The trial of Malaysian businessman John Soh Chee Wen and two others implicated in the infamous 2013 penny stock crash that wiped out $8 billion from the Singapore stock market will proceed, the High Court ruled yesterday.
Following a three-day committal hearing, which started on Wednesday, Assistant Registrar James Elisha Lee Han Leong concluded yesterday that there are "sufficient grounds to commit the accused persons for trial before the High Court".
Lawyers for the defendants say that they will respond to the prosecution's case at trial.
Soh, former Ipco International chief executive Quah Su Ling and former interim CEO Goh Hin Calm are accused of "orchestrating a scheme involving hundreds of thousands of trades placed in an extensive web of 189 trading accounts which Soh and Quah controlled".
The 189 accounts included those in the names of 59 corporate and individual account holders, and were opened with 20 financial institutions, including local and foreign brokerages and private banks, the prosecution said in its opening address.
Soh faces a total of 189 charges related to the events of October 2013, when the share prices of Blumont Group, Asiasons Capital (now Attilan Group) and LionGold Group crashed and triggered massive sell-offs in penny stocks. Quah faces 178 charges, while their alleged accomplice Goh faces six charges.
In trying to show that Soh was not responsible for the crash, his lawyer, Senior Counsel N. Sreenivasan of Straits Law Practice, argued that it could have been the Singapore Exchange's queries and the forced selling of shares in these three counters by financial institutions that had caused the "catastrophic fall".
But lead investigation officer Sheryl Tan gave evidence that no other financial institution force-sold shares of Blumont, Asiasons and LionGold in the lead-up to the stock market crash on Oct 4, 2013.
Only Interactive Brokers force-sold shares in those counters in the lead-up. In total, it force-sold about 220,000 LionGold shares and 550,000 Blumont shares, she said.
Mr Jason Moo, CEO of Goldman Sachs Singapore, testified that the bank did not force-sell any shares of the three counters in Quah's account, or former Blumont Group top executive James Hong's account, before the crash.
He said Goldman exercised its contractual rights to force-sell the collateral in their accounts only from Oct 9 because large deficits remained unpaid in the accounts.
Of a total of 67 witnesses named by prosecution, 13 took the stand over the course of the committal hearing. They included the prosecution's expert witness, Professor Michael Aitken, who gave evidence to support allegations that 189 accounts controlled by Soh and Quah were "engaged in an extraordinarily high level of wash trading among the controlled accounts".
"The controlled accounts were trading with themselves and dominated the trading activity in the shares, thereby generating artificial liquidity and driving the prices of the shares," the prosecution team said.
Soh, who was arrested on Nov 24, 2016, remains in remand pending trial. Both Quah and Goh had their bail extended yesterday.