SINGAPORE (May 16): Brokerage firm KGI Securities had filed Suspicious Transaction Reports (STRs) for three of 20 trading accounts allegedly manipulated by the masterminds behind the 2013 penny stocks crash, the court heard on Thursday.
During examination-in-chief by Deputy Public Prosecutor David Koh, KGI Securities’ Head of Risk, Tan Seow Kiat, said three third-party cheques had been issued as cash collateral for trading accounts belonging to Ooi Cheu Kok, Nelson Fernandez, and Lim Kuan Yew in AmFraser Securities as it was known, prior to a takeover by KGI in 2015.
However, the source of the cheques were from accounts belonging to former IPCO International CEO Quah Su-Ling, who is one of the accused persons in the trial, Soh Key Chai and Neo Kim Hock respectively.
Quah, and John Soh Chee Wen, with whom she is alleged to have been in a relationship, are accused of the manipulation of three stocks -- Blumont Group, Asiasons Capital (now known as Attilan Group) and LionGold Corp – back in 2013, leading to the crash. Soh faces 189 charges of stock manipulation, cheating and witness tampering and has been on remand since November 2016. Quah faces 178 charges of stock manipulation and cheating.
The third-party cheques in question, issued on three separate dates in January and February 2013, were subjected to due diligence checks to establish a relationship between the issuers and the receivers, said Tan.
“Were you able to establish a relationship between the third-parties and the account holders?” asked Koh. “No we were not, and in accordance with policies and procedures, we filed STRs for those accounts,” Tan answered.
However, under cross-examination by Senior Counsel N. Sreenivasan, Tan revealed that all three STRs were only filed on March 14, 2013. Pressed as to why they were filed only several weeks after the cheques were processed, Tan was unable to comment as it was not within his purview to comment, nor was he a part of the compliance function which filed the STRs.
He also revealed that when he was hired as credit manager on October 16, 2013, the task given to him was to review the policies and risk frameworks of AmFraser.
“Shortly after I joined, the immediate task given to me was to very quickly review the policies and risk frameworks. The firm was under a lot of audit pressure from the Singapore Exchange, AmFraser head office, and the Monetary Authority of Singapore, and for almost a year I was busy handling the policies and framework,” he said. He added that the increased pressure from the auditors and regulators was due to the crash, and that the brokerage had taken a very serious view of the lack of controls and risk frameworks that could have allowed the crash to happen.
Tan remained relatively calm even under repeated questioning by the defence and when Quah’s lawyer, Philip Fong said, “It’s good to see you again”, Tan replied, “I’m not too sure about that”, eliciting laughter from the court.
Hearing resumes on Friday before Justice Hoo Sheau Peng.
2013 Penny Stock Crash
John Soh Chee Wen is the alleged mastermind behind the penny stock crash of 2013, which prosecutors have called “the most audacious, extensive and injurious market manipulation scheme ever in Singapore”.
Together with his alleged co-conspirator and girlfriend Quah Su-Ling, Soh and his associates are alleged to have been behind the massive rise and sudden collapse of shares in Blumont Group, LionGold Corp and Asiasons Capital (now Attilan Group), which wiped out some $8 billion in market value.
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Don’t miss out on these highlights in the penny stock saga so far:
- John Soh, alleged mastermind behind penny stock crash arrested; to be charged on Friday
- John Soh, Quah Su-Ling and Goh Hin Calm set to be charged
- John Soh Chee Wen and Quah Su-Ling charged in largest market manipulation scheme in Singapore’s history
- Charges slapped on masterminds of penny stock scheme cast new light on old reports
- Prosecutors confirm links between ISR Capital and John Soh
- John Soh-linked ISR Capital’s CEO Quah Su Yin resigns
- Penny stock saga’s alleged mastermind John Soh denied bail; faces total of 188 charges
- John Soh could face longest-ever jail term for financial crime in Singapore
- John Soh's legal team from WongPartnership discharges itself
- John Soh's 'treasurer' Goh quits as interim CEO of IPCO
- Defence lawyers for alleged masterminds attempt to pin 2013 penny stock crash on forced selling
- 2013 penny stock crash case to go to trial
- Alleged 'treasurer' Goh Hin Calm to testify against Soh, Quah
- Penny stock crash scandal's 'treasurer' sentenced to three years' jail
- Goh Hin Calm confirmed as prosecution witness as penny stock crash trial kicks off
- The charismatic bankrupt who allegedly pulled the strings behind Singapore's largest stock manipulation scandal
- Inner workings of penny stock scandal revealed by first prosecution witness
- Prosecution witness coached by investigating officer, claims John Soh's lawyer
- Quah Su-Ling's lawyer accuses prosecution witness of 'inventing evidence', front-running
- Ex-remisier admits to conducting trades without third-party authorisation from account holders
- Ex-remisier Ng denies being coached; RHB trader Alex Chew admits to telling the whole truth only in third statement
- 'Fearful' prosecution witness admits even third statement might not have been the whole truth
- John Soh gave presentation on 'mothership' Blumont at LionGold's offices, says prosecution witness Andy Lee
- Prosecution witness Lee accused of lying and concealing facts in court
- New witness claims Quah Su-Ling was 'hysterical' when asked about settlement of losses
- More telephone records reveal Quah's hand behind trades; private bank Coutts wrote off $4.7 mil from penny stock crash
- Witness shocked by alleged breaches in trading regulations
- SGX restrictions could have caused 2013 penny stocks crash, says Lim & Tan director
- John Soh's former girlfriend had full control of bank account used in trading, court hears
