Investment Lawsuit: QEW Group Claims 111 Investors Understood Investment Risks
KUALA LUMPUR, June 23 (Bernama) -- QEW Group Bhd and two of its directors have informed the High Court that the 111 investors who filed a lawsuit against them over the alleged failure to return RM20.5 million in investment capital were sophisticated investors who knowingly participated in the investment scheme and were capable of assessing the associated risks themselves.
In the statement of defence filed in response to the suit, they said the Redeemable Preference Shares-i (RPS-i) investment scheme was a structured product targeted at sophisticated investors, typically requiring a minimum investment of RM250,000.
The three defendants contended that all plaintiffs were sophisticated investors who had declared that they were capable of assessing the risks associated with their investments and had also signed warranties confirming their eligibility.
“All investors fulfilled the criteria of sophisticated investors under the framework established by the Securities Commission Malaysia. Pursuant to Clause 8 of the RPS-i Agreement, the plaintiffs knew and understood that the RPS-i investment involved a significant level of risk and that any indication regarding capital returns or dividends stated in the agreement or Information Memorandum was merely an estimate and was not guaranteed,” they said.
They claimed that all investors acknowledged that they fell within the investor categories stipulated under Schedules 6 and 7 of the Capital Markets and Services Act 2007, possessing the knowledge and experience in financial and business matters necessary to assess the merits and risks of the RPS-i investment before deciding to invest.
“The plaintiffs also agreed under Clause 8.10 of the RPS-i Agreement to indemnify and hold harmless the first defendant and its officers or directors from any action, claim or proceeding arising in connection with representations or information provided by the plaintiffs relating to the RPS-i investment.
“The value and returns of investments through the RPS-i are not fixed and may fluctuate depending on prevailing circumstances, including the possibility of returns being lower than expected or delays in any payment or redemption, subject to the company’s performance and financial position,” the defendants stated.
On April 3, the 111 investors, aged between 28 and 89, filed the suit, alleging that between 2022 and 2024 they had been influenced and encouraged by the defendants to invest in and subscribe to the RPS-i Investment Scheme offered, promoted, marketed and managed by the defendants.
They claimed that dividend payments were initially made as promised. However, QEW allegedly began failing to fulfil its obligations when the promised dividend payments were postponed, reduced and eventually stopped altogether.
The plaintiffs are therefore seeking an order requiring the company to pay them RM20.5 million and a declaration that the two directors acted negligently and engaged in a scheme to defraud them of their investment capital.
Meanwhile, lawyer Ahmad Ahnaf Zaimi, who represents all the defendants, confirmed the filing of the statement of defence when contacted by reporters.
In a media statement issued today, QEW Group Bhd said it is currently implementing a restructuring plan and an exit plan as part of its ongoing efforts to fulfil its commitments to investors.
“The matter is currently before the court within the context of the company’s corporate restructuring process and the settlement of its obligations. Such processes are not uncommon in the financial and investment industry, particularly when a company undertakes an orderly and sustainable approach to meeting its obligations,” the company said.
-- BERNAMA
