The stigma of being linked to alleged penny stock crash mastermind John Soh Chee Wen sent ISR Capital shares plunging to new lows yesterday when it resumed trading after being suspended for more than three months.
ISR stock dived as much as 87 per cent at the opening before recovering to close at four cents, down 69 per cent or 8.7 cents. Some 407.9 million shares changed hands, making it the most actively traded counter yesterday.
The stock was suspended on Nov 27 last year.
The Singapore Exchange (SGX) issued a "trade with caution" warning on the firm on March 1 when it announced that trading would resume yesterday. This followed disclosures in court on Feb 28 that the stock may have been the subject of alleged manipulation by Soh.
Investigators had found that some trading accounts linked to Soh were "involved in pushing up or maintaining ISR shares", which had rocketed around 2,800 per cent between May and November last year.
Soh is accused of contravening the Companies Act by being "intimately involved in and (exercising) influence" over the management and corporate affairs of ISR while being an undischarged bankrupt.
He is also believed to have abetted insider trading by asking a trading representative to buy ISR shares while in possession of non-public, price-sensitive information ahead of an announcement.
Soh's lawyer, Senior Counsel Tan Chee Meng of WongPartnership, said that prosecutors have produced no evidence to show Soh's illegal conduct in ISR.
Mr Tan told the court last week that his client would be "stupid" to try to manipulate ISR "in this time and age where every trade can be traced".
Soh was arrested on the morning of Nov 24. ISR shares crashed 55 per cent in the hours that followed before the company called a trading halt later that day.
About $247 million in market value was wiped out as a result of the crash, prosecutors said.
The prosecution alleges that some accounts that had "traded suspiciously" in ISR were among those that were dumping its stock once Soh was arrested.
Three days later, the SGX suspended the trading of ISR shares, citing "circumstances that prevented trading on an informed basis".
Soh was one of three charged last November with manipulating the market in the shares of Asiasons (now known as Attilan Group), Blumont and LionGold, between August 2012 and October 2013.
The shares surged between 150 and 800 per cent in less than nine months, before plunging over three days in October 2013, wiping out more than $8 billion in value.
Soh initially faced 181 charges over alleged violations of the Securities and Futures Act. On Feb 28, seven new charges of witness-tampering were brought against him, bringing the total to 188.