SHAREHOLDERS of KNM Group Bhd which is in the midst of a boardroom tussle have questioned why the incumbent board of directors for not staging a physical extraordinary general meeting (EGM) meeting but deciding instead to hold a virtual meeting.
Shareholders who strongly oppose the staging of a virtual meeting and insist that the KNM board “tweaked the meeting platform” claimed that a physical meeting would be a fairer choice to all parties in that it could prevent potential instances of abuse of power by current directors.
In a Bursa Malaysia filing on Monday (Sept 18), the international oil & gas (O&G) service provider has announced that it would convene “a fully virtual” EGM with electronic voting (RPEV) facilities at 10am on Oct 16.
The EGM entails 16 resolutions which encompass the removal of nine directors who included company chairman Tunku Datuk Yaacob Khyra and KNM’s group CEO Ravindrasingham Balasingham.
The other directors include Tan Sri Zulhasnan Rafique, Yee Hong Ho, Steve Ho Soo Woon, Thulasy Suppiah, Datuk Uwe Ahrens, James Beltran and Datuk lndera Naresh Mohan.
To replace Tunku Yaacob, the EGM slated for Oct 16 has proposed that Tunku Kamariah Aminah Maimunah lskandariah Sultan Iskandar (eldest sister of Johor ruler Sultan Ibrahim and future Yang d-Pertuan Agong) be made the group’s new chairman.
Others potential appointees include former executive director Flavio Porro, German billionaire Andreas Heeschen, Datuk Abd. Ghani Yusof, Edwin Silvester Das, Datuk Zaidi Mat Isa @ Hashim and William H Van Vliet III.
The opposing shareholders are requesting market regulators, namely Bursa Malaysia and Securities Commission Malaysia (SC) to intervene and instruct KNM’s board to hold a physical meeting for the EGM instead.
According to individuals familiar with the workings of listed company meetings, the then COVID-19 pandemic and movement control order (MCO) did necessitate social distancing, leading the authorities to require listed companies to conduct virtual meetings to facilitate both annual general meetings (AGMs) and special shareholders’ meetings.
“But with the COVID-19 pandemic having subsided and the need for social distancing has been lifted, holding physical meetings and conducting physical voting is the right approach,” one market observer who is familiar with dealings of KNM shares pointed out.
The source further pointed out that in the past, several listed companies such as SC Estate Builder Bhd which encountered a similar hostile takeover had held virtual meetings but only to end up in a situation where individuals with ill intent manipulated voting and registration of shareholders’ votes.
“As the result, the company, its directors and shareholders ended out going in and out of endless court battles to fight for justice which could be prevented by a simple physical meeting,” opined the market observer who spoke on condition of anonymity.
“In a virtual meeting, any incumbent board can instruct the illegal registration of shareholders who did not attend the special shareholders’ meeting, thus enabling them to cast illegal votes without any proper means of scrutiny. Such foul play could occur during a hostile takeover of a listed company.”
He added: “But in a physical meeting, opposing shareholders have the right to appoint scrutineers to verify the authenticity of all proxy forms.
“Moreover, there have been instances during virtual hostile takeover EGMs when the incumbent board of directors can intentionally make it difficult for the hostile shareholders to log in and cast electronic votes, hence ultimately leading to legal disputes”.
At 9.12am, KNM was unchanged at 12 sen with 2.05 million shares traded, thus valuing the company at RM486 mil – Sept 20, 2023
