Wednesday 24 Apr 2024
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This article first appeared in The Edge Malaysia Weekly on May 9, 2022 - May 15, 2022

MALAYSIAN businessman John Soh Chee Wen — the accused mastermind of the 2013 penny stock crash — and his co-conspirator Quah Su-Ling were found guilty by the Singapore High Court of the country’s most serious case of market manipulation last Thursday.  They have been convicted of criminal conspiracy, including false trading, price manipulation, deception and cheating.

Soh was convicted of 180 of the 188 charges faced while Quah was found guilty of 169 of the 178 charges faced. They were convicted of share manipulation and cheating charges but were each acquitted of eight charges of deception. They will be sentenced at a later date.

A joint press release by the Singapore Police Force (SPF) and Monetary Authority of Singapore (MAS) on May 5 said that, for each of the various charges, the convicted parties face a jail term of between two and 10 years. They could also face a fine of between S$10,000 and S$250,000 for the different charges.

The two “long-term partners in both business and personal affairs” had been on trial since March 2019 for orchestrating the manipulation of three penny stocks, Blumont Group, Asiasons Capital and LionGold Corp — collectively known as BAL — between 2012 and 2013. The stocks crashed in October 2013 and destroyed some S$8 billion in market value.

Now under new shareholders and management, Blumont has been renamed Southern Archipelago, Asiasons was first named Attilan Group before it was delisted while LionGold has been renamed Shen Yao Holdings.

The episode has been described as Singapore’s most serious case of share manipulation. The Edge Singapore first reported in September 2014 — a year after the crash — that Soh might have been involved. Soh and Quah were charged on Nov 25, 2016. He has been in remand since November 2016, while Quah is out on bail for S$4 million.

“Having considered the materials put before me, beyond that set out above, I am satisfied, beyond reasonable doubt, that the accused persons conspired to support” the share prices of BAL, said Justice Hoo Sheau Peng on May 5 to a packed courtroom.

The court also found that Soh and Quah carried out their conspiracies by controlling and using 189 securities trading accounts held with 20 financial institutions — both local and foreign ranging from small brokerages to global banks — and 60 individuals and corporate nominees (controlled accounts) to make thousands of manipulative trades in each of the three counters.

Through this network of trading accounts, the BAL shares were traded among one another to generate artificial liquidity and demand for the shares, to cause the share prices to rise over time, and to retain control of large amounts of shares without disclosing this to the market.  Through this they “monitored, managed and coordinated the many moving pieces of their scheme,” Justice Hoo said.

Inflating share prices

The duo adopted contra trading and wash trading to inflate the liquidity of the BAL shares. Contra trading involves buying or selling shares in a company within six months of trading or transacting in an opposite transaction while wash trading involves buying shares of a company through one broker while selling shares through a different broker.

Acting on the basis that all 189 relevant accounts were controlled, Justice Hoo referenced prosecution expert witness Professor Michael James Aitken’s evidence that wash trading pertaining to Blumont shares took place on 170 of 190 trading days. This accounted for an average of 17% of the total volume of Blumont shares traded in a day.

Meanwhile, wash trades were identified on every trading day of the relevant period of the false charges for Asiasons and accounted for a daily average of 45% of the total trading volume of Asiasons shares.

Similarly, wash trades were identified for LionGold shares on all days except one, and accounted for a daily average of 48% of the total trading volume. “These volumes of wash trading clearly support the conclusion that the accused persons’ use of the 187 controlled accounts was illegitimate,” the judge said.

In the course of their investigations, officers from the Commercial Affairs Department (CAD) and MAS raided over 50 locations and interviewed more than 70 persons. The process covered extensive documentary evidence comprising over two million emails, half a million trade orders, thousands of telephone records and financial statements.

Separately, Soh was found guilty of charges pertaining to his involvement with the management at BAL while an undischarged bankrupt. He was also convicted of the seven witness-tampering charges involving prosecution witnesses such as Ken Tai Chee Ming, Leroy Lay Chee Heong and Gabriel Gan Tze Wee, who were known associates of Soh.

