John Soh – the alleged mastermind of the 2013 penny stock saga – is “shocked” that the trading representatives who were called as prosecution witnesses had said that they had administered trades on his instructions.
“I have no idea why in the world the rogue [traders] want to fix me,” he told the court on May 19, as he continues the fourth day of his examination-in-chief by his defence counsel N Sreenivasan of K&L Gates Straits Law.
“Now we see the extent and scale of their activities. The devices they use, it is totally brazen,” he elaborated when shown a series of trades that had been made across different dates.
The way he sees it, the traders began pinning responsibility on him after knowing that he was on the radar of the Commercial Affairs Department (CAD).
Sreenivasan then highlighted that the witnesses had initially given statements that were exculpatory of Soh.
“As things got dug out, they put in alternative stories. The motivating story is their hands [are] so dirty, they could have been jailed,” he responded.
Soh and his co-accused Quah Su-Ling allegedly orchestrated Singapore’s largest share manipulation scheme between 2012 and 2013 involving three penny stocks: Blumont, Asiasons Capital (now Attilan Group) and LionGold.
The eventual collapse of these counters – collectively referred to as BAL – in October 2013 had wiped out some $8 billion in market value.
By ‘rogue traders’, Soh was referring to Ken Tai, Gabriel Gan and Leroy Lau – all of whom were supposedly part of his inner circle.
As to why he was referring to them rather dramatically, Soh said it was because the three of them “have admitted their cooperation and alliance”.
SEE:Manipulations, betrayals and sweet talk: the case so far against John Soh and Quah after 169 days
“Their narratives are pretty much the same,” he explained. An example of this was that the three traders had previously told the court that Soh “didn’t have enough lines”.
“They were doing unauthorised trades…the scale at which they were doing [so] would have overwhelmed the market,” he stressed.
“I want to show these trades have nothing to do with me,” Soh said emphatically.
Gan and Lau, at different points in time, were brokers with DMG Securities, while Tai was running his own firm Algo Capital at the time the alleged offences took place.
“If I had done, sanctioned or worst been participating [in these trades], I would have been defrauding all the people who have been with me for the past 30 years,” stressed Soh.
“Su-Ling would have ditched me, because I would have been defrauding her,” he added, referring to his romantic partner and co-accused whom he has known for two decades.
A sore-thumb
The way Soh sees it, the biggest sore thumb of the case has been the Manhattan House Syndicate or MHS.
This was coined in reference to the “simple” office space that had been financed by Henry Tjoa, who was then a remisier from Phillip Securities, as well as Tai.
Coincidentally, a travel agency owned by the family of Dick Gwee – another of Soh’s close associates – was also at Manhattan House, which is along Chin Swee Road.
Soh was quick to say that, “we can’t draw any conclusions but it is what it is”.
When pressed by Sreenivasan if he had a part to play in the MHS, Soh replied, “I don’t know about it, I have no idea”.
He went on to say that he would have been required to pay up for his share, if he indeed had a part to play in the MHS.
“People like Ken Tai worships money,” he said.
Soh added that Gan would have at, some point, recorded his comments on the MHS for he “was clearly baiting me to say whatever he wanted [me] to”.
Numerous recordings made by Gan between himself and Soh had been presented in court, as part of the witness tampering charges Soh also faces.
The court heard that the trio in the MHS had also been using "bangla" or disposable phones to trade. They had previously given evidence that the use of these phones was on the instructions of Soh, presumably to avoid any detection.
However, Soh claimed that he had been “excluded” from having such a phone.
“This operation requires precision and coordination,” he noted.
“I was not involved in this syndicate – I presumed [Tjoa, Tai and Gan] got together to grow the CFD (Contract for Differences),” he maintained.
CFDs are financial contracts that pay the differences in the settlement price between the opening and closing trades. This enables investors to trade the direction of securities over the very short-term.
A turnaround
Sreenivasan’s examination also zeroed in on Soh’s interactions with Lau.
They had gotten acquainted in 2010, when the latter was introduced to Soh by former LionGold CEO Nicholas Ng, at the opening of a pub in Middle Road. At that time, Ng was the CEO of DMG Securities.
Soh said that prior to this, he had not known of Lau, as he was “quite rusty in the markets because of [his] long absence”.
Soh subsequently met Lau at a few more “drinking occasions” when he went in just to say hi and bye.
“I go there and they make fun of me because I’m the only guy drinking coke,” said the teetotaler.
Lau’s ambition was to own a public company, “rather than just being a player in the market”. And so he – on the advice of Ng – looked to Soh for some guidance.
Soh then invited him to join him for one of his “turnaround meetings” during which his advice is sought on how the outlook of a troubled or distressed company can be reversed.
In this time, Lau also developed an interest in LionGold – particularly because his "sifu" (master), an astrologer in Thailand, told him to focus on gold.
An interested follower, Soh recounted how Lau went with him to explore deep underground mines and was looking to be involved in takeover meetings of gold companies in mid 2012.
Lau’s style was also to engage in aggressive day trading. This saw him being the main trader trading the stock upwards, in hopes of building up an interest and ensuring that the counter being traded had some following.
“His constrained trade trading style was very well known,” said Soh.
He demonstrated this by showing how the price of LionGold was driven from $1.10, to $1.30.
Soh found out about Lau’s trades in LionGold through Ng. At that time, Ng had taken this as some sort of value-add for DMG Securities which was looking to have LionGold as its poster boy in a bid to secure more corporate financing deals from other mining companies.
It was only later that Soh came to know that Lau had also been trading “all sorts of stocks” as well.
In one instance he said Ng had asked for his help to get shares in IPCO International, whose former CEO was Soh's co-accused Quah.
“You just need to lend me and I will return in a few days,” Soh recalls Ng to have said.
The way Soh saw it, someone was obviously short of borrowed shares somewhere.
He decided to do Ng a favour, only to find out later that the shares were taken by Lau.
This in a way is a form of pre-arranged trade, Soh told the court.
He went on to say that Lau – like Tai – had been spoofing by putting in a buy order without any intention of buying the counter.
Sreenivasan then put forth the possibility the Lau had been acting on Soh’s instructions.
“No,” he replied.
Sreenivasan then touched upon Lau’s statement that Soh had told him he would be given a discount for short selling.
“No way, totally no – I mean nobody would reward a short seller,” he rebuked.
Short selling occurs when an investor borrows a security and sells on the open market with an intention to buy it back later at a lower price.
“Your Honour, the trading representatives who came here [are] lying through their teeth,” Soh remarked.
The trial will resume on May 20 with Sreenivasan continuing his examination-in-chief of Soh.
