John Soh’s long wait for his day in court
A court case beginning in March next year will be closely watched as it seeks to get to the bottom of Singapore’s penny stocks crash four years ago. TASNIM LOKMAN and AHMAD FAIRUZ OTHMAN take a look at the people and events in the securities fraud probe.
New Straits Times
Malaysian businessman Datuk John Soh Chee Wen, 60, has been in Changi prison, Singapore, for the past two years, waiting for his trial to begin. Soh, who was charged with alleged involvement in the Singapore penny stocks crash of 2013, will get his day in court starting March.
He faces 181 charges under the Securities and Futures Act for allegedly being the mastermind behind the Singapore penny stocks crash.
Also in the dock are former Ipco International chief executive officer Quah Su Ling, who is facing 178 charges and former Ipco interim CEO Goh Hin Calm, who faces six charges.
They have been accused of manipulating three penny stocks — Blumont Group, Asiasons Capital (since then renamed Attilan) and LionGold Corp.
Quah and Goh are out on bail of S$4 million (RM11.87 million) and S$750,000 (RM2.26 million), respectively.
Soh, on the other hand, failed to obtain bail twice as the Singapore courts viewed him a flight risk.
Soh’s last court proceedings were a three-day indictment hearing at the Singapore High Court, which ended on June 1 this year.
On that day, assistant registrar James Elisha Lee ruled that there were sufficient grounds to commit to a full trial after the cross-examination of 13 prosecution witnesses.
Unlike Malaysian courts, where an accused person’s trial starts if he or she contests the charge, Singapore courts conduct indictment hearings to determine if there is sufficient grounds to commit to a full trial.
Extensively reported, especially in the Singapore media, the penny stocks crash four years ago caused a loss of some S$8 billion (RM23.27 billion) in market value in a span of a few days.
It was arguably the republic’s biggest and most complex fraud case in recent years.
Brokerage firms, remisiers, dealers and small investors were among the casualties of the crash as many of them lost large sums of money.
Banks and brokerages filed lawsuits to compel clients to pay up, while investor confidence was badly hit as trading volumes on the Singapore Exchange (SGX) fell sharply.
The sequence of events which led to the crash began on a Friday — Oct 4, 2013 — when Blumont, Asiasons and LionGold stocks were suspended from trading after experiencing falls of 40 per cent to 60 per cent.
The trading suspensions were lifted two days later, but prices continued to plummet and were down by 94 per cent, 96 per cent, and 87 per cent, respectively, by Oct 8, compared with the day before the crash.
Sources told the New Sunday Times that the sequence of events led to a designation of the three stocks, which is what any stock market regulator does to maintain fair and orderly trading when such cases occur.
Authorities in Singapore have said that Soh, Quah and Goh controlled over 180 trading accounts — owned by 59 individuals — who had given them access to manipulate shares in Blumont, Asiasons Capital and LionGold “to create an illusion of liquidity and demand for these shares by making thousands of manipulative trades”.
The trio allegedly controlled the supply of these shares available to the market to influence the price of the counters.
Soh and Quah were also accused of cheating financial institutions Goldman Sachs and Interactive Brokers LLC into extending more than S$170 million (RM516 million) in margin financing to their accounts, using the manipulated shares as collateral to secure the loan.
The defence team in the case had also highlighted details of the crash during Soh’s committal hearing in June this year.
The defence has built a case that several firms, including Goldman Sachs, Interactive Brokers (IB) and Saxo Bank’s decision to force-sell stocks, contributed to the crash.
A star witness, Ken Tai Chee Ming, told the court that the stock crash was to a degree the fault of Singapore Stock Exchange (SGX) and other financial institutions.
While he admitted to facilitating trading for Soh and Quah by using foreign incorporated companies, Ken Tai also claimed that an announcement and queries made by SGX between Oct 1 and 6, 2013 spooked investors and caused a downward impact on stock prices.
This, together with various investment houses and financial institutions’ force-selling of stocks, had led to the collapse.
The probe into the penny stock crash has turned out to be one of the most extensive in the republic.
Singapore’s Attorney-General’s Chambers, Commercial Affairs Department (CAD) and Monetary Authority of Singapore (MAS) revealed in 2016 that evidence comprised “over two million emails, half a million trade orders and thousands of financial statements”.
The joint probe by CAD and MAS has involved raids on more than 50 locations, including residences, offices and brokerages.
Some 70 witnesses were interviewed and investigators reviewed about 20,000 email items, monthly account statements related to more than 500 trading accounts, and more than 1,100 bank accounts.
Soh himself has given about 30 interviews with more than 2,000 questions that were documented in a 800-page report.
Investors caught in the 2013 penny stock crash are eagerly waiting for Soh’s trial to get some answers to what happened.
But those who know the Malaysian businessman are praying that he will be given some reprieve after being under country arrest and remand for four consecutive years.
A close friend of Soh, who spoke on condition of anonymity, said it was disheartening to see what Soh went through during his country arrest.
This friend had attended one of Soh’s previous court proceedings in January 2016, when he was still under country arrest, in which Soh applied for a return of his Malaysian passport.
“At that time, he needed to go back home to Kuala Lumpur to see his elderly mother, who is in her 80s now.
“He also intended to attend his son’s wedding.
“He had given up his passport to the authorities in a bid to show his sincerity in cooperating on the case,” said the friend, who has known him for 30 years.
Soh’s wife, Joanne Lau May Foong, died in 2011 of colon cancer.
The couple have two sons who are in their 30s.
Another close friend of Soh also lamented the long jail time in Singapore.
Soh is in a small cell with three other inmates with no mattress or pillow but only a blanket to use to sleep at night.
“The upcoming trial is expected to run for 90 to 120 non-consecutive days. Soh has been living in jail for two years and was also under country arrest for two years before that.
“During his previous court proceedings, I found out that he would wake up at 4am to get ready to attend court in the morning and return to Changi Prison way after all the other detainees had taken their dinner.
“He barely has time to read through court notes with his lawyer. I worry that all these upcoming court dates will take a huge toll on his wellbeing,” said this friend.
This trial is expected to be historic as prosecutors have described it to be Singapore’s largest securities fraud probe.
But even amid all these testimonies and claims, the fact still stands — a Malaysian has been held for four years awaiting his day in court.
And the whole country will be anticipating the outcome.
