In a bourse filing yesterday, KNM said Bursa Securities had filed an originating summons in the Kuala Lumpur High Court against MAA Group Bhd, CIMSEC Nominees (Tempatan) Sdn Bhd, KNM and its subsidiary KNM Process Systems Sdn Bhd.
The regulator is seeking an order to prevent MAA and CIMSEC Nominees – the first and second defendants – from convening the EGM to discuss or move the proposed special resolution on DKNM’s disposal until Bursa’s Main Market Listing Requirements have been met.
MAA, KNM’s largest shareholder with a 19.37% stake, has called for the EGM to be held on Oct 30. MAA is led by Tunku Yaacob Khyra, a member of the Negeri Sembilan royal family.
MAA is pushing for shareholders to approve the proposal to sell KNM’s crown jewel – DKNM’s subsidiary Borsig GmbH – to Japan’s NGK Insulators for 270 million euros (RM1.32 billion).
The cash-strapped PN17 oil and gas services provider is relying on the disposal to cut about RM1 billion in debt and free up RM100 million in working capital.
Bursa Securities’ suit will be heard on Oct 29, a day before the scheduled EGM. The legal action comes after it warned MAA on Oct 23 that holding a shareholder vote on the DKNM disposal would breach listing rules.
The regulator considers the proposed DKNM sale “a major disposal”, requiring 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.
“Bursa Securities will not hesitate to take appropriate action in the event of any breach of the Main (Market) listing requirements,” it warned in a rare “regulatory advisory”.
KNM’s shares have been suspended from trading since Oct 13 after Bursa Securities rejected its regularisation plan, saying the company failed to show it could sustain its business.
The stock was slated to be delisted on Nov 5 but KNM staved this off by appealing the decision on Oct 7.
In an unexpected move, KNM announced on Monday it will give up its listing status to facilitate the disposal of DKNM, which it claimed is critical to its turnaround.
It added that the withdrawal was necessary as the timeframe of regulatory processes involved in pursuing the appeal could potentially jeopardise the completion of the sale.
KNM said its shares will be delisted on Nov 5.