KUALA LUMPUR, June 23 — A group of investors who sued Qew Group Bhd and its two directors for fraud over a substantial amount of money were not victims but sophisticated investors who knowingly entered a speculative investment, the High Court was told today.
The defendants, Qew Group, its shareholder Datuk Dr Muhamad Iqbal Mohamad, and director Mohd Fairoz Muhammed, made this claim in their statement of defence, filed via Messrs Ahnaf Zaimi & Co. They argued that Qew Group’s Redeemable Preference Shares-i (RPS-i) scheme was a structured product targeted at sophisticated investors, typically requiring a significant minimum investment. The 111 plaintiffs, aged between 28 and 89 years old, had met the criteria for sophisticated investors under the framework set by the Securities Commission Malaysia.
Hefty investments were made by these plaintiffs, who had declared that they were capable of independently assessing the risks associated with their investments. The defendants claimed that the plaintiffs had signed warranties confirming their eligibility, indicating that they were aware of the potential risks and rewards associated with the RPS-i scheme. A significant number of investors were involved in this case, with each having invested a considerable amount of money.
The defendants further claimed that the RPS-i investment did not create a debtor-creditor relationship between Qew Group and the investors, and that this could not be categorised as an absolute obligatory repayment as a conventional loan contract. Any returns, distribution, or redemption was subject to the terms of the RPS-i agreement, Qew Group’s financial position, and relevant corporate decisions at all material times.
On April 3, the group of investors filed a writ of summons against Qew, Iqbal, and Fairoz, claiming that the defendants had cheated them on their investment. Each of them alleged that they had been misled, but the defendants countered that the plaintiffs were sophisticated investors who had made informed decisions. The defendants’ statement of defence highlighted the complexities of the RPS-i scheme and the plaintiffs’ understanding of the risks involved.
The case will likely involve a detailed examination of the RPS-i scheme and the plaintiffs’ understanding of the investment. The court will need to consider the terms of the RPS-i agreement and the defendants’ financial position at the time of the investment. As the case unfolds, it will be essential to watch how the court interprets the relationship between Qew Group and the investors, and whether the plaintiffs’ claims of fraud will be upheld.
The outcome of this case may have significant implications for investors and companies involved in similar schemes. The court’s decision will provide clarity on the responsibilities of companies offering structured products and the expectations of sophisticated investors.
As the case progresses, it will be crucial to monitor the developments and assess the potential impact on the investment community. For now, the focus will be on the court’s interpretation of the RPS-i scheme and the defendants’ statement of defence. The plaintiffs’ allegations of fraud will be scrutinized, and the court will need to determine whether the defendants’ actions were indeed fraudulent or if the plaintiffs were aware of the risks involved.
The case is expected to be closely watched, and the outcome will likely have far-reaching consequences for all parties involved.
