SINGAPORE: Malaysian businessman John Soh Chee Wen, the alleged mastermind of the 2013 penny stock crash in Singapore, was on Friday (Nov 25) slapped with 181 charges for his role in manipulating the stock market.
Soh’s close associates and alleged accomplices, Quah Su Ling and Goh Hin Calm, face 178 and six charges respectively. Like Soh, most of their charges are for false trading and market rigging under the Securities and Futures Act.
The trio were arrested on Thursday morning after a lengthy investigation in the wake of the 2013 crash.
The crash involved three entities – Blumont Group, LionGold and Asiasons Capital (now known as Attilan Group) – which saw huge run-ups in their share prices turn them briefly into billion-dollar businesses.
The companies’ shares crashed in a frenzied 40 minutes of trading on Oct 4, 2013 and plunged further when trade resumed after a brief suspension, losing more than S$ 8 billion in shareholder value in less than two days of trade.
The Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) subsequently launched an investigation into the crash, said to be the biggest securities fraud case Singapore has seen.
In a joint release on Friday, the Attorney-General’s Chambers (AGC), CAD and MAS said a massive amount of evidence was uncovered, including “over two million emails, half a million trade orders and thousands of financial statements”.
The authorities revealed the trio controlled over 180 trading accounts – owned by 59 individuals who had given them access – to manipulate shares in Blumont Group, Asiasons Capital and LionGold shares “to create an illusion of liquidity and demand for these shares by making thousands of manipulative trades … and to control the supply of these shares available to the market to influence the price of these counters”.
In addition to manipulating the market, Soh and Quah are also accused of cheating financial institutions Goldman Sachs and Interactive Brokers LLC into extending more than S$ 170 million in margin financing to their accounts, using the manipulated shares as collateral to secure the loan.
Both Soh and Quah are bankrupt – Soh since 2002 and Quah since 2015. During the 14-month period in which the offences took place, Quah was a director and chief executive officer of IPCO International.
Prosecutors described Goh as the couple’s “key assistant” and treasurer, alleging that he controlled bank accounts containing funds related to the couple’s market-rigging scheme. Goh also enabled the couple’s manipulative activities by providing them trading accounts, which they used to manipulate shares in the three companies involved, the prosecution said.
ALLEGED MASTERMIND “A FLIGHT RISK”: PROSECUTION
In calling for bail to be denied to Soh, Deputy Public Prosecutor Teo Guan Siew argued that he was a flight risk, as he had access to substantial resources which would allow him to abscond.
DPP Teo revealed Soh told a CAD officer he had used the travel documents of an unknown Indonesian man to travel out of Singapore.
On this, Soh’s lawyer, Senior Counsel Tan Chee Meng, said he was unable to comment as he had only spent “five minutes with (his) client … in the last three months”, he told the court.
DPP Teo also argued a high bail amount for Quah was necessary to “manage the risk of her absconding with Soh”. Prosecutors allege the two have been in a romantic relationship for years and lived together, so Quah may have access to Soh’s “resources” to abscond.
Defence lawyer Kevin Lim argued that Quah, a Malaysian, was not a flight risk as her children are Singaporean. “Even if she fled to Malaysia … we have an extradition treaty. Anyway, she is bankrupt and unable to start her life anew … her aged parents are unable to support her,” Mr Lim said.
Prosecutors called for a bail sum of S$ 1 million for their assistant Goh, given his heavy involvement in the scheme.
His lawyer Nicholas Narayanan said the sum was “exorbitant”, given Goh was not a flight risk and is in poor health. Mr Narayanan said Goh suffers from heart disease and has undergone a number of recent operations. “If he is kept incarcerated, that may have an effect on his health and well-being,” Mr Narayanan told the court.
Soh will remain in remand until Dec 20, when his case will be heard again. Bail for Quah and Goh has been set at S$ 4 million and S$ 750,000 respectively. They will next appear in court on Jan 5.