KNM Group: The Rise and Ruin of a Malaysian Champion — and the Lessons in Its Fall
KNM Group Berhad was, for a stretch of the 2000s, one of Malaysia’s corporate success stories: a homegrown maker of pressure vessels and process equipment that grew from a single workshop into a Bursa-listed name shipping to oil, gas and petrochemical clients across three continents. In November 2025 the exchange struck it off for good, and what remains of the business is now being wound down — its foreign units sold for whatever they will fetch against debts they cannot cover. The company’s story is really the story of one man, Lee Swee Eng, whose initials it carries, and of how a founder-built empire over-reached, ran up debt it could not service, defaulted on money raised for a plant that was never built, and finally slipped out of his hands into those of another financier. It is a cautionary tale in how Malaysian corporate empires are made and unmade.
From the shop floor to the rich list
Lee is an engineer by training — a first-class mechanical-engineering degree from the University of Strathclyde in 1979, a registered professional engineer by 1984, a Fellow of the Institution of Engineers, Malaysia, by 1993. Before he worked for himself he logged years at Exxon, at national oil company Petronas, and at contractors John Brown E&C and Technip, learning the process-plant trade. In 1990 he and his wife, Gan Siew Liat, set up KNM as a private manufacturer. It listed on Bursa Malaysia in 2003, with Lee as group managing director.
The boom years were kind to him. By 2007 KNM was worth around RM8 billion and Lee’s roughly 26% stake was worth more than RM2 billion on paper. His signature deal came in 2008: the €350 million (about RM1.67 billion) purchase of Germany’s Borsig, which handed KNM European technology and a blue-chip client book, and which for years threw off some RM100 million in annual pre-tax profit. But the growth was bought with borrowed money, and the debt never left. By the 2020 financial year, finance costs of around RM60 million were eating some 40% of operating profit.
A family bet in the Thai cane fields
Among the ventures that would eventually help sink the group was a fuel-ethanol plant in Thailand, run through Impress Ethanol Company Limited at Chachoengsao, east of Bangkok, capitalised at THB942 million. The Lees controlled it through two Mauritius holding companies — Asia Bio-fuels Limited (ABL) and Asia Biofuels II Ltd (ABL II) — which between them held about 72% of the operation.
The family did not run this at arm’s length. Lee’s daughter, Sara Lee Mei Ching, was an appointed director of both Mauritius vehicles; the ABL and ABL II statutory forms record her certifying that “I consent to act as director of the company and certify that I am not disqualified from being appointed or holding office as a director of a company.” She also stood in as ABL’s proxy at the ethanol company’s shareholder meetings and was a director of the group’s KNM Global (S) Pte Ltd. Her father took the ethanol company’s own board directly: the minutes of Impress Ethanol’s extraordinary general meeting of 21 September 2015 note that “Mr. Lee Swee Eng, Proxy of Asia Biofuels II Ltd., was elected as the Chairman of the meeting,” which then “approved the appointment of new directors, Mr. Lee Swee Eng and Mr. Ng Boon Su” — a move an independent director and a minority-fund shareholder objected, in writing, was improperly called. The people at the controls of the ethanol venture, in short, were the Lees.
It became a sink for money rather than a source of it. KNM Group had guaranteed the plant’s borrowings from the Export-Import Bank of Thailand — a guarantee covering THB1.21 billion and US$7 million over an underlying THB900 million loan and a THB300 million revolving line. And it had a THB2.78 billion bond (about RM347 million) backed by the Credit Guarantee and Investment Facility, an Asian Development Bank trust fund — money raised to build a second phase of the plant. That second phase was never built. When the bond fell due, KNM could not pay: it defaulted on 18 November 2021, and CGIF had to settle with the bondholders on the group’s behalf on 15 December 2021. That leaves a question still unanswered — if the proceeds were borrowed to build an expansion that never rose, where did the money go, and why was nothing left to repay the debt? To date, no one has been able to trace it.
The regulator’s mark
Lee also carries a securities judgment. On 29 April 2020 the Securities Commission Malaysia sued him for insider trading — a breach of section 188(2) of the Capital Markets and Services Act 2007 — over sales of KNM shares made while he held inside information. On 23 August 2022 the High Court entered a consent judgment: Lee gave up the loss he had avoided, paid a civil penalty and costs, and accepted five-year bans on sitting as a director of a listed company and on dealing in securities. It was a civil matter settled by consent; there is no criminal conviction of Lee on the public record.
Losing the company that bore his name
As KNM sank, control slipped away from its founder. In September 2021 Tunku Datuk Yaacob Khyra’s MAA Group moved in, taking a 7.01% block of 233 million shares on the open market for RM52.89 million and buying a further slice directly from Lee off-market. Gan Siew Liat resigned as executive vice-chairman, Lee stepped back, and MAA overtook him as the largest shareholder. In July 2022 Lee transferred a block of shares to his daughter, and kept selling down until he was no longer even a substantial shareholder of KNM.
The rest was procedure. KNM was declared a PN17 distressed company on 31 October 2022 after its auditor flagged going-concern doubt; creditors filed to wind it up; group defaults ran past RM1.3 billion. KNM agreed to sell Borsig to Japan’s NGK Insulators for €270 million and then sued NGK for RM600 million over what it called a botched deal. Bursa rejected the group’s plan to fix its finances, and on 5 November 2025 KNM was delisted after 22 years as a public company.
The story is not over
Delisting only opened the next phase. There is no turnaround to attempt: the operating business is effectively finished, and what value remains — chiefly the overseas units — is being liquidated, not revived, against liabilities the assets cannot meet. Creditors are now in the process of taking control. After years without a workable plan, neither they nor shareholders appear to have any confidence left in the current board and management. As the wind-down proceeds, the conduct of the principals — Lee Swee Eng, the founder whose family ran the ventures that helped bring KNM down, and Tunku Yaacob Khyra, who arrived as Lee departed — is likely to face far harder questions. Chief among them: what became of the money borrowed against a plant that was never built. That chapter has not been written yet.
