KNM Group Berhad’s subsidiary, Impress Ethanol Co., Ltd. (IEL), is embroiled in a financial scandal involving a THB2.7 billion (approximately RM350 million) bond issue. This crisis has exposed significant management issues within the company, particularly involving Executive Co-chairman Gan Siew Liat and her family members.
According to the latest financial reports, despite Thailand’s flourishing ethanol industry, IEL has reported losses exceeding RM20 million in the most recent period. The THB2.7 billion bond, issued and guaranteed by KNM Group Berhad (which owns 72% of IEL), was intended to fund a Phase 2 facility expansion. However, sources close to the situation report that little to no progress has been made on the construction, with most equipment either unprocured or left to deteriorate in storage.
Adding to the controversy, Gan Siew Liat appointed her daughter, Sara Lee Mei Ching, as Managing Director of IEL. Sara Lee, a recent hospitality graduate with no relevant experience in chemical engineering or construction, was granted 30 million ESOS shares by her mother, despite IEL’s poor performance.
This appointment has raised serious questions about corporate governance and nepotism within KNM Group. Shareholders and industry observers are particularly concerned about the lack of qualified leadership for a potentially hazardous ethanol production facility.
The upcoming Annual General Meeting (AGM) scheduled for June 29, 2021, followed immediately by an Extraordinary General Meeting (EGM), is expected to be a pivotal moment for KNM Group. Shareholders will vote on the reappointment of directors and a proposed private placement that could dilute existing shareholdings by up to 30%.
Reports suggest that non-controlling shareholders are mobilizing to challenge the Lee family’s control over the group. The meetings may see record attendance as shareholders seek to address these governance issues and financial concerns.
Interested shareholders are encouraged to register for the AGM and EGM by June 25, 2021, through the independent organization boardroomlimited.my.
