Soh Chee Wen among those arrested in probe into 2013 penny stock crash

Singapore

A NUMBER of individuals who were under investigation for the 2013 penny stock crash were arrested on Thursday morning, sources told The Business Times.

These individuals included John Soh Chee Wen, who was described by the Public Prosecutor in January as the "mastermind" behind the companies at the heart of the crash; former Ipco International chief executive Quah Su-Ling; and Goh Hin Calm, former independent director at Annica Holdings and ITE Electric.

Mr Soh is to be represented by Wong Partnership, and Mr Goh, by Nicholas & Tan. Lawyers for both declined comment.

All three were under investigation in 2014, in the largest securities fraud probe in Singapore's history. The investigation has been focusing on the sudden collapse on Oct 4, 2013, of the shares of Asiasons Capital - now known as Attilan Group - Blumont Group and LionGold Corp.

Other individuals targeted by investigators in 2014 have held office at a number of Singapore-listed companies, including Innopac Holdings, ISR Capital and Magnus Energy.

Shares of ISR Capital more than halved on Thursday just after noon, dropping from about 28 Singapore cents to 12.7 Singapore cents - a 55 per cent dive - in about two hours.

The drop prompted a query by the Singapore Exchange (SGX), and ISR requested a trading halt at 2.32pm, pending its reply to the query.

Mr Soh has had his passport impounded since 2014.

In January this year, the Singapore court denied his application to set bail terms so that he could visit his ailing mother in Malaysia.

In arguing its case during that January hearing, the Public Prosecutor alleged that Mr Soh was responsible for trades in Asiasons, Blumont and LionGold for a large number of trading accounts, and that he was engaged in false trading and market rigging and possible fraud or deception of other people.

Mr Soh's lawyer, Tan Chee Meng, argued at the time that his client had willingly remained in Singapore before he was called in for questioning by the police, and was therefore not inclined to flee.

The Public Prosecutor, who also noted that 25 trading representatives were believed to have assisted or taken part in false trading, market rigging and/or fraud, had indicated in January that charges were expected to be filed by the end of this year.

When the shares of Asiasons, Blumont and Liongold fell sharply on Oct 4, 2013, it sparked a sell-off among penny stocks, which led to the Singapore Exchange (SGX) tapping rarely used measures to try to bring order back into the market.

The market capitalisation of the three stocks had stood at S$9.3 billion at the close of Oct 3; when their stocks were suspended on Oct 4, their market value had fallen to S$4.1 billion.

The crash prompted a sweeping review of Singapore's regulatory framework for securities markets, including proposals to impose a minimum trading price and collateralised trading.

The Monetary Authority of Singapore and the Commercial Affairs Department have also streamlined the investigation of rule breaches.