THE Minority Shareholder Watch Group (MSWG) is seeking an explanation from KNM Group Bhd at its forthcoming annual general meeting (AGM) with regard to the quantum of its employees share option scheme (ESOS) allocation.
This is given that the company’s executive vice chairman Gan Siew Liat and people connected to her had during FY2020 exercised 80 million ESOS shares that represented 87% of the total 91.976 million ESOS shares exercised in the year.
“In percentage, what is Gan, board members and other employee’s entitlement, for the ESOS shares with exercise price of 11 sen?” asked the share activism group. “Is there a cap on ESOS entitlement for KNM’s directors and persons connected to them under the existing ESOS?”
For the record, 91.98 million ESOS shares granted by the KNM Group were exercised in FY2020 at 11 sen/share.
KNM Group will stage its 19th AGM virtually on June 29 at 10am via the online meeting platform at https://web.lumiagm.com which is provided by Boardroom Share Registrars Sdn Bhd.
In a related development, MSWG also seeks clarification from KNM Group with regard to the closing balance dated March 27, 2019 for its ESOS grants totaling 95.28 million shares when the opening balance for the same grant on Jan 1, 2020 was 166.68 million shares.
“Why do these two numbers not tally?” asked the share activism group. “What is the vesting period imposed on the grantees before they could exercise the ESOS shares granted?”
At the company’s extraordinary general meeting (EGM) which follows its AGM, MSWG also queried KNM Group for placing out shares to interested placee(s) without any guarantee that the placee(s) has sufficient financial resources to take up the placement share.
“Is there a risk of the interested placee(s) fail to fulfill its obligation of taking up the placement shares?” asked MSWG.
“Why did the company not opt for a rights issue that enable all existing shareholders including the interested placee(s) to increase their equity stake further and to participate in the growth of the company without dilute their existing shareholdings?”
For the record, up to 50% or 493.76 million of the total placement shares has been placed to its executive vice chairman Gan and/or person(s) connected with her as the interested placee(s) with the balance placement shares to be placed to independent placee(s).
The rationale of placing out the shares to the interested placee(s) is for the placee(s) to increase their collective equity participation in KNM as well as lending out their financial support to the group.
However, as at latest practicable date of May 21 this year, the interested placee(s) has yet to confirm that they have sufficient financial resources to subscribe to the placement shares allocated to them.
As of April 22 this year, Gan is also the substantial shareholder of KNM Group with 1.19% direct interest and 8.52% indirect interest in the company. – June 27, 2021
