There are still many naive investors or gamblers who believe that the resignation of auditors (KPMG) is a good sign. It is a bad indicator to foreign fund houses that there is a crisis in Corporate Governance.

KPMG is a reputable firm and has been established since many years from a business combination of 4 different firms. KPMG is believed to have exercised professional judgment and carried out their fiduciary duties diligently and independently in accordance with ISA and MIA By-Laws.

Many people who are not within audit and accounting industries might think that it is easier to appoint another audit firm to carry out the audit and they are wrong.

Number of reasons:-
1) Professional Clearance letter which will be requested by the new auditors and issued by KPMG will give a very detailed and clear reason on why KPMG had tendered resignation although everyone should be aware of the reason of resignation;

2) Changes of Board of Directors especially Independent Directors during a short time period

3) Complexities of accounting issues and audit difficulties which had previously been highlighted by KPMG

4) Background of management if it involved special VIP or PEP.

5) Even if the new auditor accept the appointment, it will take time for the incoming auditor to complete the audit and reporting on timely basis because as the predecessor auditor resigned without issuing audit opinion, there will be an encouraged method to mitigate risk under ISA which is to re-audit the historical financial statements for the past 3 years.

6) Late filing and reporting of financial statements to SC will expose the Company to the risk of being listed to PN17 and subsequently delisted.

Good luck for those who are still holding the shares.

Disclaimer: This is not an advice to buy or to sell or to hold. This is just a sharing of my experience as an auditor for more than 10 years. Buy or Sell at your own risk and discretion.