Alleged penny stock crash mastermind John Soh Chee Wen and girlfriend Quah Su-Ling used the market rigging scheme to get financing to keep it going, and to finance corporate acquisitions by BAL companies, prosecutors said yesterday.
Prosecution witnesses will testify that Soh told them he sought to achieve artificial liquidity in order to attract genuine investors, or that he intended to push the share price to a particular level in order to bolster corporate deals or share placements.
As the controlling minds, Soh or Quah gave instructions to the trading representatives through telephone calls and text messages to trade in BAL shares in the controlled accounts. These instructions included buying or selling a certain quantity of BAL shares at a certain price.
In the case of the third-party financial intermediaries, they would either convey the instructions to the trading desk of the private banks or execute the instructions using the trading platform of the foreign financial institutions.
In some cases, once the trade was executed, the trading representatives would update Soh or Quah.
The two alleged masterminds informed the brokers that they would be responsible for any losses resulting from contra trades.
The prosecution will also refer to telecommunication data that it said shows repeated communications between Soh and the trading representatives operating controlled accounts - more than 40,000 times over the relevant periods.
Among evidence that the prosecution will present is a spreadsheet that was maintained by former Ipco International interim chief executive Goh Hin Calm to keep track of the allegedly controlled accounts.
The prosecution will also give evidence that although Soh never held any official position in the three BAL companies, he fronted discussions with counterparties and bankers in respect of BAL corporate acquisitions or deals, and was influential in setting the business and strategic directions that the companies should take, Deputy Chief Prosecutor Peter Koy said.