Several brokers — supposedly once part of John Soh Chee Wen’s inner circle — became “paranoid” of being seen in the latter’s company following the 2013 penny stock crash.
“Many of these people were — to put it crudely — paranoid of being seen communicating with me because they knew I was in the spotlight,” said Soh, the alleged mastermind of the share manipulation scheme during his cross-examination at the High Court by Deputy Public Prosecutor (DPP) Teo Guan Siew on June 15.
These concerned brokers include Gabriel Gan Tze Wee and Henry Tjoa Sang Hi, who had gone to the extent of getting Soh a disposable phone to connect with him.
Gan was formerly a broker with DMG Securities while Tjoa had been a remisier at Phillip Securities in the lead up to the crash. Both Gan and Tjoa had testified against Soh earlier in the trial, among the dozens of others.
Soh and his co-accused and romantic partner Quah Su-Ling are on trial for allegedly orchestrating Singapore’s largest share manipulation scheme between 2012 and 2013 involving three stocks: Blumont Group, Asiasons Capital (now Attilan Group) and LionGold (renamed Shen Yao Holdings). The eventual collapse of these counters — collectively referred to as BAL — in October 2013 had destroyed some $8 billion in market value.
‘Do some things’
Soh has, during the course of the trial, referred to Gan and Tjoa as “rogue brokers” who had “admitted to their cooperation and alliance” which had begun sometime in July 2013, he said during his examination-in-chief. By saying so, Soh is putting a distance between himself and these brokers.
However, DPP Teo put forth several instances where Soh had seemingly been working together with them even after the crash, to recoup their losses together. In one instance, Gan is seen telling Soh that both of them should attract Tjoa to “do some things,” like exploring foreign exchange (forex) opportunities seeing as he had been working very hard at that time.
Soh also said that Tjoa was interested in a forex lead that had been brought by Peter Chen Hing Woon. Chen was a close associate of Soh and was the former director of business and corporate development at LionGold.
The deal eventually fell through and Tjoa went on to pursue other opportunities, the court heard.
Even as Soh was discussing possible ventures into forex, he stressed that he had personally not gotten involved. This was because he did not have the money to do so, he explained, and that he had merely shared it with Tjoa to “attract him to do something”.
In another instance, Soh was seen to be telling Gan about a bit of cash coming in from the sale of some things “here are there”. Here, he appeared confident of raking in some $3 to $5 million in cash from these sales within two to six months.
When pressed about this, Soh reckoned these funds could have been from investments in Indonesia and some small Australian counters that he had proposed to some friends.
Taking care of Gan and Tjoa
Soh’s forex explorations and the sale of counters was a bid to “take care” of Gan and Tjoa. It was also to help them get back on their feet and rebuild their finances after suffering trading losses in the wake of the crash, he added.
“I think my thoughts after the crash, your Honour, was towards the few who were still positive enough and willing enough to work hard to make, if you will, a comeback,” said Soh, who added that Gan and Tjoa’s attitude portrayed them as being “amongst the very few” individuals who were willing to work hard for this comeback.
However, Soh said his efforts to help Tjoa and Gan was in no way meant to reflect the level of friendship they had or have. “I just want to be very clear, your Honour, that part of the group I was hoping to rebuild, these were the people I thought after the crash, they still had the energy”.
“Yes, help them, help myself as well,” Soh acknowledged when DPP Teo suggested he was close enough to be prepared to motivate and help Tjoa and Gan.
DPP Teo went on to suggest that Soh had been doing this since Gan, Tjoa and even Ken Tai Chee Ming, another of the brokers closely involved in the alleged share manipulation, had been taking trade instructions from Soh and conducting market rolling in his nominee accounts across several brokerage houses.
“I disagree. I disagree totally,” Soh replied. He also said it was “not true and not correct” that he had continued to work with the brokers after the crash because he knew perfectly well what trades they were doing in the accounts controlled by him.
Bolster lines
During the course of his cross-examination, DPP Teo showed the court several instances where Soh had received updates — either via text or email — on trades that had been administered under various accounts.
For instance, Soh claims he received several emails from Michelle Neo, the then secretary of the Lakeview Club in Malaysia, a favourite hangout of the accused and many of his associates, containing a spreadsheet of sorts that seemed to be tracking the number of shares due in various accounts, under various brokers.
“I don’t think so,” was Soh’s response on whether the spreadsheet was meant to contain trades shared with him in the past weeks. Soh also disagreed totally when DPP Teo put it to him that he had been monitoring shares due in different controlled accounts, including those under Phillip Securities that had been managed by Tjoa.
In another instance, DPP Teo suggested that Soh had used his associates’ accounts with Saxo and Interactive Brokers to lessen the load of his trading done with his controlled accounts at local brokerages.
Soh denied this saying that he had been looking to reduce costs. “It is not meant, as your case says, to bolster lines. This is to reduce trading lines,” he retorted.
“No, no, those are your words Mr Soh, ‘bolster lines’, not my words, it’s your words,” DPP Teo replied.
“Your case is we don’t have enough lines so we open all these things,” stressed Soh. Unlike DPP Teo’s position that he was aware of the trading volume to reduce the load of his rolling, Soh said that he kept tabs on the situation when the likes of Neo informed him of how aggressive or exuberant they were on the performance of the counters. “And I figured this would help them save at least a third of their commissions,” he added.
Goldman accounts
In his cross-examination, DPP Teo also tried to get Soh to agree that he was more involved in the accounts with Goldman Sachs belonging to the various associates involved than he would say.
The court was shown earlier in the trial how short selling of BAL shares held as collateral by Goldman had triggered the crash in early October. These share financing accounts belonged to Quah and James Hong, Blumont’s former executive director. As a result of the crash, Quah and Hong owed Goldman tens of millions of dollars each.
Besides the accounts with Goldman, several accounts at Interactive Brokers under the names of Neo Kim Hock, Tan Boon Kiat and Peter Chen were also apparently used.
The way DPP Teo put it, Soh and Quah opened these accounts under these other people’s names knowing that they would not be the ones controlling or placing trading instructions via these accounts, to which Soh disagreed.
“And through these accounts, you and Ms Quah obtained financing from Goldman Sachs and Interactive Brokers,” said DPP Teo. “Disagree,” said Soh.
“You and Ms Quah were responsible for the provision of BAL shares as collateral to Goldman Sachs and Interactive Brokers, both in the form of the shares initially deposited as collateral as well as in the form of additional collateral constituted by the shares that were subsequently purchased,” said DPP Teo. “Disagree,” said Soh.
“You and Ms Quah agreed to conceal from Goldman Sachs and Interactive Brokers the truth that you were engaging in the course of conduct, a purpose of which was to create a false appearance as to the market for BAL shares. Do you agree or disagree?” said DPP Teo. “Disagree,” replied Soh.
“You and Ms Quah knew that Goldman Sachs and Interactive Brokers would not have accepted BAL securities as collateral if they had known the truth,” said DPP Teo. “Disagree,”replied Soh.
“You and Ms Quah used the financing provided by Goldman Sachs and Interactive Brokers to purchase BAL shares as part of your ongoing scheme to manipulate the market for BAL shares,” said DPP Teo.
Again, Soh replied: “Disagree”.
The trial continues with re-examination by Soh’s defence counsel, N Sreenivasan of K&L Gates Straits Law.
Photos: Albert Chua/The Edge Singapore
