Closing in

He has spent more than 30 months in remand, but looks none the worse for it. Soh would at times exchange a quip or two with his co-accused and romantic partner, Quah Su-Ling, who is out on bail. The courtroom attire of the former CEO of IPCO International (now known as Renaissance United) is decidedly more fashionable, but her poise belies her anxiety.

While Quah listens intently and takes notes during the proceedings, a faint smile can usually be seen on Soh’s face as he watches his defence lawyer N Sreenivasan demolish one prosecution witness after another.

Soh faces 189 charges of stock manipulation, cheating and witness tampering in relation to the 2013 penny stock saga, when shares in three companies — Blumont Group; Asiasons Capital, now known as Attilan Group; and LionGold Corp (collectively known as the BAL stocks) — rose sharply and then crashed in a matter of months. Quah faces 178 charges of stock manipulation and cheating.

The duo’s trial, which began on March 25, has been adjourned after five consecutive weeks of hearing. A dozen witnesses, mostly brokers and officials from brokerages except for two men representing financial institutions, have been called to the stand by the prosecution. For many of them, however, their testimonies had put both them and the securities trading industry in a bad light. Some confessed during cross-examination to ignorance and “imprudent” actions — rules were bent and client procedures not strictly followed. A few were compelled to admit to lying to investigators about their roles in the lead-up to the crash in October 2013, which saw a staggering $8 billion in market value wiped out.

Everyone who swore to tell the truth on the witness stand might have felt like they were on trial themselves.

Witnesses grilled

The first witness, Jack Ng Kit Kiat, cut a meek figure under questioning by the defence lawyers. He gave confused, dithering testimony and drew withering looks and barbed remarks from Sreenivasan and Philip Fong, counsel for Quah. As an OCBC Securities remisier at the time, Ng took trading instructions from Quah, who was referred to him by another client, Kuan Ah Ming, a known associate of Soh’s. Ng also took orders for other accounts belonging to other people as instructed by Quah — without proper authorisation.

The second witness, RHB remisier Alex Chew Keng Chiow, also struggled to keep his story straight. He admitted that even his third conditioned statement to the Commercial Affairs Department (CAD) might have contained some untruths. “My intention is to tell the truth, [but] inside me I am still fearful. It is a struggle,” he disclosed, pausing often to control his emotions.

Still, not everyone buckled under pressure. Hafeez Ahmad Choudry, chief risk officer of Crédit lndustriel et Commercial (CIC), handled patiently the repeated questioning. He denied knowing about Soh prior to the crash. “Why do you talk about someone you don’t know?” asked Sreenivasan. “Because I was told to appear before the prosecution in this case,” Hafeez answered calmly.

Sreenivasan pointed out that Hafeez had mentioned Soh and Quah in his conditioned statement, but at no time were both of them mentioned as persons with power of attorney for one of the accounts with CIC that was used to trade. “[Again] why are you talking about someone you don’t know?” Sreenivasan pressed.

“Like I said, I was called by the CAD to appear before the prosecutor in relation to the Carlos Place account with CIC, and during the course of the interviews, I was asked if these two individuals were ever part of the arrangements with CIC,” Hafeez answered stoically.

For KGI Securities’ head of risk Tan Seow Kiat, his taking the stand on May 16 was not his first. In December 2016, AmFraser Securities, before it was acquired by KGI, took a former client to court and managed to recover losses of $1.9 million incurred because of the crash. At the start of Tan’s cross-examination, Quah’s lawyer, Fong, amiably said: “It’s good to see you again.” Tan replied: “I’m not too sure about that.”

When Andy Lee Chee Wee, a remisier from Lim & Tan Securities, took the stand, he had no qualms pushing back what he considered unfair assertions. Asked by Sreenivasan why he had lied to CAD instead of declining to answer the officer’s questions, Lee replied that he “didn’t know [he] could do that”, and defended his statement. “To me, it is concealment. I told the lies because I wanted to conceal their identity, and the thing is, I didn’t know that I could decline to say ­anything during the investigation. Yes, the statement stated [that] I had the right to decline, but I didn’t know at that point in time I could do that.”

Lee also frequently disagreed with Fong’s assertions. He said it was unfair to expect him him to recall which trades were instructed by Quah. “You asked me to look at the [phone] number now; I don’t even recognise this number. It could be from Quah Su-Ling; I don’t know, but if you pinpoint these few trades and say that I am lying because of this, then I think it is very unfair to me,” he countered in an exchange with Fong. “I am just trying my best to tell the truth of the facts and the thing is, seriously, if you look at the number of trades, they are in [the] hundreds of thousands, you know. How am I going to remember every single detail?”

When Fong said that Lee’s statement was “rubbish,” he fired back: “I don’t think I lie in this court. I agree I lied in the CAD investigation, but not here. And whether you say ‘is it to benefit myself’ — yes, to a certain extent — but my main reason throughout the whole damn years was to recover the losses, and how can you say it is rubbish?”

Lee suffered losses of $1.8 million from handling the accounts held under the names of Soh’s various associates, including Peter Chen Hing Woon, former senior executive at LionGold, and Neo Kim Hock, former executive chairman of Blumont.

