The financial scandal vapourised S$8bil in value from the Singapore Stock Exchange in a matter of days back in October 2013, when the prices of the three stocks that Soh and his accomplice, former chief executive of Ipco International Ltd Quah Su-Ling, have since been found guilty of manipulating, collapsed. — Bloomberg
PETALING JAYA: Malaysian businessman John Soh Chee Wen, who was the conspirator of the largest and most serious case of stock market manipulation in Singapore, was sentenced to 36 years in prison by the Singapore High Court yesterday.
The financial scandal vapourised S$8bil (RM26.2bil) in value from the Singapore Stock Exchange in a matter of days back in October 2013, when the prices of the three stocks that Soh and his accomplice, former chief executive of Ipco International Ltd Quah Su-Ling, have since been found guilty of manipulating, collapsed.
The three stocks in question are Blumont Group Ltd, LionGold Corp Ltd and Asiasons Capital Ltd, which has since been renamed Attilan Group Ltd.
Quah was handed a 20-year jail term by the court. Both are appealing against their sentences.
The pair were convicted of manoeuvering the share prices of the aforementioned three firms – now known collectively as BAL – for more than a year, between August 2012 and October 2013, through 187 trading accounts held with 20 financial institutions in the names of 58 individuals and companies.
They also controlled, obtained financing for as well as conducted illegitimate trading activity through these proxy accounts.
Soh, 63 and Quah, 57, have been found guilty of 180 and 169 charges, respectively, after a trial that has spanned close to 200 days and has involved almost 100 prosecution witnesses.
The bulk of those 349 charges, 106 counts to be specific, were for deception, where both of them attempted to mislead financial institutions, which includes Goldman Sachs International and Interactive Brokers LLC, by concealing their involvement when giving instructions to make orders and trades.
On top of that, Soh was also convicted of witness tampering by requesting four witnesses to provide false information to investigators after the market crashed on Oct 4 nine years ago.
High Court judge Hoo Sheau Peng said at the sentencing that the two accused are to be held responsible for most of the substantial volume of BAL trades and high percentage of the whole market’s trading volume.
Incidentally, investigations have uncovered documentary evidence comprising over two million e-mails, half a million trade orders and thousands of telephone records and financial statements.
Hoo added that the duo have carried out a scheme of substantial scale, complexity and sophistication where they boldly exploited the system and financial markets of which they possessed a good understanding.
“They personally minded and tended to the intricate scheme they devised on an almost daily basis for a prolonged period of 14 months, taking steps to evade detection by the authorities,” she commented.
However, Hoo justified the relatively shorter sentence on Quah, who was also Soh’s ex-partner, by noting that she is less culpable in the unravelled conspiracy and was less involved in terms of the originating of the scheme and its execution, before pointing out, “As a starting point for the false trading and price manipulation charges, I will impose on Quah two-thirds of the sentence imposed on Soh.”
Soh has chosen to remain in custody since 2016, and he notably wore a prison jumpsuit in court as he was found guilty of the scheme back in May this year. Quah has been out on bail since 2017, and she continues to be out on a bail of S$4mil (RM13.1mil) pending her appeal.
Earlier in the trial, Capital Markets Cooperative Research Centre in Australia chief executive Prof Michael James Aitken had testified that there has been a significant level of wash trading in the BAL stocks that were manipulated by the duo.
Wash trading is a term used to describe the buying and selling of a stock by the same party with the purpose of artificially creating a huge amount of trading volume to generate real public interest in the equity.
Reflecting on the sentencing, Soh’s defence attorney, senior counsel N. Sreenivasan, remarked that his client and Quah were not the only people involved in the fraudulent scheme, arguing the sentences cannot be such that the pair had apparently become scapegoats to other guilty parties involved.
Tellingly, Sreenivasan had highlighted to the court that a significant part of the BAL trade volume was carried out by prosecution witnesses Leroy Lau, Ken Tai, Henry Tjoa and Gabriel Gan, and therefore these acts should not be attributed to Soh and Quah.
Drawing comparisons to two previous cases, he said: “In the final analysis, this case is no Pan-El (Pan-Electric Industries) or Barings/Nick Leeson, and the sentence cannot be anything close to the 40 years that is being sought.”
Former Barings Bank trader Nick Leeson collapsed Britain’s oldest merchant bank after racking up S$2.2bil (RM7.2bil) in losses. He was later sentenced in 1995 to 6½ years’ jail after pleading guilty to two cheating charges.
The crash of Singapore-based marine salvage work firm Pan-El – which had 71 subsidiary companies – in 1985 resulted in the shutdowns of the Singaporean and Malaysian stock exchanges for three days in order to contain the fallout on heavily leveraged stockbroking firms.
Prior to his Singapore conviction, Soh was known to be a prominent stock market player in the Malaysian and Singaporean exchanges for nearly two decades.
He was previously found guilty of causing the collapse of Omega Holdings Bhd and was arrested for infringements involving Omega Securities, on top of being charged and fined for deceiving market authorities.
In 2007, Soh pleaded guilty and paid a fine of RM6mil before moving base to the city-state.
At the peak of the stock market rally prior to the 2013 BAL share-price crash, Soh controlled listed companies such as Promet Bhd, Uniphoenix Corp Bhd, Plantation and Development Bhd, Kelanamas Industries Bhd, Rekapacific Bhd and Omega Holdings Bhd.
On a separate note, former interim Ipco chief executive Goh Hin Calm, who was a third co-accused in the case, had earlier in 2019 pleaded guilty to two charges of false trading and market rigging and has received a three-year imprisonment.
