Bursa Malaysia Securities (Bursa Securities) said it initiated a suit against soon-to-be-delisted KNM Group Bhd and its major shareholder MAA Group Bhd to “protect market integrity”.
It filed an originating summons on Monday seeking to prevent the convening of an extraordinary general meeting (EGM) to deliberate on the proposed disposal of KNM’s German subsidiary Deutsche KNM GmbH (DKNM).
It said the legal action was initiated due to concerns over the manner in which the resolution on the disposal was proposed by MAA, which had called for the EGM to be held on Oct 30.
“Bursa Securities is of the view that the resolution does not comply with the disclosure and approval requirements under the Main Market Listing Requirements, including the necessary clearance from Bursa Securities.”
The exchange regulator stated it remains committed to ensuring “transparency, fairness, and investor protection” in all its regulatory actions.
“The integrity of the capital market is paramount, and Bursa Securities will continue to take all necessary steps to uphold public confidence and maintain orderly market operations,” it said in a statement.
MAA is KNM’s largest shareholder with a 19.37% stake, and is helmed by Tunku Yaacob Khyra, a member of the Negeri Sembilan royal family. He is chairman of both MAA and KNM.
MAA is pushing for shareholders to approve the proposal to sell KNM’s crown jewel – DKNM’s subsidiary Borsig GmbH – to Japan’s NGK Insulators for 270 million euros (RM1.32 billion).
The cash-strapped oil and gas services provider is relying on the disposal to cut about RM1 billion in debt and free up RM100 million in working capital.
EGM to proceed as scheduled
Meanwhile, Bursa Securities’ suit came up for hearing at the Kuala Lumpur High Court yesterday. However, its move to get an order to block the EGM appears to have become largely academic.
“The High Court directed the defendants to file affidavits in reply but did not grant any order to prevent the company’s EGM scheduled to be held on Oct 30.
“Consequent to the above, the EGM will proceed as scheduled,” said KNM in a bourse filing yesterday. The court has fixed the next hearing on Nov 19.
KNM also said the court was informed that the EGM chairman will propose to shareholders to adjourn the meeting to Nov 6 by which time KNM would have been delisted.
Bursa Securities’ suit follows its Oct 23 warning to MAA to not hold a vote on the proposed DKNM sale without adhering to listing rules.
The warning prompted KNM to withdraw its appeal against the regulator’s decision to reject its regularisation plan to exit its Practice Note 17 status, paving the way for its delisting on Nov 5.
Its shares have been suspended since Oct 13, with the stock at half a sen, valuing the company at RM20.2 million.