“[Soh] specifically asked four witnesses to hide the truth about various aspects of [his and Quah’s] scheme from the investigating authorities,” Justice Hoo said. “[Soh] intentionally perverted or attempted to intentionally pervert the course of justice.”

This was seen from how the witnesses had acted as if they were under his instruction on five occasions although they did not comply with his instructions on three separate occasions.


The court had previously heard that Soh was supposedly one of the go-to persons to turn distressed companies around or to give investment and trading advice. He thus viewed his involvement in projects as a way to spur more investors to come on board.

For example, Soh told the court that Gan — an ex-DMG broker who helped Soh trade — thought “my so-called presence will be a catalyst to his friends’ investing”. Soh, for the most part, reciprocated the correspondence with these “friends”. “I relish the part where someone wants to communicate, so obviously, I would reciprocate,” Soh had said during his cross-examination by Deputy Public Prosecutor (DPP) Teo Guan Siew on May 31 last year.

In her judgement, Justice Hoo dismissed this by saying that the Gan’s general account on the “substantive allegations is to be preferred”, especially since his version was clearly corroborated by audio recordings. She also asserted that Soh’s “explanations, in the face of the contents of the conversations, are illogical”.

In the course of the trial, several other witnesses agreed to having received instructions on trades to be made from either Soh or Quah.

Soh rebutted these allegations when he took the stand. “I want to show that these trades have nothing to do with me and the scale of which they did would have overwhelmed the market,” he had said.

“I have no idea why in the world the rogues want to fix me,” he added, referring to the four brokers Henry Tjoa Sang Hi, Tai, Gan and Lau.

Gan and Lau were, at different points in time, brokers with DMG Securities, while Tai was running Algo Capital at the time when the alleged offences took place. Tjoa, meanwhile, was a remisier with Phillip Securities.

In his closing submissions, Teo noted that Soh had painted himself as an altruistic individual who was giving general instructions. “[Soh] was pushing the blame to everyone else” and lied that they were falsely trying to implicate him, he added.

Teo broke down Soh’s communications with the brokers — 83% or 10,662 were made by Soh to the brokers while 17% or 2,639 were made by the brokers to Soh. With this, Teo said Soh was in fact the one constantly contacting the brokers, contrary to his testimony that the brokers were the ones initiating correspondence with him in hopes of tapping his network.

Criminal conspiracy

Soh’s defence counsel N Sreenivasan disputed this in his closing submissions. “My learned friend is mistaken that Soh is altruistic, he is an egotistical person,” the lawyer said. “There is no altruism there. That is the nature of people who energise, mobilise, motivate and lead. He never said he was doing charity in this instance.”

But in her judgement, Justice Hoo said: “I am satisfied that the accused persons remained extensively involved with matters pertaining to the relevant accounts even after the crash on Oct 4, 2013.”

She added that this included negotiations of settlements with the financial institutions and the settlement of losses. “I do not accept the first accused’s characterisations of his involvement, generally, as provision of benevolent help to the account holders in a dire time of great financial loss.”

Justice Hoo also noted that participation in a criminal conspiracy is itself an offence, adding: “Given that these charges are criminal conspiracy charges, all the prosecution needs to prove in respect of each is the fact of the accused persons’ agreement to commit the offence described.”

Meanwhile, Quah had also alleged in her closing statements that the prosecution’s conduct was inappropriate. She told the court that the DPPs had failed to disclose material evidence, coached witnesses and even induced witnesses to provide evidence favourable to the prosecution.

Justice Hoo addressed this, saying: “[These allegations] distract from the substantive issues to be determined, and they have the potential to cast doubt on the fair administration of justice. In relation to these suggestions and allegations, I take this opportunity to dismiss them as entirely unmeritorious.”


Amala Balakrishner is a senior writer with The Edge Singapore

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