KUALA LUMPUR (March 26): The High Court on Tuesday ruled that The Edge Communications Sdn Bhd did not defame KomarkCorp Bhd in an article about penny stocks nearly three years ago.

KomarkCorp had failed to prove its case on a balance of probabilities, said judge Hayatul Akmal Abdul Aziz in delivering her decision. The legal burden lay on the plaintiff throughout the proceedings to prove its claim, she noted.

“It was all a matter of truth, and that until and unless the plaintiff has discharged the onus to prove its case, on a balance of probabilities, the burden did not shift to the defendant, no matter how unbelievable the defendant might seem,” she said.

“When the plaintiff failed to prove his case, it would not avail him to turn around and say that the defendant has not established his,” Hayatul Akmal said. “The defendant can say 'It is wholly immaterial whether I prove my case or not, you have not proven yours'.”

In its lawsuit 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.

Hayatul Akmal also found that the 2021 article entitled Hidden hands behind penny stock surge under scrutiny does not refer to KomarkCorp, but instead was reporting about authorities investigating a group of individuals suspected of using the plaintiff and other companies for unlawful purposes.

KomarkCorp is listed as one of the vehicles the alleged individuals used.

"In my considered view, it (the article) is not defamatory,” Hayatul Akmal said.

“The authorities are going after a group of individuals behind stock price manipulation, asset shuffling, and other unlawful activities using the listed companies, including the plaintiff, as their vehicles. In that context, it cannot be considered defamatory of the plaintiff,” she added.

Further, Hayatul Akmal said KomarkCorp had failed to justify all three essential elements of defamation, namely, whether the statement is defamatory in nature; does the statement refer to the plaintiff; and, has the statement been published to a third party.

In construing the statement in the article, Hayatul Akmal stressed that “it is necessary to consider the actual words used, and the context in which it was used” and whether it was libellous in nature.

“I find on the balance of probabilities, the plaintiff has failed to prove its case, and it should be dismissed with costs,” she said, and fixed a cost of RM35,000 payable within 14 days.

The trial for this lawsuit proceeded for two days on Feb 5 and Feb 7 this year, with the decision delivered on Tuesday.

During the trial, The Edge CEO 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.

The Edge was represented by Messrs Kanesalingam & Co while KomarkCorp was represented by Messrs Chong + Kheng Hoe.