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Malaysian firm Serba Dinamik's stock plunges for second day on audit issues

KUALA LUMPUR, June 1 (Reuters) - Shares in Malaysian oil and gas service provider Serba Dinamik slumped for a second straight day on Tuesday after its auditor questioned more than 3.5 billion ringgit ($850 million)in contracts and transactions .

The stock last traded at 89 sen, down 21%, bringing this week’s losses to 45%.

Serba Dinamik said on Friday in a filing with the stock exchange that KPMG had been unable to verify 11 transactions but added it did not see any issues with the legitimacy and existence of the contracts. It plans to hire an independent firm to conduct a review.

KPMG has not made a public statement on the matter.

Malaysia’s securities regulator has begun an investigation into Serba Dinamik and on Tuesday S&P downgraded Serba Dinamik’s long-term credit rating to B- from B+, saying the audit issues will complicate the company’s efforts to refinance nearly 1.7 billion ringgit in debt over the next 12 months.

“We believe Serba Dinamik may face difficulties accessing international and domestic capital markets, at least until the review’s resolution,” S&P said in a statement.

$1 = 4.1200 ringgit Reporting by A. Ananthalakshmi; Editing by Edwina Gibbs

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