KUALA LUMPUR: CTOS Digital Bhd today said they have all the relevant licenses needed to provide credit rating scores.
Its group chief executive Eric Hamburger said the agency has a license under the Credit Reporting Agency Act of 2010 (CRA), that is covered under the Act.
"We are allowed to provide credit scoring."
"We have co-created this with data from Bank Negara Malaysia and other sources of information. So, it is under the purview of the CRA Act, that we are allowed to provide the score," said Hamburger.
The company's shares came under heavy selling pressure today, after the High Court ruled in favour of Suriati Mohd Yusof in a suit filed against subsidiary CTOS Data Systems Sdn Bhd, citing breached duty of care owed to Suriati as well as overstepping the functions it was registered for.
High Court Judge Datuk Akhtar Tahir ruled that the CRA Act 2010 governing CTOS does not empower it to formulate a credit score or to create its own criteria or percentage to formulate a credit score.
The company's share price hit a low of RM1.06 a share during trading, below its 52 week low of RM1.27 a share.
CTOS Digital's share price closed almost 14 per cent lower at RM1.25 a share today. Some 247.5 million shares changed hands, making it the most actively traded stock today.
Despite the ruling by the Judge, CTOS Digital said it is business as usual for the company.
"There is no injunction by the judge that precludes us or impedes us from continuing our operation in providing credit scores and other types of analytics on the data that we manage,"said Hamburger.
CTOS Digital has to go through a yearly renewal cycle to keep its license to provide credit reporting services and the last renewal was in September 2023.
About 13 per cent to 15 per cent of the company's revenue comes from credit scoring-related streams.
Hamburger said CTOS Digital is audited every year for compliance and its credit-scoring product has been around for over 10 years.
He added that credit reporting agencies worldwide collect data from various sources, analyse it carefully, and then provide it to help people and companies make informed credit decisions.
"This practice is not just in Malaysia, it is common globally in the credit reporting business."This is a very regulated industry in which we are audited every year by the regulators, and registrar, that is under the Ministry of Finance," he told a virtual media briefing via Zoom.
He went on to say that CTOS has won 12 defamation cases in the past and is very confident that in this case the company is in a good position to appeal against the High Court decision.
There are another five such cases against it.
"When it comes to defamation cases, our track record is pretty clear, with the exception of this existing case, which gives us solid ground for an appeal," said Hamburger.
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