Komarkcorp Berhad v the Edge Communication Sdn. Bhd. (W-02(NCvC)(W)-693-04/2024)

The Appellant is a company listed on the Main Market of the Bursa Malaysia. Its group of companies are involved in manufacturing self-adhesive labels, flexible packaging materials and disposable face masks.

The Respondent is a news publisher, that publishes “The Edge”, “The Edge Financial Daily” and an online news portal.

The issue in this appeal is in respect of an article published by the Respondent on 12.4.2021 (“the Article”), which the Appellant company said had defamed them. The impugned words in the article, which is captioned as “Hidden hands behind penny stock surge under scrutiny”, read as follows (“the impugned paragraph”): The authorities, it seems, are after a group of individuals who control as many as 60 companies on Bursa Malaysia and appear to manipulate share prices and siphon out funds from these companies via numerous cash calls and subsequent acquisition of assets. Also being scrutinized are the ‘asset shuffling exercises’ undertaken by many of the companies. There is also talk that they are allegedly involved in the legitimizing of ill-gotten gains or money-laundering activities.

The Article also contained a table, listing approximately 34 companies, including the Appellant. A chart showing certain shareholdings of companies was also part of the Article.

Aggrieved by the publication of the impugned paragraph, the Appellant company instructed its solicitors to write to the Respondent complaining that the impugned paragraph had defamed the Appellant and demanded an apology.

The Respondent through its solicitors denied that the Article had defamed the Appellant. The letter, dated 16.4.2021, inter alia states as follows: [8] As such, our client denies your client’s allegations in your aforesaid letter and denies that your client is entitled to any retraction and apology. Further, as our client has not defamed your client, there is no basis for the request for the written assurance, undertaking and the indemnity on the terms demanded. [9] If your client wishes our client to publish a statement by your client on this topic, our client will publish the same in accordance with its normal editorial policies.

The Appellant then filed the claim in defamation against the Respondent.

After a full trial, the learned High Court Judge dismissed the Appellant’s claim on 26.3.2024.

In her grounds of judgment, the learned Judge listed three main reasons in dismissing the Appellant’s libel claim.

First, the learned Judge was of the view that the Article does not refer to nor defame the Appellant. The learned Judge accepted the Respondent’s explanation that the Article merely showed the authorities were investigating a group of individuals suspected of using the Appellant and other companies for unlawful purposes. According to the learned Judge, there were “neutrality and objectivity” in the impugned paragraph which indicated responsible journalism.

In short, since the impugned paragraph was not directed at the Appellant, it could not be said to be defamatory of the Appellant. If at all, the impugned paragraph could only have possibly referred to the group of individuals behind stock price manipulation by using certain listed companies (including the Appellant) as their vehicles.

Secondly, the learned Judge found that there was no malice on the part of the Respondent in publishing the Article. According to the learned Judge, the information on the alleged unlawful activities, if at all, was sourced from reliable sources from the industry and related enforcement agencies. In any event, the learned Judge took cognisance that even though the Appellant was given the opportunity to publish a statement in response to the allegation, they elected not to respond. In this regard, it is perhaps relevant to mention that at paragraph 7.4 of the Judgment, the learned Judge held, “The defendant, on 16.04.2021, in response to the plaintiff’s notice of demand dated 13.04.2021, offered the plaintiff an opportunity to publish a statement of reply but was ignored”.

Thirdly, there was no compelling evidence found by the learned Judge that the impugned paragraph had adversely impacted the Appellant’s trading reputation. The learned Judge, citing Mak Khuin Weng v Melawangi Sdn Bhd [2016] 5 AMR 115 CA as an authority, was of the view that for a company to sue in defamation, the words complained of must injuriously affect the corporation as distinct from the individuals behind the company.

It was the finding of the learned Judge that the Appellant did not adduce any tangible or compelling evidence to establish that the impugned paragraph had adversely impacted its trading reputation.

According to the learned Judge the aforementioned grounds were sufficient to dismiss the Appellant’s claim.

Notwithstanding the above findings, and for the sake of completeness, the learned Judge also addressed the defences of justification and qualified privilege raised by the Respondent.

In paras 10 and 11 of its Defence, the Respondent averred as follows: [10] The Defendant contends that the Impugned Words meant and were understood to mean the following (the

10.1 There is an investigation by the authorities against a group of individuals who are suspected of utilizing the Plaintiff and other companies for unlawful purposes; and

10.2 This said group of individuals are believed to be behind the stock price manipulation, the shuffling of assets and other unlawful activities, whom the authorities are in the process of locating. [11] In so far as the Impugned Words bore the Justified Meanings, they were true in substance and fact.

