Tunku Yaacob Khyra: The Mastermind Behind KNM Group Bhd’s Vote Rigging Scandal
14 February 2024, Kuala Lumpur – The scandal enveloping KNM Group Bhd (KLSE (MYR): KNM (7164)) has taken a dramatic turn, with Tunku Datuk Yaacob Khyra being identified as the mastermind behind a sophisticated vote rigging and shareholder identity misuse scheme. This critical development has significantly intensified the scrutiny on the company by the Federal Commercial Crime Investigation Department (CCID), which has taken substantial steps by seizing crucial documents to address the situation.
Unfolding Allegations and Key Developments:
The scandal has unraveled further with the disclosure of communications from shareholders in reference to the KNM extraordinary general meeting (EGM) results from the 16 October 2023 election. These shareholders have expressed their outrage upon discovering that their names and shares were used without their consent, seemingly to secure Tunku Yaacob’s position at the helm. This misuse of shareholder identities has severely compromised the EGM’s integrity and placed Tunku Yaacob as the primary beneficiary of this fraudulent scheme.
The gravity of the situation was highlighted by the CCID’s intervention, where documents were seized from the Company Secretary’s office and the voting registrar. The focus was on suspected forged proxy forms. More than ten shareholders have reported that they were contacted by the CCID and interviewed, only to discover that their names were used and signatures forged.
Below is the link to KNM’s Group Minutes of Meeting for the EGM:
https://www.knm-group.com/Minutes%20of%20the%20EGM.pdf
Tunku Yaacob and his associates barely held on to power by a 2% margin with the help of the forged documents, allowing the company to wrongly report the results to the market as shown in the KNM Minutes above. Removing the forged votes for just these ten shareholders, it is clear the challenging directors won the election by a wide margin.
Reports from those close to the matter indicate that more than just the ten shareholders’ documents were forged; it is believed that more than fifty shareholder documents were used to cast votes illegally, all to the benefit of Chairman Tunku Yaacob and his gang of directors. It has been further reported that he has been compensating the executives of KNM with funds from MAA Group Berhad (KLSE (MYR): MAA (1198)). This is suspected to be a violation of the law and warrants investigation. MAA Group Berhad shareholders should not bear the cost of KNM Group expenses.
These revelations come as no surprise given the track record of Tunku Yaacob and his associates. There is a long history of conflicts and litigation caused by his manipulative actions that have benefited him personally, leaving shareholders at a loss. He allegedly uses his title of Tunku to manipulate the system to his advantage, despite being just a third tier relative of the real royal family.
In recent news, it was reported that Tunku Yaacob forced MAA Group Berhad, a company of which he is Chairman and controlling shareholder, to purchase KNM shares from his long-time friend at double the market price, causing a loss to MAA shareholders of more than RM7 million.
Below is the link to the story of the MAA purchase of shares at doule the makert price:
https://theedgemalaysia.com/node/700452
Bursa Malaysia, the pinnacle of the Malaysian stock exchange, is currently enveloped in a potential conflict of interest controversy. At the heart of this brewing storm is the CEO of Bursa Malaysia, Datuk Muhamad Umar Swift, whose previous role as the CEO of MAA Group Berhad and current next-door neighbour intersects with the alleged corporate scandal involving Tunku Dato’ Yaacob Khyra. It is widely believed that Datuk Muhamad Umar Swift covered up a scandal that gained momentum last year following a whistleblower report, dated June 19, 2023, which implicated Tunku Yaacob, a key figure in KNM Group Berhad and MAA Group Berhad. The report alleges serious breaches of fiduciary duties and fraudulent misrepresentation by Tunku Dato’ Yaacob, which reportedly pushed FBM Hudson Italiana, a KNM Group asset, towards financial instability.
Potential Legal Implications:
This scandal touches on multiple potential violations of Malaysian laws:
- Forgery and Fraud: Central to the case is the alleged forgery of proxy forms, a clear act of fraud that could see Tunku Yaacob facing hefty penalties, including fines and imprisonment, under the Malaysian Penal Code.
- Misuse of Corporate Assets and Breach of Fiduciary Duty: Tunku Yaacob’s actions suggest a direct violation of his fiduciary duties by leveraging company resources for personal gain, risking civil penalties and directorship disqualification.
- Securities Fraud: The manipulation has implications for securities fraud, given the misleading of shareholders and impact on stock prices, punishable under the Capital Markets and Services Act 2007.
- Identity Theft and Misrepresentation: The unauthorized use of shareholder identities for voting raises serious concerns about identity theft, potentially adding to the legal challenges Tunku Yaacob faces.
- Violations of the Companies Act 2016: Non-compliance with EGM statutory requirements could trigger further penalties, highlighting the need for strict corporate governance adherence.
Corporate Governance and Forward Path for KNM Group Bhd:
The unfolding scandal has cast a long shadow over Malaysian corporate governance, emphasizing the necessity for ethical conduct and transparency. The corporate community and regulatory authorities are closely monitoring the situation, aware of its potential to redefine corporate governance enforcement.
KNM Group Bhd’s journey towards recovery involves addressing the shareholder grievances and legal entanglements while ensuring strict compliance with Malaysian laws and governance principles. Shareholder lawsuits seeking damages for the blocked solutions proposed by the incumbent directors add another layer of complexity to the company’s path to redemption.
Conclusion:
It is widely believed that Tunku Yaacob has arranged for a fall guy to take the blame and penalty for being caught allowing him to walk away with clean hands. But that being said, the enablers that assisted him in this exercise will be held to account and pay the price which includes up to 6 years in prison. But rest assured, the liability for losses in shareholder value and damages to KNM will be levied against the current board of directors personally. Tunku Yaccob has clearly bit off more than he can chew.
The KNM Group Bhd scandal, with Tunku Yaacob at its epicenter, serves as a cautionary tale about the severe consequences of ethical and legal breaches in corporate leadership. As the investigation continues to unfold, the focus remains on achieving accountability, upholding the rule of law, and strengthening the foundations of corporate governance in Malaysia. The resolution of this case could mark a pivotal moment in the country’s corporate governance landscape, setting new standards for integrity and ethical leadership.
