One question hangs over the upcoming KNM Group Berhad annual general meeting, and it has nothing to do with earnings or dividends. It is a simple, uncomfortable query from shareholders: why are the two people at the center of an insider trading scandal still allowed to run the company?
Lee Swee Eng, the group’s chief executive officer and a director, stands accused of trading nearly 31 million KNM shares between February and April 2010. The Securities Commission of Malaysia says he knew a publicly announced deal was not going to close, and he used that knowledge to sell at an inflated price. He avoided a loss of roughly RM 3.6 million. Shareholders absorbed that loss instead.
The math is blunt. Lee sold while others bought, and when the deal collapsed, the share price fell. His gain was their loss.
Bursa Malaysia Berhad has already acted. It publicly reprimanded the entire KNM board for violating market listing requirements. It fined eight directors a total of RM 200,000 for their connection to the trades. That list includes Gan Siew Liat, the current executive director and Lee Swee Eng’s wife, whom the regulator accused of supporting his efforts.
But a fine and a reprimand have not removed either of them from their posts. Shareholders are asking who actually paid those penalties. Was it the directors themselves, out of their own pockets? Or was it the company treasury, which is ultimately the shareholders’ money?
That is not the only unresolved question. Lee Swee Eng faces a ninth charge filed in this case, the one for insider trading itself. The trial is set for May 22, 2021. The Securities Commission has described its evidence against him as strong, and Bursa Malaysia has shown determination in pursuing the matter. Legal observers note that defending against a direct insider trading charge, with documented trades and a known, uncompleted deal, is a difficult task.
Yet he remains CEO. His wife remains an executive director. They continue to participate in the business decisions of a company whose shareholders they are accused of defrauding.
The timeline matters here. The trades happened in 2010. The public reprimand and fines came later. The criminal trial is set for 2021. That is an eleven-year gap between the alleged misconduct and a day in court. For shareholders, that delay raises its own set of worries about governance and accountability.
Eight directors were found to be connected, directly or indirectly, to the scheme that let Lee profit. The board, as a whole, was publicly shamed by the regulator. But the board still operates. Lee still operates. The AGM is the one forum where shareholders can demand answers, and the question is already framed: why are the mastermind and his supporter still in charge?
The case has drawn attention not just for the size of the trades or the amount of money involved, but for what it says about corporate oversight in Malaysia. A CEO accused of insider trading. A board that was fined for its role. A wife who was a director and who, according to the regulator, backed the scheme. And a company that has not, publicly at least, removed any of them.
The trial on May 22 will determine Lee’s legal fate. But the AGM will determine whether shareholders accept the board’s answers, or demand change. The two events are separate, but they are tied by the same underlying question: who is actually watching the people in charge?