The learned Judge further accepted that the Respondent had succeeded in raising the Lucas-Box Justification as a defence by ascribing and proving the Respondent’s intended meaning of the impugned paragraph. The learned Judge found, the Respondent had obtained information that the authorities did in fact conduct a raid on several offices in Menara Lien Ho in Persiaran Tropicana.

As to the defence of qualified privilege, the learned Judge found that the Respondent was entitled to qualified privilege as a defence on the grounds of public policy.

In accepting the Respondent’s Reynolds Defence in the context, the learned Judge found as follows:

The thrust of the Article was to notify the public of a group of individuals’ illicit activities.

The information was from reliable sources, particularly the two regulators who conducted the raid.

The Article was published relatively, neutrally and fairly.

The Article was not directed at the Appellant but to the group of individuals. In the circumstances, there was no requirement to seek verification from the Appellant or other companies listed in the Impugned Article.

The Appellant was given the opportunity to respond and for it to be published but elected to ignore it.

The Article and the impugned paragraph were published without any malice of the Respondent’s part. There was no compelling evidence of any malicious intent. There were no particulars of malice either. O 78 r 3(3) of the Rules of Court 2012 (“ROC”) requires the Appellant to give particulars of the facts from which malice can be inferred.

For the aforesaid reasons, the learned Judge dismissed the Appellant’s claim with costs of RM35,000.

Before us, learned counsel for the Appellant submitted that the impugned paragraph did indeed refer to the Appellant. Our attention was then drawn to the following part of the impugned article: Also being scrutinized are the ‘asset shuffling exercises’ undertaken by many of the companies. There is also talk that they are allegedly involved in the legitimizing of ill-gotten gains or money-laundering activities.

Learned counsel further submitted that the Respondent in the impugned paragraph alleged that the Appellant company is purportedly controlled by the individuals who were involved in manipulating the stock market and money laundering activities. According to learned counsel, this “clearly reflects on the Appellant”.

What is more important, learned counsel submitted, is that the impugned paragraph was directed at the individuals who purportedly controlled the Appellant. Learned counsel then invited us to conclude that the alleged acts of “cash calls”, “acquisition of assets” and “money laundering” are in effect the acts of the Appellant.

In short, it is the Appellant’s case that the impugned paragraph referred to the Appellant.

Secondly, in further arguing that the impugned paragraph was defamatory learned counsel submitted that to an ordinary man, the Impugned Article in its entirety has a strong tendency to infer, inter alia, the following:

The Appellant has unlawfully channelled funds out of the company.

Any purchase of assets by the Appellant is for unlawful or illegal purposes.

The Appellant is involved in the activity of legitimising ill-gotten gains.

The Appellant is involved in money-laundering activities. 11 27. It is for these reasons that learned counsel for the Appellant submitted that the impugned paragraph was calculated to expose the Appellant to hatred, ridicule or contempt that would tend to lower the Appellant in the estimation of right-thinking members of society. The allegations levelled against the Appellant according to learned counsel was suggestive of conduct that may potentially have penal consequences.

In the circumstances, learned counsel urged this Court to conclude that the learned Judge had erred in:

Concluding that the impugned paragraph did not refer to the Appellant; and

Failing to proceed to determine whether the impugned paragraph is defamatory.

We begin by reiterating the law as stated by Lord Donovan in the Morgan v Odhams Press Ltd [1971] 1 WLR 1239 HL that it is always for the plaintiff to prove that the defamatory words were published of and concerning him. The onus is firmly upon him, and if he does not discharge it, he has no cause of action.

The same proposition can also be seen in the earlier judgment of the House of Lords in Knupffer v London Express Newspaper Ltd [1944] AC 116 HL, where it was held that it is an essential element of the cause of action for libel that the words complained of should be published “of the plaintiff”. What if the plaintiff is not named? The House of Lords was of the view that the test is whether the words would reasonably lead people acquainted with to the conclusion that he was the person referred to.

In the instant appeal, the question that arises is, was the Appellant mentioned in the Impugned Article in the manner that was calculated to lower the Appellant in the estimation of right-thinking members of society? PW-1, who is the executive director of the Appellant, in his evidence testified that the Appellant’s name was mentioned in three places in the Article – in the table of companies, the shareholding chart and because “Fintec Global owns shareholdings in the Appellant company”.

