KUALA LUMPUR — The 111 people who sued Qew Group Bhd and two of its directors over a substantial investment loss now face a legal counter-narrative: they were not duped. They were sophisticated players who knew the game. That is the core of the defence filed by Qew Group, its shareholder Datuk Dr Muhamad Iqbal Mohamad, and director Mohd Fairoz Muhammed.
The case, heard in the High Court today, turns on whether the plaintiffs — aged 28 to 89 — understood what they were buying into. The defendants say yes.
They argue the Redeemable Preference Shares-i (RPS-i) scheme was a structured product. Not a savings account. Not a fixed deposit.
It required a significant minimum investment, and the investors met the Securities Commission Malaysia’s criteria for sophisticated investors. Each plaintiff put in a considerable sum.
They signed warranties. They declared they could independently assess risk. The defence says that means they understood the potential rewards — and the potential losses.
This is not a simple loan, the defendants insist. The RPS-i agreement did not create a debtor-creditor relationship. There was no absolute obligation to repay, as in a conventional loan contract.
Any returns, any distribution, any redemption depended on Qew Group’s financial position and corporate decisions at the time. The plaintiffs filed their writ of summons on April 3.
They sued for fraud. Now the defence has shifted the ground. The question is no longer just what the company did.
It is what the investors knew, and when they knew it. For the 111 plaintiffs, this is a blow.
A group that includes people in their 80s is being told they were not vulnerable. They were sophisticated. The law draws a line between a victim and a willing risk-taker.
The defendants are arguing that line runs through this case. The court will have to weigh the signed warranties against the investors’ claim of fraud. Were they told the truth about the scheme?
Did they sign documents that contradicted what they were told? The defence does not address that directly.
It focuses on the investors’ declared sophistication. What comes next is a battle over documents. The terms of the RPS-i agreement.
The marketing materials. The communications between the company and each investor.
The plaintiffs will have to show they were misled despite their signed declarations. The defendants will argue the declarations speak for themselves. The case also puts the Securities Commission’s framework in the spotlight.
The definition of a sophisticated investor is meant to protect people who need protection. But it also creates a category of people who are deemed able to fend for themselves. The defendants are using that category as a shield.
For other investors in similar schemes, this case is a warning. Signing a warranty that you are sophisticated may later be used to argue you cannot claim you were tricked.
The paper you sign can become the company’s best defence. The High Court has not set a trial date. But the defence has drawn the battle lines.
It is no longer just about whether Qew Group committed fraud. It is about whether the people who put their money in were the kind of people who could be defrauded in the first place.
