In a rare advisory issued today, it said MAA – a major shareholder of KNM – is bound by the same Main Market Listing Requirements as KNM’s directors in convening the said EGM.
“Failure to comply by MAA may constitute a breach of the Companies Act, the listing requirements, the Capital Markets and Services Act 2007 (CMSA) and including the undertakings issued by the directors of KNM to Bursa Securities they will comply with the listing requirements,” it said.
The stock exchange regulator emphasised that its statutory duty under the CMSA is to ensure compliance with the listing requirements.
KNM had rejected a request from MAA early this month to hold an EGM to approve the sale of its entire stake in Deutsche KNM GmbH (DKNM) to Japan’s NGK Insulators for €270 million (RM1.32 billion), citing the need to comply with rules governing Practice Note 17 (PN17) companies.
However, MAA then informed KNM it will proceed with calling the EGM under Section 313 of the Companies Act 2016 and has issued a notice to shareholders to vote on the proposed DKNM sale on Oct 30.
The cash strapped PN17 oil and gas services provider is relying on the sale of DKNM – which owns the group’s crown jewel Borsig GmbH – to cut about RM1 billion in debt and free up RM100 million in working capital.
MAA is led by KNM’s largest shareholder Tunku Yaacob Khyra, a member of the Negeri Sembilan royal family, who holds a 19.37% stake.
Bursa Securities said it considers the proposed DKNM sale as “a major disposal”, which requires the appointment of a main adviser and an independent adviser, a valuation of DKNM, and sending a detailed circular to shareholders that has to be reviewed by the regulator.
It said it has yet to receive any circular or relevant documents from MAA or its advisers on the DKNM disposal, as required under the listing requirements.
“Bursa Securities will continue to monitor developments and will not hesitate to take appropriate action in the event of any breach of the Main (Market) listing rules,” it added.
KNM’s shares have been suspended from trading since Oct 13 after the regulator rejected its regularisation plan, saying the company failed to show it could sustain its business.
The stock was also slated to be delisted by Nov 5 but KNM staved this off by appealing the decision on Oct 7.
As part of its appeal, KNM submitted a proposal seeking Bursa Securities’ approval to proceed with the DKNM disposal. The regulator has yet to decide on the appeal.