$8b penny stock crash trial

$8b penny stock crash trial: Defence accuses remisier of 'coordinating trades' for front-running

The trial of John Soh Chee Wen and Quah Su-Ling for their roles in the 2013 penny stock crash resumed yesterday with the defence accusing remisier Ng Kit Kiat of exploiting information from Soh, and "coordinating trades" with at least one other person, UOB remisier Alice Ang Cheau Hoon, in alleged front-running activity.

Front-running involves a broker taking an order from a client but lodging his own trade before the client's order is placed. This can result in the initial trade benefiting from a price rise or fall triggered by the second.

Ms Quah's lawyer, Mr Philip Fong, told the judge that when trading representatives like Mr Ng act on market intelligence - such as an impending trade by an influential figure - it could push the stock price up or down.

"Not because of the fault of the accused persons, but this is what's happening," he said earlier in the trial.

Yesterday, during cross-examination by Mr Fong, Mr Ng admitted that Ms Ang had called him to give instructions to place trades in accounts under him. But Mr Ng said he could not remember if the accounts belonged to her, and was not able to check because he had resigned from his position at OCBC Securities last week.

Referring to Blumont trades done on Jan 16, 2013, Mr Fong said that within seconds of Mr Ng placing a sell order for 200,000 Blumont shares at 45.5 cents after receiving calls from Ms Ang, she herself placed an "exact same sell order" in an account under her.

"So you were in fact coordinating your sell orders with Alice Ang," Mr Fong said. Mr Ng denied this.

Referring to Blumont trades done on Jan 16, 2013, Ms Quah's lawyer, Mr Philip Fong said that within seconds of Mr Ng placing a sell order for 200,000 Blumont shares at 45.5 cents after receiving calls from Ms Ang, she herself placed an "exact same sell order" in an account under her. "So you were in fact coordinating your sell orders with Alice Ang," Mr Fong said. Mr Ng denied this.

Defending against allegations that Soh and Quah were behind Singapore's most serious case of stock market manipulation, Mr Fong said: "My case is that there is a form of coordination between Alice Ang and Ng, and this had an impact on the price and volume of Blumont shares."

Soh and former Ipco International chief executive Quah have been charged with conspiring to create a false market for stocks of Blumont Group, Asiasons Capital (now Attilan Group) and LionGold Corporation (collectively known as BAL).

Through a raft of 189 trading accounts held in the names of Quah and 59 other individuals and firms at 20 financial institutions, Soh and Quah were accused of "dominating" the market for BAL shares.

A key point in the defence case is that Mr Ng knew he was communicating with Soh for some of the accounts involved in the alleged rigging of the BAL stocks before their collapse in October 2013 wiped out $8 billion from the stock market.

But Mr Ng had earlier testified that he realised the "Peter Chew" who had instructed him over the phone to place trades for BAL stocks, without written authorisation from the account holders, was in fact Soh, only when the two met after the BAL stocks collapsed in 2013.

In trying to discredit Mr Ng's testimony, Mr Fong yesterday accused him of hiding the fact that he already knew Soh was "Peter Chew" by renaming Soh's contact details as Peter Chew, to prevent anyone from finding out about his communicating with Soh.

He also accused Mr Ng of hiding the fact that he used Soh's information to benefit Ms Ang and/or his wife by deleting messages he received from Soh.

But Mr Ng denied this, saying he deleted the messages "because my knowledge of IT is very bad".

A version of this article appeared in the print edition of The Straits Times on April 23, 2019, with the headline 'Defence accuses remisier of 'coordinating trades' in front-running activity'. Print Edition | Subscribe