KUALA LUMPUR (March 14): CTOS Digital Bhd on Thursday said its wholly owned unit CTOS Data Systems Sdn Bhd (CDS) has applied for a stay of execution of a High Court judgement after CDS was ordered to pay damages to its client over an inaccurate negative credit rating.
Prior to filing the stay of execution, CTOS said on Monday that CDS had lodged a notice of appeal to the Court of Appeal over the High Court’s judgement.
According to the judgement dated March 7, the High Court ordered CDS to pay businesswoman Suriati Mohd Yusuf RM200,000 in damages, along with RM50,000 in costs, for an inaccurate negative credit rating.
Suriati alleged that CDS had given her a negative credit rating based on inaccurate information, leading to personal and business losses.
She also alleged that CDS had breached its purported duty of care, impacted her ability to obtain bank loans, and further claimed that the credit reporting agency had defamed her.
CTOS, however, said that CDS has a good chance of success in its appeal as there is no duty of care to protect its client's reputation.
“Reputational loss must be made the subject of a claim in defamation. The High Court did not find that CDS had defamed the plaintiff (Suriati). It found, instead, that CDS had breached its duty of care to the plaintiff,” CTOS said in a bourse filing on Thursday.
It also stressed that there was no evidence (before the High Court) that CDS' credit score reports were published to any third parties, which could lead to defamation claims.
Meanwhile, on the High Court decision that CDS and other credit reporting agencies are not legally empowered to formulate a credit score, CTOS noted that it was not raised by the plaintiff in her claim; thus, CDS did not have the opportunity to explain the requirements of the regulatory framework and its full compliance.
“To the extent that it can be said that the observation of the learned judge regarding the absence of any provision under the Credit Reporting Agency (CRA) Act empowering CDS to formulate a credit score was a finding where CDS did not have the benefit of natural justice as it was not part of the plaintiff’s claim and CDS had thus not been afforded a full opportunity to be heard,” it explained.
“In this regard, it was not in evidence that the plaintiff had lodged a complaint with the registrar under the CRA Act against CDS for it having acted in contravention of the said statute,” it added.
At 3.42pm on Thursday, shares in CTOS were unchanged at RM1.28, valuing the group at RM2.96 billion.
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