Listing Circular
06/10/2011BURSA MALAYSIA REPRIMANDS KNM GROUP AND FINES EIGHT DIRECTORS A TOTAL OF RM200,000
KNM GROUP BERHAD |
LISTING'S CIRCULAR NO. L/Q : 62712 OF 2011
Bursa Malaysia Securities Berhad ("Bursa Securities") has publicly reprimanded KNM Group Berhad ("KNM" or "the Company") for breach of the Main Market Listing Requirements ("Main LR"), and publicly reprimanded and fined its directors a total of RM200,000.
Bursa Securities publicly reprimanded KNM for breach of paragraphs 9.16(1)(a) and (c)(i) of the Main LR in respect of KNMs announcement, dated 4 February 2010, of an offer to buy the business and undertakings of the Company. The announcement was not factual, unclear, inaccurate and lacked sufficient information and material facts to enable investors to make informed investment decisions.
The following directors of KNM were found to be in breach of paragraph 16.13(b) of the Main LR for permitting, knowingly or where they had reasonable means of obtaining such knowledge, KNM to commit the breach and the penalties imposed are as follows:-
No. | Director | Penalty |
1. | Lee Swee Eng Managing Director | Public Reprimand & Fine of RM25,000 |
2. | Gan Siew Liat Executive Director | Public Reprimand & Fine of RM25,000 |
3. | Chew Fook Sin Executive Director | Public Reprimand & Fine of RM25,000 |
4. | Dato Mohamad Idris bin Mansor Independent Non-Executive Chairman (Resigned on 28 April 2010) | Public Reprimand & Fine of RM25,000 |
5. | Ng Boon Su Executive Director | Public Reprimand & Fine of RM25,000 |
6. | Lee Hui Leong Executive Director (Retired on 8 April 2010) | Public Reprimand & Fine of RM25,000 |
7. | Dato' Ab. Halim Bin Mohyiddin Independent Non-Executive Director | Public Reprimand & Fine of RM25,000 |
8. | Lim Yu Tey Independent Non-Executive Director | Public Reprimand & Fine of RM25,000 |
Bursa Securities views the above contravention seriously as it is the fundamental obligation of listed companies to ensure that all announcements made are factual, unambiguous, accurate, succinct, and contain material and sufficient information to allow investors to make informed investment decisions.
BACKGROUND
PUBLIC REPRIMAND ON KNM GROUP BERHAD
KNM had on 4 February 2010 announced that the Company had on even date received from BlueFire Capital Group Ltd ("Bidco"), an entity controlled by Ir. Lee Swee Eng, the Group Managing Director and major shareholder of KNM, a proposal to acquire the entire business and undertakings of KNM ("the Proposal"). The proposed price was equivalent to RM0.90 per issued ordinary share of KNM.
(a) The proposed acquisition will be fully settled by the issuance of redeemable convertible preference shares ("RCPS") in a new entity and the RCPS can be converted into non-voting ordinary shares in Bidco or redeemed for cash; and
(b) Bidco intended to include as one of the conditions precedent of the proposed acquisition that as of the day prior to or the day of KNMs extraordinary general meeting to consider and approve the proposed acquisition, there has not been:
- i any new shareholder holding 5% or more in KNM or existing shareholder increasing their shares by 5% or more; or
ii more than 10 new shareholders holding 1% or more in KNM shares, compared to at the day of announcement of the transaction by KNM,
The Conditions which formed an integral part of the Proposal were clearly of interest and material to shareholders and investors to enable them to make an informed decision regarding the Proposal. In particular, the Conditions were material as to, amongst others, the reasonableness of the offer and certainty of the acceptance by KNM of the Proposal. The announcement of the Proposal without stating the Conditions (particularly the new shareholder condition as stated in sub-paragraph (b) above which had or may have the effect of minimising the positivity / certainty of the Proposal) had resulted in a one-sided / unbalanced announcement.
It was also noted that KNMs share price and volume traded had increased following the announcement of the Proposal. KNMs share price had increased from RM0.75 to RM0.815 on 5 February 2010 and the volume traded on 5 February 2010 was 142 million (representing 3.5% of KNMs share capital) versus the past 5-day average of 15.9 million shares traded.
The Proposal subsequently lapsed on 14 April 2010.
PUBLIC REPRIMAND AND A TOTAL FINE OF RM200,000 IMPOSED ON EIGHT DIRECTORS
All the directors were in possession of and were aware of the Letter of Offer from Bidco dated 4 February 2010 and its contents. As such, they were or should have been aware of the Conditions.
However, Dato Mohamad Idris bin Mansor, Dato' Ab. Halim Bin Mohyiddin, Lim Yu Tey, Ng Boon Su and Lee Hui Leong had proceeded to approve the announcement on the Proposal on 4 February 2010 without ensuring / requiring full disclosure of the terms and in particular, the Conditions.
Announcement Info
Company Name | KNM GROUP BERHAD |
Stock Name | KNM |
Date Announced | 6 Oct 2011 |
Category | Listing Circular |
Reference No | ST-111006-60961 |