KUALA LUMPUR: A group of investors who sued Qew Group Bhd and its two directors for fraud over RM20.45mil in accummulated investments were not victims but sophisticated investors who knowingly entered a speculative investment, the High Court was told Tuesday (June 23).
The three defendants - Qew Group, its shareholder Datuk Dr Muhamad Iqbal Mohamad, 47, and director Mohd Fairoz Muhammed, 47 - said this in their statement of defence, filed via Messrs Ahnaf Zaimi & Co recently.
They contended that Qew Group's Redeemable Preference Shares-i (RPS-i) scheme was a structured product targeted at sophisticated investors and typically required a minimum investment of RM250,000.
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, they said.
"The plaintiffs are sophisticated investors who had declared that they were capable of independently assessing the risks associated with their investments," the defendants said in the statement.
The defendants further claimed that the plaintiffs had signed warranties confirming their eligibility.
The defendants claimed that the RPS-i investment did not create a debtor-creditor relationship between Qew Group as the first defendant 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 is subject to the terms of the RPS-i agreement, the first defendant's financial position and relevant corporate decisions at all material times," the defendants said.
On April 3, the group of 111 investors filed a writ of summons against Qew, Iqbal and Fairoz, claiming that the defendants had cheated them on their investment.
Each of them allegedly invested amounts ranging from a low of RM50,000 to a high of RM1.7mil, with the promise of profitable returns.
"In the beginning, the dividend payments were made as promised to the plaintiffs. However, after some time, Qew Group began to stop its obligation when dividends were delayed, reduced and ultimately stopped without any financial explanations or accounting disclosure," the plaintiffs claimed.
The plaintiffs are seeking a court order for the first defendant to pay RM20.5mil to them and a declaration that the second and third defendants were negligent and cheated them on their investment.
They are also seeking a court order for the second and third defendants, either together or separately, to pay exemplary damages of RM20.5mil for negligence, false representation and conspiracy to defraud.
They are also seeking general and aggravated damages of RM1mil.
The case has been fixed for case management on July 6 before Judicial Commissioner Asmadi Hussin.
