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PENNY STOCKS SAGA

'John Soh would use bankruptcy to secure loyalty from associates'

Former remisier testifies that alleged mastermind will drip-feed them financially after making them bankrupt

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A former remisier, who has admitted to have been intimately involved in the 2013 penny stock market-rigging, painted a picture of John Soh Chee Wen - the alleged mastermind of the scheme - as a manipulative user.

Singapore

A FORMER remisier, who has admitted to have been intimately involved in the 2013 penny stock market-rigging, painted a picture of John Soh Chee Wen - the alleged mastermind of the scheme - as a manipulative user.

Tai Chee Ming testified on Oct 3 in the trial against Soh and his co-accused Quah Su-Ling that he was warned about Soh on how the 59-year-old would make people around him stay loyal to him by making them bankrupt and then drip-feed them financially.

The word of caution was from Andy Chee, then non-executive chairman of mainboard-listed company Sino Construction (now MMP Resources).

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Mr Tai has admitted - when he began his testimony on Sept 30 - that he was part of the "inner circle" of both accused in the scheme that created false markets for penny stocks Blumont Group, Asiasons Capital (now known as Attilan Group) and LionGold Corp - collectively known as BAL - from August 2012 to October 2013.

The counters rocketed more than 800 per cent in a span of nine months before crashing on Oct 4, 2013, triggering a wider penny stock rout that wiped out S$8 billion in market value.

The High Court heard on Oct 3 that Mr Tai helped Soh to get listed Sino Construction to stage a comeback for the accused post-crash. Sino Construction share price jumped from less than two Singapore cents to nearly 30 cents, thereby allowing Soh to use the shares for a corporate deal with an Edward Lee.

However, Mr Tai was told by Mr Chee in early 2015 that Quah's mother had received S$40 million. This led Mr Tai to believe that Soh still had "substantial funds" - from "cheating" Mr Lee - despite the penny stock rout.

Mr Lee became a substantial shareholder of Sino Construction with total stakes just shy of breaching the takeover threshold of 30 per cent, Mr Tai said.

After learning about how the deal had enriched the accused, Mr Tai and a few of those in the inner circle became angry with Soh for stashing away "substantial funds" and not helping them out.

Earlier evidence revealed that the penny stock rout has resulted in at least half a dozen people becoming bankrupt, including remisiers who had handled the trades in question.

Mr Tai, who had been a remisier with several brokerages, also told the court why he suspected that Soh had "orchestrated" the dive in the price of another mainboard-listed counter Innopac - although Soh denied it. This led remisier Leroy Lau - said to be helping the accused to execute manipulative trades - to suffer trading losses of at least S$32 million.

Mr Tai and some members of the accused's inner circle suffered losses as well, but what irked the witness about Soh was "the way he skinned Leroy 30 over million (dollars) at one shot".

Mr Tai felt indignant as well when Soh directed him to discredit three persons who were believed to have fingered Soh during investigations. One of them was a loyal follower of Soh for over a decade - Peter Chen Hing Woon.

The witness recounted that when he was about to change his mind and not be the fall guy for Soh, Dick Gwee Yow Pin - also part of the inner circle - shared how he (Dick Gwee) "took the bullet for John" in the market rigging of Mid-Continent Equipment in 1998 and was sentenced to an imprisonment of three months.

"He (Gwee) said it's not worth to take the shot for John in BAL. Because after Dick was released from prison, John initially didn't treat him as a friend, saw him (Gwee) in the street and treated him as transparent," Mr Tai testified.

The hearing continues.