KUALA LUMPUR: Practice Note 17 company KNM Group Bhd's chief executive officer and managing director Ravindrasingham Balasingham today (September 8) made a public appeal to shareholders of the company to back the current set of board directors and management amid an attempt by a group of shareholders, including German billionaire Andreas Heeschen, to replace the entire board with a new one.
Heeschen and eight other shareholders who own more than 10 per cent of KNM Group on September 5, 2023, asked for an extraordinary general meeting (EGM) to be convened to remove the entire board, which includes MAA Group Bhd's executive chairman Tunku Yaacob Khyra, and appoint seven new directors to the board of the company.
Among notable names to be appointed on to the new board include Jiankun International Bhd CEO Edwin Silvester Das, former chairman of Magna Prima Bhd Datuk Abd Ghani Yusof and CN Asia Corp Bhd executive director William H Van Vliet II.
The notice for EGM must be sent within 14 days of the requisition notice and held not more than 28 days from the day the notice of EGM is sent.
Ravindrasingham's principal argument against the change is that the move to replace the current board and management, which has earned the confidence of a majority of the creditors, could derail the company's plans to secure an extension to its restraining order in place to stop creditors from calling on its loans.
The company is up for an-interim restraining order court hearing on September 20, 2023.
"The potential plan to replace the current board of directors and management of KNM Group, could impact the court's decision solely because this creates doubt on the current draft scheme of arrangement and as previously occurred, lead to another postponement of decision on this restraining order by the court, until after the requisitioned EGM," Ravindrasingham said.
He said the current board of directors and management feel that with the support of majority of the RM1.167 billion external creditors, there is a shared vision of KNM Group to pare down the debt in an orderly monetization exercise whilst simultaneously achieving a restructured KNM Group with a sustainably profitable future for the shareholders is achievable.
For the twelve months ended June 30, 2023, KNM Group posted a net loss of RM157.06 million on RM1.07 billion revenue.
The group has two months to submit its regularisation plan under the PN17 of the Main Market Listing requirements to the relevant authorities for approval.
It is considering selling, or listing on a stock exchange, its prized asset, Borsig GmbH, after a deal to sell its stake for Euro 220.8 million (RM1.03 billion) to Vorsprung Industries GmbH fell through last November due to financing issues.
"More immediately, under the professional leadership of Tunku Yaacob as its chairman, the current management have been instructed to do its utmost to defend and uphold the best interest of all stakeholders even if it warrants that the matter be taken to court. Given the issues highlighted, we are in discussion with our lawyers, advisors, and forensic specialists on the appropriate course of action," Ravindrasingham added in a statement released to media today.