Once hailed as a symbol of Malaysia’s global industrial ambition, KNM Group Berhad, a process engineering firm, is now facing a severe corporate collapse. It failed to list its flagship subsidiary, became crippled by overwhelming debt, and lost the confidence of investors. KNM has become a cautionary tale of a Malaysian company besieged by scandal and poor corporate governance.
Background to the Collapse
KNM’s decline began after 2012 when it undertook high-leverage, non-strategic investments, including the acquisitions of Borsig GmbH (Germany) and FBM Hudson Italiana (Italy). While once portrayed as a globally ambitious Malaysian firm, KNM was plagued by weak project execution, deteriorating cash flow, and ineffective leadership.
KNM Crisis Timeline (2010–2025)
| YEAR | KEY EVENT |
|---|---|
| 2010–2012 | Peak of global expansion; major acquisitions (Borsig GmbH and FBM Hudson Italiana). |
| 2013 | Early signs of financial stress as cash flow weakens and projects stall. |
| 2014–2015 | Major project failures, rising costs, and falling profitability. |
| 2016 | Initial debt restructuring talks with local and foreign financiers. |
| 2017 | Major financial losses reported; asset book values decline sharply. |
| 2018 | First failed attempt to list Borsig on SGX due to investor concerns. |
| 2019 | No significant progress; financial pressure mounts. |
| 2020 | Default on sukuk payments; classified as a defaulting issuer. |
| 2021 | COVID-19 severely disrupts operations; plant utilisation plunges. |
| 2022 | Non-core assets put up for sale, but no major buyers emerge. |
| Jan 2023 | Second listing attempt for Borsig at a USD300 million valuation fails to progress. |
| Oct 2023 | Heated EGM: Tunku Dato’ Yaacob Khyra blocks takeover attempt by Andreas Heeschen (owner of Heckler & Koch, Germany). |
| 2024 | UK subsidiaries (Peterborough Green Energy Ltd and K.N.M. Group Ltd) report minimal revenue and limited activity. |
| Feb 2025 | Borsig listing dropped; KNM announces sale of Borsig to NGK Insulators Ltd (Japan) for €270 million to cut debt. |
| Mar 2025 | MBSB files lawsuit against KNM, later withdrawn following Borsig sale announcement. |
| 2025 | Bursa Malaysia flags KNM for potential delisting due to ongoing financial distress. |
Failed Listings and Asset Disposal Crisis
KNM had planned to list Borsig GmbH on the Singapore Exchange (SGX) as a financial rescue strategy. The plan failed, reportedly due to KNM’s high parent-level liabilities and a lack of investor confidence. Efforts to sell Borsig to address over RM1 billion in debt also stumbled, with offers falling short of covering outstanding bond and loan obligations.
Subsidiaries in Trouble and Creditor Claims
Several KNM subsidiaries are entangled in the group’s collapsing corporate structure:
| SUBSIDIARY | STATUS |
| Borsig GmbH (Germany) | Active but hindered by corporate entanglements. |
| FBM Hudson Italiana (Italy) | Weakened due to limited capital inflow from KNM. |
| KNM Process Systems Sdn Bhd | Facing litigation; lacks new project pipeline. |
| Peterborough Green Energy Ltd (UK) | Limited operations and minimal revenue. |
| K.N.M. Group Ltd (UK) | Investment holding entity; no trading activity. |
Both UK-based subsidiaries have little operational value, with poor cash flow and limited commercial activity, reflecting the broader financial paralysis within the group.
Among the key creditors pursuing legal action was Malaysia Building Society Berhad (MBSB), seeking repayment of outstanding loans.
List of Legal Actions Against KNM (2019–2025)
| YEAR | PARTY | LEGAL ACTION |
| 2019–2020 | MBSB Bank Berhad | Lawsuit over unpaid corporate loans. |
| 2020 | Sukuk Holders (via Trustee) | Legal action for defaulted sukuk payments. |
| 2021 | Vendors & Suppliers (Malaysia & Thailand) | Civil suits for unpaid project fees. |
| 2022 | Ex-employees & Subcontractors | Claims for compensation and contract breaches. |
| 2023 | Middle East JV Partners | Arbitration for failed joint venture. |
| 2024–2025 | Minority Shareholders | Complaints over fiduciary breaches and financial disclosures. |
| 2025 | MBSB Bank Berhad | Two lawsuits: (1) RM118.7 million & USD2.49 million claim against KNMPS & KNM; (2) Auction petition for land owned by Perwira Awan Sdn Bhd. Both withdrawn in April 2025 post-negotiations. |
Leadership of Tunku Dato’ Yaacob Khyra: Hope or Failure?
Despite thwarting a hostile takeover by German billionaire Andreas Heeschen in October 2023, Tunku Dato’ Yaacob Khyra has failed to deliver a corporate turnaround:
- KNM continues to report quarterly losses. As of FY ended 31 December 2023, net loss stood at RM420 million with current liabilities exceeding current assets by RM1.16 billion.
- The company defaulted on multiple loan facilities and remains in financial restructuring mode.
- The market has little faith in the turnaround plan.
- No concrete strategy exists to generate cash or salvage strategic assets.
- His ambitious plan to list Borsig on SGX with a USD300 million valuation failed.
Allegations of Misconduct and Manipulation
As the largest shareholder, Tunku Dato’ Yaacob Khyra has been linked to several integrity issues:
- Alleged stock manipulation involving MAA Group Bhd via questionable cross-purchases. Malaysian media portals have exposed relevant documents, yet the Securities Commission has taken no action, allegedly due to corruption.
- Abuse of power by management in speculative investments.
- Repeated defaults on sukuk and bank loan repayments.
KNM’s Future: A Bleak Outlook
Summary assessment of KNM’s current standing:
| FACTOR | ASSESSMENT |
| Financial Health | Critical |
| Investor Confidence | Nearly Non-existent |
| Restructuring Potential | Very Low |
| Asset Liquidation | Insufficient to repay debts |
KNM’s future hinges on:
- Ability to sell assets at reasonable market value.
- Potential strategic acquisition by external investors.
- Drastic debt restructuring — a formidable challenge in today’s environment.
KNM: A Legacy of Pride or a National Embarrassment?
KNM’s collapse is a stark reminder of the dangers of excessive leverage, poor leadership, and neglect of governance principles. Despite remaining listed on Bursa Malaysia, KNM today is a shell of its former self — stripped of intrinsic value and reliant on the final auction of its corporate remnants.
Will its overseas assets in Germany, Italy, UAE, Thailand, and the UK be salvaged or squandered? The world is watching as Malaysia’s once-proud industrial flagbearer, now led by a Negeri Sembilan royal, Tunku Dato’ Yaacob Khyra, teeters on the edge of irrelevance.
