KUALA LUMPUR (April 2): KNM Group Bhd, which was delisted last November, and its subsidiary KNM Process Systems Sdn Bhd have filed a lawsuit of over RM600 million against Tokyo Stock Exchange-listed NGK Insulators Ltd and two executives over the failed sale of its German unit, Deutsche KNM.
The suit sighted by The Edge revealed that NGK Insulators officially withdrew from its €270 million (RM1.26 billion) deal to buy Deutsche KNM, which owns Borsig GmbH, on Jan 29, 2026.
KNM alleges that NGK Insulators and its executives, Takashi Yamada and Yasushi Morinaga, engaged in tortious conduct that frustrated the sale which was crucial to the group’s restructuring efforts. The funds were needed to repay about RM1.37 billion in debt and support its financial recovery.
The group is seeking: RM363 million for alleged loss of listed company value and market capitalisation following the delisting; another €46.5 million linked to alleged bank and guarantee exposures to German syndicated lenders; and RM42.693 million to KNM Process Systems for wasted professional, legal, and transactional costs incurred.
KNM claims that NGK Insulators and its executives caused the deal to fail by adding new demands — like extra financial forecasts for financial year 2026 to financial year 2028 — just before the Nov 26, 2025 deadline.
The group said these actions delayed the deal and prevented it from being completed, hurting its restructuring plans. It is holding NGK Insulators liable to the tort of inducing breach of contract, unlawful interference in trade and business and conspiracy to injure by unlawful means.
The group claimed that KNM took steps, including withdrawing a regulatory appeal and delisting from Bursa Malaysia on Nov 5, 2025, to facilitate the deal. Prior to the filing of the suit, KNM also sent NGK Insulators a demand letter. It proceeded to file the suit when NGK Insulators didn’t respond.
The suit by KNM and KNM Process Systems was filed by their solicitor Messrs Jeeva Partnership at the High Court on March 31.
Since the lawsuit is against a foreign company, KNM and its subsidiary need the High Court’s permission to send legal papers to Japan.
KNM’s Borsig struggles and delisting
KNM has struggled to sell Borsig, an asset it acquired in 2008 for €350 million, since 2022.
Borsig was supposed to be sold to Vorsprung Industries for €220.8 million in 2022, but the sale deadline was missed. KNM then planned an initial public offering in Singapore aiming for a market value of up to US$300 million (RM1.21 billion), which also didn’t happen.
Financially distressed and classified as a Practice Note 17 company in October 2022, KNM planned to sell its German unit, DKNM, to NGK Insulators for €270 million in February 2026 to raise funds. However, Bursa rejected KNM’s restructuring plan in October 2025 due to weak Malaysian operations.
KNM and its single largest shareholder, MAA Group Bhd (KL:MAA), initially planned to appeal but dropped it, as the required process for the shareholders' approval needed for the sale would have delayed the deal. MAA tried to push ahead with the shareholders’ meeting to approve the sale regardless of the regulator’s disapproval, but Bursa took rare legal action to stop it, forcing KNM to postpone the meeting until after delisting.
KNM was delisted on Nov 5, 2025, and shareholders approved the sale of DKNM on Nov 6.
On Nov 27, KNM said its €270 million sale of DKNM to Japan’s NGK Insulators missed the Nov 26, 2025 deadline. KNM added, however, that the sale agreement was still valid, and NGK Insulators had not formally withdrawn its offer.