KUALA LUMPUR (Aug 29): KomarkCorp Bhd (KL:KOMARK) said it has applied for leave to appeal against the Court of Appeal's (COA) ruling that The Edge Communications Sdn Bhd did not defame the company in a 2021 article about penny stocks.

The appellate court had on July 31 affirmed the High Court’s earlier ruling that The Edge did not defame KomarkCorp in the article scrutinising hidden hands behind a surge in penny stocks.

In a brief filing with Bursa Malaysia on Friday, KomarkCorp said the company filed the notice for leave to appeal against the appellate court's judgement on Aug 27.

In the 2021 lawsuit, KomarkCorp sought damages and an injunction to restrain The Edge from publishing the same or similar words arising from the article, 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 suit at the High Court in Kuala Lumpur proceeded for two days on Feb 5 and Feb 7, 2024.

In the July 31 decision, the Court of Appeal bench led by Chief Justice Datuk Wan Ahmad Farid Wan Salleh 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.

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.

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