Learned counsel for the Appellant’s line of argument is that the allegations of the manipulation of the stock market and money laundering activities “clearly reflects on the Appellant”. With respect, in our view, the impugned paragraph should not be read in isolation and devoid of its context. On the contrary, the Article must read as a whole so that the impugned paragraph is read in its proper context. On this, we adopt the judgment of the Richard Malanjum J (as the former CJ then was) in Tun Datuk Patinggi Haji Abdul Rahman Ya’kub v Bre Sdn Bhd [1996] 1 MLJ 393: Further, the words complained of must be considered as a whole, bearing in mind, inter alia, the context in which they were used (see Gatley on Libel and Slander (8th Ed) para 102 at p 102 and Institute of Commercial Management United Kingdom v New Straits Times Press (Malaysia) Bhd [1993] 2 MLJ 408) . In the case of Capital and Counties Bank v Henty

7 App Cas 741 at p 745 Lord Selborne LC said this: The test according to the authorities is whether, under the circumstances in which the writing was published, a reasonable man to whom the publication was made would be likely to understand it in a libellous sense.

The Federal Court in Dato’ Sri Dr Mohamad Salleh bin Ismail & Anor v Nurul Izzah bt Anwar & Anor [2021] 2 MLJ 577 FC reiterated the aforesaid proposition in the following manner: In our respectful view, this was not really a bane and antidote situation. It was rather a case of whether upon a consideration of the entire statement, and not just a minor part, there were matters which were defamatory of the appellants. This was a question of fact to be determined and assessed by the standard of the ordinary, reasonable and fair-minded reader or viewer. In short, the issue really is: how would such a reader or viewer assess the statement.

Applying the law to the facts under appeal, we do not think that we should, as submitted by learned counsel for the Appellant, read the last two sentences of the impugned paragraph devoid of the context of the whole of the Article. On this we respectfully agree with the submission of learned counsel for the Respondent that such references to the Appellant are incidental to and peripheral to the main thrust of the Article – that is - a group of individuals who are suspected of utilizing the Appellant and other companies for unlawful purposes.

In short, the particeps criminis is not the Appellant company, but that “group of individuals”. In any event, the learned Judge has also made a finding of facts that the enforcement authorities were investigating a “group of individuals” suspected of using the Appellant and other companies for unlawful purposes. There was no evidence before the High Court that the Appellant itself as a corporation was subject to any investigation. In our view, the Article, when read as a whole would have conveyed to the average and reasonable minded reader, not avid for scandal, that the Appellant was a “victim” of the shenanigans and nefarious activities of a group of individuals.

It is for these reasons that we respectfully agree with the learned Judge that the impugned paragraph did not refer to the Appellant.

But even if the impugned paragraph referred to the Appellant and assuming that they are defamatory (of which no finding is made here), the alleged sting contained in the last two sentences of the impugned paragraph, has been effectively neutralised by the context of the Article when viewed as a whole.

Learned counsel for the Appellant took umbrage that the learned Judge had failed to proceed to determine whether the impugned paragraph is defamatory. With respect, we do not think that the learned Judge had fallen into error. Once a Judge has made a finding of facts that an impugned statement does not refer to the plaintiff, there is no necessity to make a further finding whether the statement is defamatory or otherwise.

In arriving at the said proposition, we need only refer to the judgment of Viscount Simon LC in Knupffer: My Lords, it is an essential element of the cause of action for defamation that the words complained of should be published "of the plaintiff." If the words are not so published, the plaintiff is not defamed and cannot have any right to ask that the defendant should be held responsible to him in respect of them.

For the aforesaid reasons, our conclusion is as follows:

The impugned paragraph, did not refer to the Appellant.

Reading the Article as a whole will show that the Appellant was not the participant of the alleged crime. On the contrary, the Appellant was the victim of an alleged crime which was perpetrated or orchestrated by a group of individuals who were then under investigation by the enforcement authorities.

The offending words in an article alleged to be defamatory should not be read in isolation. Reading an impugned article as a whole is of importance in order to determine whether the sting contained therein has been neutralised by the context, as in this case.

Once a finding of fact has been made that the impugned words do not refer to a plaintiff it is unnecessary for a trial judge to make a further determination whether the offending statement is defamatory.

We therefore do not find any appealable error made by the learned Judge that warrants appellate intervention.

In view of our finding as stated above, we do not think that it is necessary for us to address the defences raised by the Respondent.

The appeal is dismissed and the decision of the learned Judge is hereby affirmed. The Appellant is ordered to pay costs of RM20,000.00 (subject to allocatur). Date: 31 July 2025 - Sgd - (WAN AHMAD FARID BIN WAN SALLEH) Judge Court of Appeal Counsel/Solicitors Appellant Alex Tan Chie San Tan Su Ning (Messrs. Terrence Lee & Co) Respondent K. Shanmuga Natalie Jong Ling Li (Messrs. Kanesalingam & Co)