Good stories, not manipulations, behind interest in penny stocks, claims Soh

“The prosecution’s case has al­ways been that LionGold has been a penny stock. LionGold was never a penny stock. It was destroyed into a penny stock,” said Soh. With all the gold-min­ing assets it had acquired, LionGold could not claim to be a penny stock, he added.

Taking the stand in the long-running trial, Soh spent the past few full-day hearings justifying his role in promoting the shares of LionGold, and to a lesser extent that of Blumont, as investments. Under examination in chief by his lawyer N Sreenivasan, Soh also rebutted some of the testimonies made by prosecution witnesses.

Soh faces 188 charges of share manipulation, cheating and witness tampering while co-accused Quah Su-Ling faces 177 largely similar charges. When the share prices of the so-called BAL stocks crashed in early October 2013, some $8 billion in market value was destroyed.

Confidence in being rewarded

Soh had earlier told the court how he had gone through the cycle of starting out empty-handed, making his millions and going bust before repeating the whole cycle a couple of times. It was when he became bankrupt after the Omega Securities saga in Bursa Malaysia in the 1990s that he decided to make a “comeback” and grow LionGold as he did not want to “surrender to his fate” and “go off into the sunset”.

Sreenivasan pointed out that even if Soh had helped LionGold do well and its share price had gone up, Soh would not have benefitted as he did not own any shares — unless he controlled the shareholders or owned shares through nominees. This was because Soh’s only apparent formal link to the three companies was that he was an “adviser” to LionGold’s chairman.

In reply, Soh said he had “innate confidence” that shareholders, directors and interested parties like Nik Ahmad Kamil, former Malaysian finance minister Abdul Daim bin Zainuddin and his son Md Wira Dani would appreciate his role as the “architect” and reward him accordingly.

The court also heard there was no formal contract between Soh and the shareholders and directors of LionGold.

“Isn’t it a bit naïve to just put in so much time and effort — actually dedicating two, three, four years to this — on the pious hope that people who make money will behave like gentlemen?” asked Sreenivasan.

Soh agreed. “But that’s what makes me a compelling salesman. I believe in what I’m talking about. I believe in what I’m selling. There will always be people who don’t come true to form, so be it. But the ones who do come through more than make up for the ones who don’t. That has always been what guided me through my life. I’ve had reasons to regret many times but c’est la vie,” said Soh.

Asiasons and Blumont

In contrast, Soh told the court he did not promote Asiasons the way he did with LionGold although he did eventually agree to promote Blumont. He claimed that although he told those who had asked about Asiasons not to buy its shares, the stock price kept going up.

“The typical mindset of people who trawl for tips is — perhaps I’m quietly collecting and not telling them. Eventually, I got a bit wiser and I refrained from telling them to buy. ‘If you want to buy, buy.’ I won’t say anything wrong against it,” said Soh.

He also told the court he only started promoting Blumont after its executive chairman Neo Kim Hock became interested in mining as well and wanted Blumont to be more than just a property play, which for years had “nothing to shout about”.

According to Soh, Neo wanted him to do something similar for Blumont. “My riposte to him was, ‘Don’t touch gold’ because that would put me in a position of conflict,” said Soh, who finally agreed around the first quarter of 2013 to be Blumont’s adviser but to start in that role only a year later after LionGold was expected to be on a firm track.

In an August 2013 announcement, Blumont said it is was adding mining as one of its core businesses and changing its name to Blumont Phoenix. That sparked even more excitement for Soh’s close associates like Dick Gwee Yow Pin and Ken Tai Chee Ming, he said. They had interpreted the name change as Soh going “full tilt” into Blumont because “phoenix” was feng in Chinese which was also the name of Soh’s late wife and they thought the company was being renamed in her honour. “They might have taken that as a signal to go gaga. I don’t know. I’m just speculating,” said Soh.

Rio Tinto of Asia

While Soh spent a lot of time justifying the value of LionGold, he did not believe Blumont had the same kind of intrinsic value. Instead, Soh saw Blumont’s lofty share price as “aspirational” that may or may not be achieved in the next few years. Before Soh took the stand, expert witness John MH Ellison of FTI Consulting had estimated Blumont to be overvalued by 3,112% as at Oct 1, 2013.

Yet, according to the testimonies of multiple previous witnesses, at a crowded presentation at LionGold’s office on Sept 26, 2013, Soh claimed Blumont had the potential to be the Rio Tinto of Asia.

Soh told the court he was not promoting Blumont. Rather, his intention for organising that presentation was to “kill” market rumours. Just weeks earlier, LionGold had surged to as high as $1.75 but corrected back to $1.50; Asiasons, “out of the blue” trebled from 98 cents to $2.81.

As Soh was actively promoting LionGold, some who heard from him wondered why did not he tell them about Asiasons. Similarly, when Blumont shares surged, Soh was asked whether he was abandoning LionGold in favour of the other two stocks.

Soh told the court he had organised that presentation because he was tired of answering the same questions multiple times. Even then, some people doubted him when he said he had no knowledge of Asiasons.

