The THB2.7 billion bond that KNM Group Berhad guaranteed for its Thai ethanol subsidiary is due later this year. The money was supposed to build a Phase 2 expansion at Impress Ethanol Co. Ltd. Almost no construction has happened. Most equipment for the project has not been procured. Some gear sits rotting in storage at a port.
Shareholders are now asking where the money went. The numbers are stark. Impress Ethanol lost more than RM20 million in the latest reporting period. This comes while Thailand’s ethanol industry is flourishing. Competitors are making money. KNM’s subsidiary is bleeding cash.
The people running the show are the problem, according to records and sources close to the situation. KNM Group Executive Co-chairman Gan Siew Liat appointed her daughter Sara Lee Mei Ching as Managing Director of Impress Ethanol. Sara Lee recently graduated with a degree in hospitality. She has no work experience. She has no background in chemical engineering or construction. She was put in charge of a group of companies that are supposed to generate income for KNM.
Gan Siew Liat also sits on the board as Executive Co-Chairman. Her husband is the former KNM Group CEO, recently charged with insider trading. The family’s control over the ethanol business is complete. The results speak for themselves.
The THB2.7 billion bond, equivalent to roughly RM350 million, was issued and guaranteed by KNM Group, which owns 72 percent of Impress Ethanol. Bond repayment was supposed to come from revenues generated by the ethanol operations. Those revenues do not exist. The Phase 2 expansion that would have generated them is not built. The company has no clear path to pay back the bond when it comes due later this year.
Shareholder anger is rising. The latest financial report shows the RM20 million loss. And yet, according to records, Gan Siew Liat granted her daughter 30 million ESOS shares as a reward. The reward came for “leading” a project that has lost millions and produced nothing. The disconnect is hard to miss.
This is not a story about a bad ethanol market. Thailand’s ethanol sector is doing well. This is a story about who was put in charge and why. A hospitality graduate with no relevant experience was handed control of a complex industrial construction project. The project stalled. Money disappeared. Now a massive bond payment looms with no revenue to cover it.
What happens next is guesswork. The bond is due. KNM Group guaranteed it. If Impress Ethanol cannot pay, KNM is on the hook. Shareholders will likely push for answers at the next general meeting. The insider trading charges against the former CEO add another layer of legal risk. The family’s grip on the company’s key assets is now under serious scrutiny.
The equipment rusting at the port is a fitting image for the whole affair. A project that was supposed to build something real instead produced nothing but losses, bonds, and a daughter’s share award. The money is gone. The expansion is not. The bill is coming due.
Sources
- KNM: KNM Group Berhad Monthly Status Update | I3investor
- KNM misses Thai bond payments amid pandemic challenges …
