Tuesday, 2 August 2011

The Edge loses Defamation suit

In my humble view, only 3 really good things happened for Minority Investors in the last 20 years:

  • Quarterly Reporting: investors get four times a year a snapshot of the condition of the company instead of two times a year. In angel investing I insist on monthly updates, both in numbers and a short write-up. If small, start-up companies can do this, surely large, listed companies can deliver the same?
  • The Bursa Malaysia Website: BM website. It could be improved here and there, but overall simply very good, much better than similar websites in other countries. No information is deleted so interested investors can go back in time what really has happened in the past. A treasure trove for the investor who likes to dig deep.
  • The Edge: finally a print media that dares to come up for the Minority Investor, also the only one that actually published some of my letters. The Edge is popular in Malaysia, much more than its counterpart in Singapore for the simple reason that in Singapore there are much less Corporate Governance issues. Also, the daily Singaporean newspapers are much more open about corporate issues that arise.
I therefore was shocked when I read (The Edge, August 1 2011, Page 6) that High Court Judge Datuk Zaleha Yusof found that The Edge Financial Daily’s article entitled “Ascot given preference due to its experience, says MoF” published last July, had defamed Awang Adek. The damages are to be assessed by a court registrar. The news article was based completely on a written reply issued by the Ministry of Finance (MoF) to Parliament in July last year, with no editorial opinion attached. However, it was erroneously attributed to Awang Adek instead of the MoF, of which Awang Adek is the deputy finance minister. MoF’s written reply was also published by other news organizations, including two internet news portals and one English daily newspaper. In his letter of demand, Awang Adek sought damages totaling RM 10 million, cost and an “adequate apology” from the defendants. The Edge Communications had argued that Awang Adek was attempting to distance himself from his responsibilities as an officer and deputy minister of the finance minister, a claim which Awang Adek has denied. The Edge Communications had promptly issued a correction in The Edge Financial Daily on July 9, 2010, and a personal letter of apology to Awang Adek as a gesture of good faith.

I definitely hope that The Edge will win its appeal. I don't understand the verdict, nor why The Edge was singled out. Also, why is the court ruling done so fast when other cases have been dragged on for so long time?

I don’t know about the financial health of The Edge, but I guess that 10 million might wipe them out, so things could look pretty bleak if their appeal is rejected.

And if certain parties get what they want, then we might also lose the quarterly reporting.

Worrisome developments in Malaysia…..

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