The High Court is being asked to decide whether 111 people who put RM20.45 million into a QEW Group Bhd investment scheme were sophisticated players who knew the risks, or victims of a fraud. The company’s defence, filed June 23, hinges on a single argument: these were not ordinary investors. They were sophisticated investors, as defined by the Securities Commission Malaysia.
That label, QEW argues, strips the plaintiffs of their claim to be innocent victims. The investors, who range in age from relatively young to very advanced, sued in April.
They want their capital back. They also want declarations that directors Iqbal Mohamad and Fairoz Muhammed ran a fraudulent scheme and acted negligently. The plaintiffs are seeking special damages, exemplary and aggravated damages, and 5 percent annual interest until full payment.
QEW’s response, filed by Ahnaf Zaimi & Co, is blunt. The company’s Redeemable Preference Shares-i (RPS-i) scheme was a structured product.
It was not for the general public. It required a significant minimum investment. The plaintiffs, QEW says, met the Securities Commission’s criteria for sophisticated investors.
That means they had a certain level of financial expertise. They understood investment risks. They knew what they were buying.
This is the core of the defence. The investors signed agreements that included warranties.
Those warranties, QEW argues, confirm the investors acknowledged the speculative nature of the product. The company rejects the claim that the scheme guaranteed capital protection or profits. Calling such assertions “wholly illogical,” QEW says they are inconsistent with the commercial nature and actual structure of the RPS-i agreement.
The agreement expressly disclosed that subscribers could lose their entire investment. The investors were aware of the potential risks.
The RPS-i agreement itself becomes the central document in the case. QEW is asking the court to read it closely. The company says the plain language of the contract contradicts the plaintiffs’ story.
A product that warns you may lose everything is not a product that promises to protect your capital. That is the logic QEW is pushing. It is a stark argument.
It frames the investors not as dupes, but as people who made a calculated bet and lost. The plaintiffs see it differently.
They allege fraud. They allege negligence. They say the directors orchestrated a scheme that misled them.
The court will have to weigh the signed warranties against the allegations of deception. The investors’ ages are a factor.
The group includes both young and very old people. QEW’s defence implies that age alone does not make someone unsophisticated. The Securities Commission’s criteria are based on financial expertise and understanding, not age.
QEW’s directors, Iqbal Mohamad and Fairoz Muhammed, are named personally in the suit. The plaintiffs want the court to declare that they acted fraudulently and negligently. The defendants deny this.
They say the investors knowingly accepted the risks of a speculative product. The case will turn on what the investors knew, when they knew it, and what the RPS-i agreement actually said.
The High Court has not set a trial date. The pleadings are filed. The arguments are drawn.
QEW’s defence is a document that reads like a warning to anyone who signs a contract without reading it. The company is betting that the fine print will save it.
The investors are betting that the court will look past the fine print and see a scheme that preyed on them. The judge will decide which version of the story holds up.
