Quah referred to Soh as the towkay: prosecution witness

THE prosecution portrayed the 59-year-old John Soh and the 54-year-old Quah Su-Ling as the masterminds behind the 2013 penny stock crash, accusing them of orchestrating "the most audacious, extensive and injurious market manipulation scheme ever in Singapore", in which they had intended to use the manipulated stocks as collateral for financing, which would in turn be used to perpetuate the illusion of a bull run.

When the prices of the penny stocks at the heart of the conspiracy - Blumont Group, Asiasons Capital (now Attilan Group) and LionGold Corp or collectively known as BAL - reached a desired level, the shares would also be used to finance corporate deals. After corporate announcements were made, the share prices would be driven up further, giving the appearance that the deals had a positive impact on the market.

The collateral grew more attractive as the scheme went on, and allowed the duo to obtain more and more financing, the prosecution said. "In effect, this was a vicious cycle of deception, cheating, and market manipulation."

The duo allegedly tapped their personal and business networks of 60 individuals and corporations to control a secret web of 189 trading accounts at 20 local and foreign financial institutions, which were saddled with over S$350 million of unpaid trading losses when the BAL prices tanked and lost S$8 billion in market value in early October 2013.

Among holders of the accounts said to be manipulated by the two Malaysians now standing trial for a total of 367 charges in a hearing that is expected to be long-drawn out are Soh's "romantic partner" Adeline Cheng Jo-Ee, his two sons and other family members, Quah's mother, her brother-in-law, and then-subordinate at Ipco International (now Renaissance United) Goh Hin Calm, 59.

Co-accused Goh, who has pleaded guilty to abetting Soh and Quah in the manipulation scheme, helped to manage the finances and track the shareholding.

Goh is currently serving a three-year jail term. He would be appearing as prosecution witness.

In 2012-2013, the senior management members and major shareholders of BAL, subsidiaries of BAL, and related companies were also said to have allowed their trading accounts to be used.

The prosecution charged that the accused, having controlled these accounts, employed the features of contra trading and margin trading, and traded a large volume of BAL shares among themselves, the prosecution charged.

They allegedly cornered the market for the BAL stocks, responsible for 60 per cent, 88 per cent and 90 per cent of Blumont, Asiasons and LionGold trading volumes respectively.

The prosecution seeks to show that the accused communicated with the trading representatives (TRs) a total of over 40,000 times for the controlled accounts, with BAL trades being placed within 10 minutes.

First prosecution witness Ng Kit Kiat testified that he took trading orders from Quah and her "colleague" Peter Chew for others' accounts, despite there being no written authorisation from the account-holders.

When he looked for Quah to settle S$1.8 million contra losses, he met Soh instead.

"I found him familiar and recognised him as John Soh because I had seen photographs of him in the newspapers during the 1980s. He was a prominent figure in the stock market at that time."

Soh allegedly assured Mr Ng not to worry about the losses, and when he gave his contact numbers to Mr Ng, the latter could recognise them as those used by "Peter Chew".

"I asked Soh if he was Peter Chew. John Soh just smiled at my question."

When the remisier talked to Quah later, she allegedly said that Soh was the towkay (boss) and would settle the losses.

Cross-examination of Mr Ng will continue on Monday, and another trading representative Alex Chew Keng Chiow takes the stand after him.