PUTRAJAYA (July 31): The Court of Appeal on Thursday unanimously rejected KomarkCorp Bhd’s (KL:KOMARK) appeal, affirming the High Court’s earlier ruling that The Edge Communications Sdn Bhd did not defame the company in a 2021 article about penny stocks.
The appeal was dismissed with costs. After submissions from both parties, the court awarded RM20,000 in costs to The Edge, rejecting the initial request for RM30,000.
The judgement was delivered by newly minted Chief Justice Datuk Wan Ahmad Farid Wan Salleh via the Zoom meeting platform, in his first decision since taking office.
The bench found that there was no merit in KomarkCorp’s claim that it had been defamed by the article entitled “Hidden hands behind penny stock surge under scrutiny”, that discussed investigations by authorities into a group of individuals allegedly involved in unlawful financial activities, including stock manipulation and money laundering.
Wan Ahmad Farid, together with Datuk S Nantha Balan and Datuk Azhahari Kamal Ramli, reaffirmed the High Court’s previous judgement that the article did not refer to KomarkCorp in a manner that would reasonably lead a reader to conclude it was culpable.
They also agreed with the High Court decision that there was no malice in The Edge’s publication, which had relied on credible sources including industry insiders and enforcement agencies. There was also no tangible evidence that KomarkCorp’s trading reputation had been adversely affected by the publication.
The appellate court, in its judgement, highlighted that KomarkCorp had been offered an opportunity to publish a reply, but had declined to do so. The court considered this a significant factor in rejecting the claim of malicious intent.
Wan Ahmad Farid emphasised the importance of reading the piece in its entirety, and not isolating specific sentences out of context. It accepted The Edge’s argument that the article maintained journalistic neutrality and objectivity, and that the imputed paragraphs, even if they mentioned the company’s name, did not accuse KomarkCorp of any wrongdoing.
“Reading the article as a whole, it becomes evident that KomarkCorp was not implicated in the alleged crimes but was used as a tool by the wrongdoers,” he said.
The court also supported The Edge’s defence of qualified privilege and justification, agreeing that the article was published in the public interest, using reliable sources, and was not directed at KomarkCorp. The court found no evidence of reckless reporting or bad faith on the part of The Edge.
Lawyer K Shanmuga and Natalie Jong appeared for The Edge. Tan Su Ning appeared for KomarkCorp.
In the lawsuit filed in 2021 against The Edge, KomarkCorp was seeking damages and an injunction to restrain the publication from publishing the same or similar words arising from the article in 2021, which it considered to be defamatory to the company. The article was a follow-up to an earlier one entitled “Special Report: Hidden hands behind penny stock surge published in 2020”.
The trial for this lawsuit at the High Court in Kuala Lumpur, proceeded for two days on Feb 5 and Feb 7, 2024.
During the trial, The Edge chief executive officer and publisher Datuk Ho Kay Tat and editor-in-chief Kathy Fong testified for the publication, while KomarkCorp executive director Roy Ho Yew Kee testified for the self-adhesive label company.