Malaysian businessman John Soh Chee Wen and girlfriend Quah Su-Ling tapped family members, friends, associates and companies related to them, and "exploited contra trading to serve their nefarious ends", prosecutors yesterday outlined on the first day of the trial of Singapore's most serious case of stock market manipulation.
Soh, the alleged mastermind of the 2013 penny stock crash that wiped out $8 billion from the Singapore market, and Quah, the former Ipco International chief executive, pleaded not guilty to 189 charges and 178 charges, respectively, yesterday to manipulating the share prices of Blumont Group, Asiasons Capital (now Attilan Group) and LionGold Group - known collectively as BAL.
The first tranche of their joint trial before High Court Justice Hoo Sheau Peng - comprising 211/2 days - is expected to end on May 24 with at least 26 witnesses testifying.
The witnesses include former LionGold executive Peter Chen Hing Woon and Ms Adeline Cheng Jo-Ee, another "romantic partner" of Soh's.
For more than a year, from Aug 1, 2012, to Oct 3, 2013, Soh and Quah masterminded and carried out a massive scheme of market manipulation by artificially inflating the liquidity of and manipulating the prices of the BAL stocks, said the prosecution.
They were aided by former Ipco interim CEO Goh Hin Calm, who last Wednesday pleaded guilty to two of six charges of aiding and abetting Soh and Quah. Goh, 59, described as a "treasurer" in the operation, was sentenced to 36 months in jail for each charge, and both sentences will run concurrently.
Through an army of 189 trading accounts held in the names of Quah, Goh and 58 other individuals and firms at 20 financial institutions, Soh and Quah "dominated the market for BAL shares", Deputy Chief Prosecutor Peter Koy said yesterday.
The duo were responsible for trades in 1.1 billion Blumont shares, 3.4 billion Asiasons shares and 4.3 billion LionGold shares in this period - representing 60 per cent, 88 per cent and 90 per cent of all trades in the companies, respectively.
Soh and Quah each face 178 charges related to creating false markets and deceiving financial institutions, among others.
Soh, an undischarged bankrupt, also faces additional charges related to witness tampering and getting involved in the management of the three companies without permission from the Official Assignee, bringing his total to 189 charges.
Soh and Quah have been acquainted since 2002. At the time of the offences, they were in an intimate relationship, prosecutors said.
The pair allegedly drew on personal and business relationships to control trading accounts belonging to family, friends, associates and companies related to them.
They included Soh's two sons, his brother, brothers-in-law and the wife of one of his brothers-in-law.
Soh also controlled trading accounts belonging to Ms Cheng, as well as two companies she and her father owned.
In total, Soh and Quah controlled 33 accounts from this group of controlled account holders.
In addition, Quah had 16 trading accounts in her own name and Goh had six, but Soh did not hold any in his own name.
As investigators closed in, Soh sought to hide his and Quah's involvement in the scheme by tampering with no less than four witnesses, prosecutors said.
During the period of the charges, Soh and Quah were responsible for carrying out wash trades in more than 353 million Blumont shares, 1.6 billion Asiasons shares and 2.4 billion LionGold shares, said prosecutors.
Wash trading refers to using one controlled account to sell to, or buy from another controlled account, manufacturing false trading volume in the process.
Another way the scheme was funded was by deceiving Goldman Sachs International and Interactive Brokers into extending margin financing and delivering payment of more than $232 million for the purchase of securities, by offering BAL shares as collateral, while concealing from the financial institutions that the market for BAL shares was manipulated, said the prosecution.
Soh, 59, was arrested in November 2016 and is still in remand, while Quah, 54, is out on bail.