This article first appeared in The Edge Malaysia Weekly on November 3, 2025 - November 9, 2025

THIS Tuesday is set to be KNM Group Bhd’s (KL:KNM) last day as a publicly traded company, as it is likely to be delisted the following day after a little more than 22 years since its flotation exercise on Aug 11, 2003.

What is raising eyebrows is the manner in which KNM is being taken off Bursa Malaysia, because there appears to be some amount of hostility as the company’s non-independent, non-executive chairman Tunku Datuk Yaacob Khyra and the regulator lock horns.

Yaacob’s flagship MAA Group Bhd (KL:MAA), where he is executive chairman, has 19.37% equity interest or 783.54 million shares in KNM, making the insurer the largest shareholder of the oil and gas engineering company, which has been classified as a Practice Note 17 (PN17) company since Oct 31, 2022. Yaacob has a 41.81% stake in MAA.

KNM fell into the PN17 category a little more than a year after Yaacob’s MAA emerged as a substantial shareholder with 7.02% equity interest on Sept 2, 2021. Since then, Yaacob and the management have been fighting fires as KNM’s fortunes spiralled downwards.

KNM, which was a darling of the local bourse in its heyday, with its share price testing the RM7.40 band at end-December 2007, has seen the trading of its shares suspended since Oct 13. Its shares were last traded at 0.5 sen apiece on Oct 10, valuing the company at RM20.2 million.

“I think it was within one week of joining the KNM board, they defaulted on their Thai bond … To me it was [like], ‘You guys didn’t plan a refinancing?’,” Yaacob recalls.

For him, compared to the Thai bond issue back then, the task at hand has been much more challenging as it involved the sale of KNM’s crown jewel, the Berlin, Germany-headquartered Borsig GmbH, to Japan-based NGK Insulators Ltd for €270 million (RM1.26 billion), which was announced in February 2025. The sale is key as the proceeds will be used to settle the ailing company’s debts and inject RM100 million in working capital to revive KNM.

To put things in perspective, KNM suffered a net loss of RM84.82 million on RM1.38 million in revenue for the six months ended June 30, 2025 (1HFY2025). It incurred a finance cost of RM51.83 million during the period. In the previous corresponding period, the company incurred a net loss of RM79.21 million on RM3.16 million in revenue.

As at end-June this year, KNM had cash and cash equivalents of RM8.97 million. On the other side of the balance sheet, it had current liabilities of RM1.38 billion and no long-term debt commitments, while its accumulated losses stood at RM1.72 billion.

To cut a long story short, KNM is in dire need to slash its debts. A restructuring of the group that involves the sale of Borsig, the proceeds of which will be used to pare down borrowings, needs to be undertaken as quickly as possible.

However, in early October, Bursa Malaysia Securities rejected KNM’s proposed regularisation plan as its remaining Malaysian operations, which had chalked up revenue of RM6.44 million and RM1.38 million in FY2024 and 1HFY2025 respectively, and order book of RM2.83 million as at July 31, 2025, were deemed insufficient.

“There are concerns about the viability of the remaining continuing operations of KNM, whereby its revenue is insufficient to cover production overheads given that the remaining operations generated gross loss for FY2024 and 1HFY2025 respectively,” said Bursa Malaysia.

Furthermore, on Sept 1, 2025, Petroliam Nasional Bhd (Petronas) designated KNM as being non-compliant with its licensing conditions for the supply of products and services to exploration and oil and gas companies in Malaysia.

Following the rejection of the regularisation plan, Bursa Malaysia sought to delist KNM on Nov 5. On Oct 7, KNM appealed against the decision.

Interestingly, MAA, as a shareholder with more than 10% in KNM, on Oct 9 requisitioned for an extraordinary general meeting (EGM) to pass a special resolution on the sale of Borsig for €270 million. Borsig was acquired in 2008 for a total cash consideration of €350 million, or RM1.7 billion at the exchange rate back then.

However, KNM’s board of directors advised MAA that due to the regulatory requirements under the Main Market Listing Requirements of Bursa Malaysia, it would not be able to meet the timeline to convene the requested EGM. “As the company is currently in PN17 status, the board of KNM must strictly adhere to the Main Market Listing Requirements to mitigate any risks to the company’s listing status. Given these constraints, the board has decided that it will not be possible to convene the requested EGM,” it added.

Nevertheless, MAA decided to proceed with the convening of the EGM. KNM’s board said, “The board remains committed to acting in the best interests of the company and will continue to update shareholders as necessary.”

Then on Oct 27, KNM seemed to backtrack and withdrew the appeal against delisting, putting it on course to be removed from the local bourse on Nov 5.

KNM explained that the sale of Borsig was “critical to the group’s ongoing efforts to stabilise its financial position [and] as the company [will no longer be] a listed entity, the company is not bound to comply with the Listing Requirements of Bursa Securities and can then proceed with the necessary course of actions going forward”.

In another turn of events, Bursa on Oct 28 served KNM, MAA and a few other related entities with an originating summons to prevent the convening of an EGM at KNM to discuss or move the proposed special resolution concerning the proposed disposal of Borsig until the Main Market Listing Requirements have been complied with, meaning that a new business had to be sought by KNM as its Malaysian operations were deemed too small, with a hearing set for Oct 29.

On Oct 29, KNM announced that the High Court had directed the defendants (KNM, MAA and a few others) to file affidavits in reply but did not issue any order to prevent the EGM of the company scheduled to be held on Oct 30, which some say looked like a victory, albeit a small one for the beleaguered oil and gas engineering service provider.

The regulator said in a statement on Oct 29: “Bursa Securities has taken regulatory action to uphold market integrity by filing an originating summons in the High Court. 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.”

It also listed the requirements that the defendants needed to comply with.

Then on Oct 30, KNM announced that at the EGM, a motion to adjourn the meeting was duly passed by shareholders. The EGM was adjourned to 10.30am on Nov 6, a day after its delisting, meaning that KNM will no longer be under the purview of the stock exchange regulator.

Such a standoff between a company and the regulator is unprecedented in Corporate Malaysia, and the outcome remains to be seen.

Since 2012, there had been mentions of a sale of Borsig or a flotation exercise, but these plans to save KNM never materialised. Will it finally happen now and will KNM, as a private company, turn the corner? 

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