KUALA LUMPUR (March 13): Retirement Fund Inc (KWAP) emerged as a substantial shareholder in CTOS Digital Bhd amid heavy selling pressure on Tuesday (March 12) following an unfavourable outcome towards the group in a legal dispute.

Stock exchange filings showed that the Malaysia's public sector pension fund bought 28.81 million shares on the open market, raising its holdings to 135.51 million shares or a 5.87% stake in CTOS.

In a separate filing with Bursa Malaysia, the credit reporting agency also disclosed that KWAP’s fund manager disposed of 1.37 million shares on the same day, paring its shareholdings to 134.14 million shares or a 5.81% stake.

CTOS’ share price once slid below its initial public offering level of RM1.10 on Tuesday after market learned of a judge’s ruling in a legal dispute that the group is not legally empowered to formulate credit scores, stirring fears among investors that this may impair the attractiveness of its service offerings.

However, management clarified later that it was business as usual in CTOS as the High Court ruling did not include an injunction to prevent it from continuing with the provision of credit scores.

Throughout Tuesday, the stock dropped as much as 27% to RM1.06, before paring the losses to close at RM1.25, down 20 sen or 14%.

The closing price on Tuesday represents an 18% rise from the intraday low of RM1.06.

On Wednesday, the counter continued to recover to as high as RM1.32, before paring gains to stabilise at RM1.28, closing three sen or 2.4% higher, valuing it at RM2.96 billion.