“This includes urgently applying for the necessary prohibitory injunctive orders to stop further derogation of the company’s rights over those shares,” it said in a filing with Bursa Malaysia yesterday.
The company stated the injunction application against IT company EA Holdings was scheduled for a hearing on Wednesday (Aug 2), during which the court granted an interim injunction.
VinVest became a significant shareholder of EA Holdings in November 2021 by purchasing 1.1 billion shares. It represented a 17.82% stake in EA Holdings, at a price of 2.11 sen per share, amounting to a total of RM23.21 million.
In a separate statement, EA Holdings said it was served with the writ and a notice of injunction application by VinVest on Tuesday (Aug 1).
“The injunction application was called up for hearing on Aug 2. An ad interim injunction was granted by the High Court,” said EA Holdings.
Both companies said the lawsuit would not have any significant financial or operational consequences.
VinVest names analyst as defendant
The company has included a 30-year-old stock market analyst from Ipoh as the second defendant in the suit over the alleged loss of its 17.82% stake in EA Holdings.
In a recently filed statement of claim, VinVest said the analyst in question was recommended by EA Holdings.
It asserted that the analyst possesses extensive connections with market remisiers and brokers.
Additionally, VinVest contended that the 1.1 billion EA Holdings shares, initially held in Maybank Investment Bank Bhd’s central depository system account for safekeeping purposes and not intended for trading, were under the defendants’ responsibility to safeguard the company’s interests.
It said the analyst proposed the opening of a second CDS account around May, leading to the establishment of an account with TA Securities Holdings Bhd on May 22, into which all EA Holdings shares were transferred.
Subsequently, between June 23 and July 11, VinVest observed that the entirety of these shares had been liquidated through the TA Securities CDS account via open market transactions.
VinVest asserted that fraudulent and unauthorised sales of EA Holdings shares occurred at an unusually low price of half-a-sen per share, totalling RM5.486 million.
The company deemed it irrational to sell the shares at 0.5 sen per share, considering this price is significantly below the initial purchase price.
Reports lodged
VinVest stated that despite attempts to contact the stock market analyst, they were unable to locate him.
The company subsequently reported the matter to the Securities Commission, police, and Bursa Malaysia between July 17 and 21.
VinVest is seeking a declaration that the transfer of the 1.1 billion shares from its TA Securities account, whether through open market or off-market transactions, be deemed null and void.
Additionally, it is seeking a declaration of the illegality of the trade and transfer of shares on June 23, with confirmation that VinVest retains ownership of the shares.
It is also seeking general damages to compensate for the losses incurred due to the alleged fraudulent sales and unauthorised transactions resulting from the illegal instructions.