KUALA LUMPUR (Nov 21): Cash-strapped KNM Group Bhd has defended the board's decision to reappoint Ho Soo Woon as an independent and non-executive director, saying the move would be beneficial to the group.
Ho, 60, was reappointed to the board on Nov 3, after he left the group as an independent and non-executive director less than a month ago, after a resolution on his removal was duly passed by way of poll at an extraordinary general meeting.
In a filing to Bursa Malaysia on Tuesday, KNM said the decision to reappoint Ho was made as he is still the court appointed director and as such will continue in that capacity.
Ho, it added, has also been involved in various aspects of the KNM’s corporate monetisation activities as the senior non-executive director "and is therefore integral to the Borsig GmbH’s initial public offering process and other asset monetisation corporate exercises undertaken by the group”.
KNM said the appointment of Ho aligns with the High Court order in December last year, mandating Ho or his nominee to act as the chairman of the court convened meetings.
The group also referred to the letter to the schemed creditors on Oct 11 in relation to the draft terms of the proposed scheme of arrangement for the next court convened meeting of the group.
The letter had, among others, stated that in the event of any changes in the board of directors — excluding by reason of natural death — any scheme creditor may issue a notice to KNM to terminate the proposed scheme of arrangement with immediate effect.
Upon the termination of the arrangement, all scheme creditors will be discharged from all obligations or restrictions under the agreement, including any restriction on creditors' ability to commence and continue legal proceedings against KNM and the proposed waiver, while the creditors’ original claims against the group shall be reinstated in full.
KNM has appealed against a High Court decision to dismiss its application to extend the restraining order against its scheme creditors earlier this month. The group had secured the restraining order on Dec 15, 2022, and it was later extended to Aug 14, 2023, concurrent with its court application to conduct meetings to consider a proposed scheme of arrangement.
On Tuesday, KNM's shares closed unchanged at nine sen, with a market capitalisation of RM364.13 million. Since the beginning of the year, the counter has risen 80%.