Legal Action Taken to Protect Market Integrity
PETALING JAYA: Bursa Malaysia Securities (Bursa Securities) has taken legal action against KNM Group Bhd and its major shareholder, MAA Group Bhd, to safeguard the integrity of the market. The move comes as part of efforts to ensure that all regulatory requirements are met during the process of delisting.
The legal action was initiated through an originating summons on Monday, aiming to prevent the convening of an extraordinary general meeting (EGM). This EGM was set to discuss the proposed disposal of KNM’s German subsidiary, Deutsche KNM GmbH (DKNM).
Bursa Securities expressed concerns over the manner in which the resolution for the disposal was proposed by MAA. The company had called for the EGM to be held on October 30. According to Bursa Securities, the resolution does not comply with the disclosure and approval requirements under the Main Market Listing Requirements. It emphasized the need for necessary clearance from Bursa Securities before proceeding.
The exchange regulator reiterated its commitment to ensuring transparency, fairness, and investor protection in all its regulatory actions. It stated that the integrity of the capital market is crucial, and it will continue to take all necessary steps to uphold public confidence and maintain orderly market operations.
Key Players and Their Roles
MAA, the largest shareholder of KNM, holds a 19.37% stake in the company. It is led by Tunku Yaacob Khyra, a member of the Negeri Sembilan royal family. He serves as the chairman of both MAA and KNM.
MAA is pushing for shareholders to approve the proposal to sell KNM’s crown jewel – Borsig GmbH, a subsidiary of DKNM – to Japan’s NGK Insulators for €270 million (RM1.32 billion). This sale is expected to help the cash-strapped oil and gas services provider reduce about RM1 billion in debt and free up RM100 million in working capital.
EGM Proceeds as Scheduled
Despite Bursa Securities’ legal action, the EGM is set to proceed as scheduled. The suit was heard at the Kuala Lumpur High Court, but the court did not grant any order to prevent the EGM. Instead, it directed the defendants to file affidavits in reply.
KNM confirmed in a bourse filing that the EGM will proceed as planned. The court has fixed the next hearing on November 19, 2025. Additionally, the EGM chairman is expected to propose to shareholders that the meeting be adjourned to November 6, 2025, by which time KNM would have been delisted.
Regulatory Concerns and Company Response
Bursa Securities’ legal action follows its warning on October 23 to MAA to avoid holding a vote on the proposed DKNM sale without adhering to listing rules. This warning prompted KNM to withdraw its appeal against the regulator’s decision to reject its regularisation plan to exit its Practice Note 17 (PN7) status. This decision paved the way for its delisting on November 5.
KNM’s shares have been suspended since October 13, with the stock trading at half a sen. This valuation places the company at RM20.2 million. The company's financial challenges have made the proposed sale of DKNM a critical step in its restructuring efforts.