Court documents obtained from the public record in case number WA-22NCC-169-04/2020, KNM Group Berhad CEO and Director Lee Swee Eng has been charged with trading 31,375,500 UNITS of KNM shares as an Insider from Feb to April of 2010.  

Securities Commission Malaysia claims that Lee Swee Eng avoided a loss of RM 3,667,858.00 by selling at an inflated price while knowing information that would have lowered the value of those shares.

Shareholders who purchased shares of KNM at the time may be entitled to damages from Lee Swee Eng.

These charges follow actions taken by Bursa Malaysia Securities Berhad who has publicly reprimanded KNM Group Berhad for breach of the Main Market Listing Requirements (“Main LR”), and publicly reprimanded and fined its directors a total of RM200,000.

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: –

  1. Lee Swee Eng, Managing Director, Public Reprimand, Fine of RM25,000
  2. Gan Siew Liat, Executive Director and Wife, Public Reprimand, Fine of RM25,000
  3. Chew Fook Sin, Executive Director & Brother-in-Law, 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, Treasurer, Public Reprimand, Fine of RM25,000
  6. Lee Hui Leong, Executive Director, Public Reprimand, Fine of RM25,000
  7. Dato’ Ab. Halim Bin Mohyiddin, Independent Non-Executive Director, Public Reprimand and Fine of RM25,000
  8. Lim Yu Tey, Independent Non-Executive Director, Public Reprimand, Fine of RM25,000

Court documents state that penalties for Lee Swee Eng should be but are not limited to:

  1. A declaration that the defendant engaged in prohibited conduct
  2. A Fine sum of RM 11,003,574.00
  3. A civil penalty of RM 1,000,000
  4. An order baring Lee Swee Eng from dealing in securities for a period of 5 years
  5. An order restraining Lee Swee Eng from being a Director of any public company for a period of 5 years

Given the determination of Bursa Malaysia Securities Berhad and prior penalties imposed on Lee Swee Eng and the other Directors, it will be hard for him to defend against the facts in this matter. The trial is currently set for May 22, 2021.

Earlier this year, Lee Swee Eng was forced into retirement and resigned from his director duties in all of KNM’s Malaysian Entities in what insiders saying is an attempt to reduce the sentencing by the courts.   

Although “retired”, Lee Swee Eng remains a director and in control of many of the companies’ foreign entities. The public record shows that Lee Swee Eng and his family members control the Impress Ethanol group of companies

This group of companies is of great interest to shareholders as Lee Swee Eng as CEO executed a corporate guarantee for THB2.7 Billion (estimated to be RM 355 Million as of the date of this release) “Thai Bond” to build and operate a significant expansion of the ethanol plant that is referred to as Phase 2. Payment for the Thai Bond should be coming out of the revenues produced by the Ethanol Plant.

The Thai Bond is maturing later this year and there is no sign that Phase 2 construction has even started leaving many questions from shareholders as to what has happened in Thailand with the company’s assets and how will KNM pay for the THB2.7 billion bond when it matures?

An even bigger question to the Board of directors is, why does KNM Group Berhad’s Board of Directors continue to allow a former CEO charged with Insider Trading alongside his related party family members, remain in control of KNM Assets when the company should be controlling its own assets?

Shareholders have an opportunity to take action in the upcoming AGM where it is expected that the Lee Swee Eng and family will be finally purged from the halls of KNM.

James Roberto

A multimedia journalist focused on producing articles about controversial global issues specifically on business, economy, politics, and technology. A strong believer in freedom of the press and exposing the wrong. only through engagement and communications can we as humans evolve. An accredited member of a leading local broadcast media organization.