MAA Group supports KNM’s current directors, to oppose new appointments in EGM

Friday 15 Nov 2024

KUALA LUMPUR (Oct 9): MAA Group Bhd, which holds an 8.55% equity stake in cash-strapped KNM Group Bhd, intends to vote in favour of retaining the current KNM directors, and is against the appointments of new candidates in KNM's extraordinary general meeting (EGM) scheduled to be held on Oct 16.

“MAA will vote to maintain the existing board of directors of KNM, and will vote against the appointments of the proposed candidates,” MAA said in a statement on Monday.

Meanwhile, MAA stands to keep Ravindrasingham Balasingham, better known as Ravi, as KNM's executive director (ED) and group chief executive officer.

“In the 11 months since leading KNM, the company has secured the confidence and support of creditors to ensure that the forthcoming court-convened creditors meeting will secure sufficient support for the scheme of arrangements (SOA) to be adopted," it said.

MAA expressed concerns over two proposed candidates — Flavio Porro and William Van Vliet II — who were previously seated on KNM’s board during the oil and gas engineering group’s financial distress.

“We also highlight that Porro, an Italian qualified lawyer, was one of the only two EDs of KNM, at the material time of the default of KNM’s Thai bonds of 2.78 billion baht (RM354 million) on Nov 18, 2021.

“The EDs should take full responsibility for their inability to manage the companies under their charge, and owe a fiduciary duty to always act in the best interest of the company,” it said.

It is worth noting that MAA is a flagship of KNM chairman Tunku Datuk Yaacob Khyra, whom the new substantial shareholder German billionaire Andreas Heeschen and a group of KNM shareholders want to remove.

On Sept 5, Heeschen with his 7.91% stake, acting with other KNM shareholders who represent a 10.68% stake in the group, proposed to unseat the current nine-member board.

The group sought to appoint Johor Princess Tunku Kamariah Aminah Maimunah lskandariah Sultan Iskandar to replace Yaacob, who has a 9.44% indirect stake.

Besides Yaacob, the group proposed to remove the rest of KNM’s board — namely directors Tan Sri Zulhasnan Rafique, Ravindrasingham Balasingham, Yee Hong Ho, Steve Ho Soo Woon, Thulasy Suppiah, Datuk Uwe Ahrens, James Beltran and Datuk Naresh Mohan.

Six new directors have been proposed to take over their posts, including Heeschen himself and Porro.

The others directors that Heeschen's group has proposed to be appointed include former chairman of Magna Prima Bhd and Komakcorp Bhd Datuk Abd Ghani Yusof; Edwin Silvester Das, who currently serves as Jiankun International Bhd's CEO; Datuk Zaidi Mat Isa @ Hashim, who is also SMTrack Bhd's ED; and Van Vliet, who is also CN Asia Corp Bhd's ED.

MAA raises other concerns

MAA also raised a red flag for Heeschen's candidacy to KNM's board, as he is currently the major shareholder of Heckler & Koch, a well-known firearms and weapons manufacturer since 2002, which comes with a controversial past.

“We note with grave concern that Heckler & Koch was accused in 2010 of paying bribes to Bundestag members of the German Parliament, in particular members from Angela Merkel's conservative Christian Democratic Union and her former coalition partners of the Free Democratic Party.

“The bribes were in relation to ensure that the government approved the sale of guns to Mexico. Increasing corruption within the security forces in Mexico and an ongoing war with drug cartels had by then caused the German government to get cold feet about selling weapons to the country,” claimed MAA.

KNM’s current management is set to have a meeting with its creditors over its SOA on Oct 12, and MAA opined that any change in the current management will be disruptive and potentially further destroy KNM's shareholder and creditor value.

“As shareholders of KNM, we strongly believe that the current team at KNM should remain unchanged. We are confident that the current management and board will be able to turn the company around through its strong relationship with creditors, staff and customers," it added.

Last Friday, Heeschen in a press conference said that his group plans to repay KNM’s RM1.2 billion debt owed to creditors in the next three to six months as they have identified business partners in Europe that want to provide long-term finance to KNM to replace the existing debt.

It is understood that the bulk of the RM1.2 billion KNM owes its creditors came from the Asian Development Bank's Credit Guarantee and Investment Facility and Danos Ltd.

At noon close on Monday, shares in KNM were down 2.5 sen or 14.71% to 14.5 sen, valuing the group at RM586.66 million. The stock has risen almost three times year-to-date.

Meanwhile, shares in MAA were unchanged at 34 sen, with a market capitalisation of RM89.67 million.

Edited ByIsabelle Francis

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