This article first appeared in The Edge Malaysia Weekly on August 10, 2026 - August 16, 2026

After 1MDB, the biggest accounting fraud in Malaysia involved Sarawak-based oil and gas company Serba Dinamik Holdings Bhd.

A market darling for many years because of its growth story, Serba Dinamik ran into trouble in 2021 when a public fallout erupted with its external auditor KPMG. The Big Four audit firm, perhaps having learnt from its 1MDB saga, reported its concerns over Serba’s accounts to the Securities Commission Malaysia (SC). This led to an SC raid on Serba’s offices, where many documents were seized.

A defiant and outraged Serba held a press conference condemning KPMG’s actions and alleging that the audit firm had overreacted.

As it turned out, SC uncovered accounting fraud and, in December 2021, Serba and several of its top executives were charged with committing massive fraud involving false revenue statements.

The charges were withdrawn by the Attorney General’s Chambers in April 2022, in what was widely believed to be the result of political intervention. The parties involved were instead fined a total of RM16 million.

While these top executives got off with a slap on the wrist, the mess they left behind is still there. Lenders who are owed billions have moved to liquidate the company. At the same time, investors who bought its debt papers are suing parties they allege were responsible alongside Serba to recover their losses.

Interestingly, one of the suits now before the court is one in which Serba’s liquidator is suing KPMG, alleging negligence in its audit of the accounts from 2016 to 2019, before KPMG reported its concerns over Serba’s accounts to SC in 2021.

While the merits of the suit have yet to be argued in court, one question remains for the liquidator: Why is he not suing the directors and executives involved? After all, they admitted guilt by paying RM16 million in fines to SC.

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