Trio face 365 charges over penny stock crash

John Soh Chee Wen faces 181 charges under the Securities and Futures Act, the Companies Act and the Penal Code.
John Soh Chee Wen faces 181 charges under the Securities and Futures Act, the Companies Act and the Penal Code.ST FILE PHOTO

They are alleged to be responsible for largest market manipulation in Singapore

The two alleged masterminds of the penny stock crash and their supposed key accomplice faced a total of 365 charges yesterday in what prosecutors call the largest market manipulation case in Singapore's history.

The charges levelled at John Soh Chee Wen and Quah Su Ling - who are alleged to be the two main players and face 181 and 178 charges, respectively - involve alleged violations of the Securities and Futures Act.

The pair are also in a romantic relationship, the court heard.

Goh Hin Calm, 57, was deemed their "key accomplice" and faces six charges. Soh, 56, Quah, 52, and Goh were all arrested on Thursday.

District Judge Terence Tay set bail for Quah at $4 million and at $750,000 for Goh. Soh was denied bail and remains in remand, pending a hearing on Dec 20. Goh and Quah were also in remand as they had not made bail as of last night.

  • Alleged mastermind

  • John Soh Chee Wen

    Soh was once one of Malaysia's biggest stock market investors, with links to Mr Ling Hee Liong, son of former Malaysian transport minister and former Malaysian Chinese Association president Ling Liong Sik.

    Soh faces 181 charges under various sections of the Securities and Futures Act, the Companies Act and the Penal Code. The charges include:

    • Six counts of conspiring to create a false appearance with respect to the market for the three companies' shares between Aug 1, 2012, and Oct 3, 2013.

    • Four counts of conspiring to manipulate and support the trio's share prices shortly before they collapsed on Oct 4, 2013.

    • Six counts of cheating financial institutions into extending credit to accounts he and Quah Su Ling controlled.

    • 162 counts of giving instructions on the trading accounts without obtaining the financial institutions' consent.

    • Three counts of being concerned in the management of Blumont, Asiasons and LionGold, while being an undischarged bankrupt.

  • Alleged girlfriend and fellow mastermind

  • Quah Su Ling

    A former Ipco chief executive, Quah was among several parties sued over $79 million in losses sustained by Interactive Brokers in the wake of the penny stock crash.

    She is also allegedly Soh Chee Wen's girlfriend.

    She faces 178 charges:

    • Six counts of conspiring to create a false appearance with respect to the market for the three companies' shares between Aug 1, 2012, and Oct 3, 2013.

    • Four counts of conspiring to manipulate and support the three firms' share prices in August, September and October 2013 shortly before they collapsed on Oct 4, 2013.

    • Six counts of cheating financial institutions into extending vast amounts of credit to accounts she and Soh controlled.

    • 162 counts of giving instructions on the trading accounts without obtaining the financial institutions' consent.

  • Alleged key accomplice

  • Goh Hin Calm

    Ipco's interim chief executive and former independent director of Annica Holdings and ITE Electric, Goh was among those asked by the Commercial Affairs Department to assist in investigations starting in 2014.

    He faces a total of six counts of intentionally aiding John Soh Chee Wen and Quah Su Ling to create a false appearance with respect to the market for Blumont, Asiasons and LionGold shares between Aug 1, 2012 and Oct 3, 2013.

The trio were charged in relation to a massive fraud to manipulate the shares of Blumont Group, Asiasons Capital - now called Attilan Group - and LionGold Corp between August 2012 and October 2013.

The three stocks surged between 150 per cent and 800 per cent in less than nine months before losing most of their market value in just three days in October 2013, wiping out more than $8 billion in value and triggering market panic.

The scheme involved exploiting over 180 trading accounts belonging to 59 individuals and corporate nominees to manipulate the shares.

The aim was to "create an illusion of liquidity and demand... by making thousands of manipulative trades in Blumont, Asiasons and LionGold and to control the supply of these shares" to influence prices.

Soh and Quah, the former chief executive of Ipco International, are accused of deceiving Goldman Sachs and US trading firm Interactive Brokers into extending more than $170 million in margin financing that they used to finance the scheme.

Deputy Public Prosecutor Teo Guan Siew said Quah's cheating charges were the "most serious ever prosecuted in Singapore".

Quah, who is divorced with two children aged 19 and 25, is a Malaysian national with Singapore permanent residency. She is also an adjudged bankrupt.The DPP said she has "access to resources it will take to abscond, because of her close romantic relationship with Soh, her co-conspirator", adding: "They have been in an intimate relationship for the past three years, and (she) lives together with Soh."

Lawyer Kevin Lim of Harry Elias Partnership, who is representing Quah, attacked the prosecution's claims of a romantic relationship, saying: "There is no evidence of that in the affidavit. It is a bare assertion.

"Even if she is in a relationship with Soh, which is not admitted, it is unlikely that she will sever her relationship with her children to be with Soh. (Singapore) has an extradition treaty with Malaysia... What would she be fleeing to?"

DPP Teo said Soh, whose passport was impounded, was still a flight risk as he had tried to travel to Malaysia last year but failed because his boat "malfunctioned".

The prosecution asked that bail for Goh, who was Ipco's interim CEO, be set at $1 million, but his lawyer Nicholas Narayanan asked for a reduced sum as he was not a flight risk. He cited Goh's "history of severe coronary artery disease" and noted that his client, a Singaporean, did not reap personal gain from the share transactions.

DPP Teo argued that Goh had helped the alleged "masterminds" by "playing the role of treasurer".

"The massive fraud attracted the attention of international media. The loss of investor confidence and the harm to Singapore's reputation as a financial centre has been immeasurable and enduring," he said.

A version of this article appeared in the print edition of The Straits Times on November 26, 2016, with the headline 'Trio face 365 charges over penny stock crash'. Print Edition | Subscribe