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2 remisiers jailed for aiding in market rigging of Koyo shares

TWO remisiers were jailed on Wednesday for assisting in a "sophisticated" scheme that manipulated trading in the shares of Catalist-listed Koyo International between August 2014 and January 2016.

Teo Boon Cheang, formerly a remisier with KGI Fraser Securities, was sentenced to three months' imprisonment, while a remisier previously with OCBC Securities, Goh Qi Rui Rayson, was handed a jail term of four months.

They were part of an alleged multi-member scheme that was said to have artificially pushed up the share price of Koyo - a provider of integrated mechanical and electrical engineering services - during the material period.

Teo, 51, pleaded guilty to allowing his trading account at KGI to be used by alleged mastermind Lin Eng Jue, 43. He was promised a 10 per cent commission of trading profits while any losses would be indemnified. Lin was alleged to have told Teo that the Koyo CEO wanted to sell the company at a certain price, and Lin’s plan was to push up the Koyo share price to around 40 to 50 Singapore cents, and then maintain the price at that level to attract a buyer to come in and buy over Koyo.

Koyo CEO Foo Chek Heng then held most of the two-thirds shares not in the public hands.

Goh, 35, was convicted on one count each of aiding to execute the illegal trades and deceiving OCBC Securities that the trades had been placed by the account holders themselves. His three other charges were taken into consideration for sentencing purpose.

He was initially alerted to the scheme after his firm’s compliance department flagged suspicious trades in a trading account. Instead of disengaging from the scheme and reporting its existence to the authorities, Goh agreed to be a party to the scheme by placing orders using four accounts opened by his clients allegedly on Lin's instructions. 

Deputy public prosecutor Suhas Malhotra, in pressing for imprisonment for the duo, argued that 53 accounts at eight brokerages were used in the manipulation of Koyo shares. He commented: "The market for Koyo shares was severely distorted. By the end of the scheme, the market bore no connection to genuine forces of supply and demand for Koyo shares."

He noted that Koyo share price increased from a low of 16 Singapore cents on Aug 12, 2014, to a high of 40 cents on Jan 7, 2016 and a week later on Jan 14. The counter was given a trade with caution warning by the Singapore Exchange on Jan 15 - a Saturday - and the price crashed from a previous close of 34 cents to 5.6 cents on the following Monday.

Lin and five others excluding Mr Foo have been charged, and their cases are pending.

Mr Foo had in 2016 disputed the allegations of market rigging when he was assisting the authorities in investigations.

As at 1.25pm, shares in Koyo were trading at 6.9 cents.