“So I called up all these people together to say, ‘Okay, look, these are the issues. This is Asiasons, this is Blumont, this is LionGold’. You make your decisions, but these are the factors driving the companies or potentially affecting the companies. Make your own decision’. That’s exactly what happened,” said Soh.

Photo of Quah Su-Ling: Albert Chua/The Edge Singapore

Quah: Girl Friday, towkay neo and shareholder activist

John Soh Chee Wen also shed more light on his relationship with Quah Su-Ling, who had been described by different witnesses as towkay neo (Hokkien for the boss’ wife) and Girl Friday.

Soh told the court how he first met Quah in Jakarta back in 2001 or 2002. She was introduced by her distant cousin, Tamin Sjafei, a “comical, boisterous character who was everywhere.” Unlike Soh who came from relatively humble beginnings, Quah, who studied pharmacology in Adelaide, was from one of the old wealthy Penang families with her own network of ultra high net worth individuals stretching across Singapore, Malaysia, Indonesia and Hong Kong.

Soh told the court he was impressed by her “very strong views on many things”. Her “pet peeve”, according to Soh, were directors or CEOs of money-losing companies who paid themselves handsomely and with many perks. “She was one of the first original shareholders’ activists,” said Soh.

He recalled how he was further wowed by Quah after he convinced her to take his side in a takeover battle. “As the hostilities went on, we had to have people with some people skills to start calling shareholders — even those you don’t know — to try to get their proxies. And that’s how I came to know her well. She was very good at winning people over the cause she was selling,” said Soh.

By the time they got together as a couple, she was already separated from her husband — although they were still living in the same house — while Soh’s wife had died.

When Soh was making frequent visits to Singapore, she would arrange transportation to the meetings Soh had lined up. She would also set up meetings and deal with certain individuals she was close to, like Neo, Daim and his son Wira.

However, Quah stayed clear of Gwee, the court was told, because Gwee could not forgive her for ousting his friends in a previous tussle over Innopac Holdings.

According to Soh, LionGold’s former CEO Nicholas Ng did not like to talk to Quah either. “Nicholas always preferred to deal with me. Nicholas has a pretty MCP attitude towards alpha females,” he said.

However, Soh told the court he did not actually involve Quah in many of the meetings despite her being the co-accused. “We were close but let’s put it this way: whatever she likes or don’t like, it shows on her face immediately. During presentations, this sometimes grates on the nerves of people when you show a disbelieving face. For me, I like to let them talk while keeping a neutral or even encouraging face. Even though I’m sceptical of that person or the project, I don’t show it,” said Soh.

Girlfriend Cheng: sexting, pestering and ‘sex for contacts’

Photo of Adeline Cheng Jo-ee: Albert Chua/The Edge Singapore

Soh was romantically involved with Quah and another individual: Adeline Cheng Jo-ee. When she took the stand earlier, Cheng portrayed herself as a damsel in distress whom Soh had rescued from the wrath of her client Neo Kim Hock.

As the two got intimate, she told the court how Soh urged her to buy BAL shares even though they were already at lofty levels. But when the crash took place, Cheng was left “catching a falling knife”, saddling she and her father with losses of up to $10 million.

Soh did not deny his relationship with Cheng. He told the court how after February 2013, things got hot with “sexting” and the exchange of “some torrid flirtation messages”. By then, Peter Chen had already introduced a few of Soh’s associates to Cheng. However, Cheng, who runs her own wealth management firm, got Soh to introduce even more customers like Nelson Fernandez, Tan Boon Kiat and Soh’s brother Key Chai. While they did open accounts with her, they did not do much with them. “I believe they didn’t like her,” Soh told the court.

“It’s the prosecution’s case that these were controlled accounts, accounts controlled by you that you were parking with her. You were referring work to her and we have heard evidence you were intimate with her,” said Sreenivasan.

Soh said he did not control the accounts and explained he introduced his associates to Cheng because she was already his girlfriend. “And she’s pretty good at what she did — as in portfolio construction,” said Soh. However, Soh agreed he was “an opinion leader and a centre of influence” among his associates.

Soh also denied he directed Cheng to trade BAL shares.

“She was actually pestering me for tips — why I wasn’t telling her to load up when everybody else was loading up, suggesting to the point why I couldn’t just push down the price and let her buy cheap and push up for her to sell,” said Soh, who claimed Cheng wanted to build a $1 billion portfolio.

“What made her think you could push the price up or down?” asked Sreenivasan.

“That’s the thing, I have no idea. Perhaps her mixing with people who think I could do stuff in the market as some of them think that I made money through market manipulation,” said Soh.

Cheng’s demands for “preferential treatment” sparked off multiple rounds of arguments. “I was like, ‘Don’t bug me, I’m busy’ and ‘If you want money, I would rather make money and give it to you’,” added Soh.

Sreenivasan then asked Soh: “Were you using your contacts to get into Ms Cheng’s bed?”

“If I may immodestly say, I think it was the other way,” replied Soh.

“I don’t think we really need that,” said Justice Hoo Sheau Peng.