“Wholly illogical.” That is how QEW Group Bhd and its two directors describe the claim that their Redeemable Preference Shares-i (RPS-i) scheme promised investors their money was safe.
In a statement of defence filed by Ahnaf Zaimi & Co, the company and directors Iqbal Mohamad and Fairoz Muhammed deny they ran a fraud. They say the people suing them knew what they were buying.
What the investors claim
The plaintiffs, aged between 28 and 89, went to the High Court in April. They want RM20.45 million in invested capital returned, plus declarations that the two directors orchestrated a fraudulent scheme and acted negligently. On top of that they are asking for RM20.45 million in special damages, RM1 million in exemplary and aggravated damages, general damages to be set by the court, and interest at 5% per year until the debt is settled.
Their account is that the directors assured them their capital was protected and that monthly dividends would follow. Those dividends, they allege, became irregular and then stopped. They also say the company never returned their money, even after earlier promises of an exit plan.
What QEW says
The defence turns on who the investors were. QEW calls RPS-i a structured product aimed at sophisticated investors, with a typical minimum investment of RM250,000. The defendants say every plaintiff met the Securities Commission Malaysia’s criteria for that category.
“The plaintiffs are sophisticated investors who had declared that they were capable of independently assessing the risks associated with their investments,” the defendants said. They added that the plaintiffs had signed warranties confirming they qualified.
On dividends, QEW says none were guaranteed. Payments depended on the company’s financial situation and cash flow. Paying dividends for a period and then proposing an exit plan, it argues, shows good faith in dealing with commercial realities and not an intent to defraud. It also says it kept investors updated through emails, online updates, WhatsApp messages and financial reports.
The defendants raised a shariah point as well. Any shariah questions about the RPS-i instrument, they said, must first go to the Shariah Advisory Council of the Securities Commission Malaysia and the Shariah Advisory Council of Bank Negara Malaysia before the court weighs the claims.
Hizri Hasshan is counsel for the plaintiffs. The High Court has set July 6 for case management.
