Lee Swee Eng, CEO and Director of KNM Group Berhad, has been charged with insider trading involving nearly 31 million units of KNM shares between February and April 2010, according to claims made by the Securities Commission of Malaysia.
The commission alleges that Lee Swee Eng took advantage of inflated share prices while knowing that an announced deal would not be completed. By doing so, he reportedly avoided a loss of approximately RM 3.6 million, a substantial sum that came at the expense of other shareholders.
This latest development is tied to prior reprimands and fines issued to KNM’s Board of Directors. Bursa Malaysia Securities Berhad had previously taken action against the company, publicly reprimanding KNM Group Berhad for breaching the Main Market Listing Requirements. Additionally, Bursa Malaysia fined eight KNM directors, including Lee Swee Eng and his wife Gan Siew Liat (current Executive Director), a total of RM200,000 for their involvement in the incident that Lee Swee Eng allegedly profited from.
The case against Lee Swee Eng appears strong, given the evidence and Bursa Malaysia Securities Berhad’s determination. The trial is currently scheduled for May 22, 2021. Legal experts suggest it will be challenging for Lee Swee Eng to defend himself against these charges, especially considering the prior reprimands and fines.
Shareholders are raising concerns about why Lee Swee Eng and his wife Gan Siew Liat, who supported his efforts, are still allowed to participate in KNM’s business. This question is expected to be a significant point of discussion at the upcoming Annual General Meeting (AGM).
The case highlights the need for stronger corporate governance and raises questions about the effectiveness of previous penalties in deterring misconduct. As the trial approaches, investors and industry observers will be watching closely to see how this case impacts KNM Group and the broader Malaysian corporate landscape.
