CTOS court win alleviates overhanging business risk, say analysts

KUALA LUMPUR: Analysts are revising higher their valuations for CTOS Digital Bhd as the group's recent court victory has removed overhanging fears over its business model. Read full story

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KUALA LUMPUR: Analysts are revising higher their valuations for CTOS Digital Bhd as the group's recent court victory has removed overhanging fears over its business model. CTOS yesterday announced that the Court of Appeal had overturned a March 11, 2024, High Court case ruling that claimed the group was not legally empowered to formulate credit scores and was not provisioned in the Credit Reporting Agencies Act 2010. The three-member bench chaired by Justice Lee Swee Seng unanimously ruled that credit reporting agencies do not owe a duty of care in common law.

Credit reporting agencies also may formulate and publish credit scores as part of their business of credit reporting pursuant to the provisions of the Credit Reporting Agencies Act. In addition, the Court of Appeal ruled that the plaintiff, Suriati Mohd Yusof, had not made out a case in defamation, negligence or breach of statutory duties against CTOS Data Systems Sdn Bhd, a subsidiary of CTOS. The court had further dismissed the plaintiff’s cross appeal.



Shares in CTOS rallied on Tuesday following the decision, ending seven sen or 5.07% higher at RM1.45 apiece as investors welcomed the announcement.

However, the rally has so far failed to continue on Wednesday with the share price staying unchanged at RM1.45 as at 9.30am.

"This is a positive win for CTOS but we reckon that the market has baked in a victory ahead of today’s court outcome; this is because its price had recovered to RM1.45 a share from a low of RM1.05.