always superior than others, the very same attitude of those KPMG pricks when they dealt with the SD account.
Hopefully, this whole thing will really get to court and become very public instead of being shelved after another round of corporate wheelings and dealings.
make it a racial issue like usual. still same same after all this years. change your maxim from 诚正 to 虚伪 la.ReplyDelete
I like the word Young Prick.ReplyDelete
Good metaphorical description.ReplyDelete
You think and act like a racist. Figures are color blind.ReplyDelete
Saya petik dari blog Dato' Ahiruddin...ReplyDelete
"I think it's time for corporations to fight back. For too long, they have abused their positions. Some have even held companies to ransom. Good time for the Big Four to burn."
Something smells fishy here? Wht is going on?ReplyDelete
Auditors/Accountants are humans too just like the FROGGY MPs.. jumping from ponds to ponds.
Otherwise masakn PH, within such short term in power was able to swiftly sell off macam segala harta such as IHH, Tabung Haji, Boustead etc etc etc etc etc
Professor Nasi Lemak
Always follow your blog but first time comment, tak boleh tahan. Aiyoyo, such straight forward accounting nonconformance issues, you can turn it into racial issue. What else you can't do? If you want, you can be a highly successful politician.ReplyDelete
Our company too have experienced disagreements with our auditors ( Top 7 as our foreign investors demand international firms)and mainly because the team sent to clients' offices are pure audit boys and girls and are not in position to understand legal agreements to determine if investors' investment is deemed loan or capital ( just an example). The matter was resolved after the partner stepped in as there is no way we can convinced an "inexperienced" audit manager, besides the suggestion that they step down .ReplyDelete
As for SD, I think the biggest issue is the over RM4B recievables, as it is now more than the market cap of SD. On top of that , SD itself is a shareholder of the JV company that owes most of the receivables.How it becomes a shareholder after been awarded the contract is not fully explained in details and how this JV company is going to pay SD for works done. The other shareholder is a local there and obviously, if one follows the 1MDB case, it will ring a bell in every auditor in Msia. Every auditor is worried of the next 1MDB or even Transmile. All stakeholders are eagerly waiting for EY's independant report but may take months. The best SD could do now is to collect these receivables in next few months and show the investors that its explanations to KPMG are genuine.
some transaction nature may not hv clear classification, for eg capital vs revenue expenditure, the inexperienced audit manager might hv valid justification to disagree with auditee treatment, however most of the time, its the partner that have the final say because he is one that sign off the acct, n he bear the consequences of risk. thus the experience is more on risk assessment rather than the acct or audit knowledge in many cases.Delete
the boys n girls, which some here label as young prick work 18 hours a day during peak, n 22 hours a day if deadline is less than 10 days especially japs co, would be more happy if their superior are always tidak apa so that they can complete the audit n take a good sleep, anyone with some knowledge of audit knows its the partner, or kpmg top mgt that doubt sd numbers.
and this is not a classification or treatment issue, its a matter of existence, for eg if you tell the auditor yr asset is a 20 storey building in bukit bintang, the auditor might request u to show him the building does exist, n further prove u r the legitimate owner, u cant simply show him pavilion residence in raja chulan n tell auditor case can close (just an example).
the interesting part is all we read from the very beginning till now is mostly from sd side while kpmg is very quiet, kpmg concern, i guess, is petronas, a not that puny bumi co, n of course malay warriors like rocky n annie.
just let the lawsuit does the job and the judge to decide based on facts and evidence. as at now, we wouldnt know which side is telling the truth. SD vs KPMG, welcome to corporate malaysia.ReplyDelete
EPF was a majority shareholders SD. They sit in the board of SD and have inside info to SD account. If they are smart enough to reduce their shares holding who do you think telling is telling the truth. Suing the auditor is just side show. EPF knows the truth and they have sold down. So don't be stupid and follow epf.ReplyDelete
If you are a bodyguard and saw your employer kills somebody. Do you keep quite and coverup or go to authority. Fikir lah. Any profession have code of ethics.. auditors are bound to report to regulatorReplyDelete