OCBC Securities remisier Angelia Poon was another witness who saw it fit to defend her conditioned statement and actions when faced with assertions by the defence counsel. She denied that she had lied in her statements at first, claiming that the answers to CAD were “textbook answers” rather than lies. “I technically gave a textbook answer that I know my client, I know that he gave the trading account number, the quantity and the sale,” she said. But under repeated questioning, Poon finally conceded that she did lie to CAD. “I was there without counsel, I guess I was fearful.”

Significantly, in Lee’s conditioned statement, he recalled a presentation given by Soh at LionGold’s office, where Soh said Blumont’s share price would hit $5. “He claimed that Blumont would be the next Rio Tinto,” Lee said.

He also said Soh hawked LionGold and Asiasons shares. “He said Blumont would be the ‘mothership’, while Asiasons and ­LionGold would be the ‘subsets’,” Lee said in his statement. As a result, Lee bought Blumont shares, and also did so on behalf of a few friends who had asked him to trade on their behalf. Soh’s well-attended presentation took place in September 2013, less than a month before the stocks crashed.

Lawyers clash

The disagreement over the credibility of statements provided by one witness led to a big argument between the prosecution and defence over the issue of litigation privileges.

Ong Kah Chye, a former dealer with Maybank Kim Eng Securities, took the stand on May 23 — his last day of work at the brokerage. Under Sreenivasan’s cross-examination, Ong refuted the notion that his departure from Maybank was related to his involvement in the penny stock crash. At 73, Ong said, he had already wanted to retire a year ago.

At one point, DPP Peter Koy accused the defence counsel of asking questions that were a “distortion of the facts”. He disagreed with Sreenivasan’s questioning of the process of recording the conditioned statement of the witness. “I do wish to object to this line of questioning because the line of questioning has gone into the preparation of the conditioned statement… This is protected by litigation privilege, and my learned friend should not go into those areas,” Koy said.

He went on to explain the difference between litigation privilege and legal advice privilege. “[Legal advice privilege] is concerned with protecting confidential communications between lawyers and clients, and [litigation privilege] is concerned with protecting information and materials created and collected for the dominant purpose of litigation,” Koy pointed out.

Sreenivasan had delved into the details of how Ong’s statement to CAD was recorded, as Ong admitted in court to lying to the CAD investigating officers because of his friendship with Soh. He was also agitated by Ong’s flip-flopping on who had given him instructions to perform trades because Ong had identified the instructor based on the trade logs and timestamps of phone call data shown to him.

Sreenivasan said in reply to Koy’s explanation: “I will just let my learned friend know there have been proceedings in court where a DPP who recorded a conditioned statement was put on the witness stand. So, there is really no litigation privilege, Your Honour.”

Sreenivasan later asked Ong whether he was informed that the Singapore Exchange was coming down on the BAL counters. Koy interjected, asking for a clarification on what “coming down” meant, to which Sreenivasan said: “Your Honour, the witness can ask me. This kind of interruption is intended to disrupt. Your Honour, cross-examination is not easy to do. Unless there is a proper objection under the Evidence Act, he should not stand up.”

Role of SGX and regulators

When Lim & Tan’s executive director Esther Seet was asked whether she knew how to identify market manipulation, she replied that she had not seen it directly, but knew the signs through the guidelines issued by the Singapore Exchange.

“Could you tell us which guidelines?” asked Sreenivasan. “I think SGX Practice Notes 13,” said Seet without hesitation. Upon checking and confirming that it was indeed the correct set of guidelines, Sreenivasan quipped: “I am very impressed, Ms Seet.” She replied: “So am I.”

In Seet’s testimony, however, she agreed with Sreenivasan that an SGX designation — which was imposed on the BAL stocks on Oct 6, 2013 — would cause severe downward pressure on their prices. “Logically, any imposition of trading restrictions would definitely affect the market, because a restriction is quite negative,” she told the court.

What to expect at next stage

So far, a number of prosecution witnesses have been compelled, under cross-examination, to admit to have lied or told half-truths. At best, they appeared unsure and admitted to flouting procedures.

Still, these witnesses, especially the remisiers, are considered to be at the periphery of the case. Presumably, they played no part in the planning of the share manipulation, and were happy to execute the series of trades that led to higher commissions.

When court proceedings resume on Aug 19, a longer list of prosecution witnesses — the exact number has yet to be finalised — will be called. Significantly, compared with those called in the first part of the trial, quite a few of them are seen to be much “closer” to Soh and Quah.

The list is expected to include Soh’s alleged former girlfriend, Adeline Cheng Jo-Ee. Apart from her accounts at CIC, Cheng and her father, Cheng Wah, had trading accounts at Coutts, which held shares in Blumont and Asiasons Capital as collateral. The private bank had to write off $4.7 million in losses.

There is also another group of remisiers and traders who had much more frequent and direct contact with either Quah or Soh. They include Gabriel Gan Tze Wee, Ken Tai Chee Ming, Leroy Lau Chee Heong and Husein Tjoa. During Soh’s bail hearings, the court was presented with audio recordings of conversations between Gan, a former DMG broker, and Soh, on what to say and do when CAD officers paid a visit.

Quite a few other high-profile financial institutions are involved as well — and they have not been called yet. For example, Goldman Sachs and Saxo Bank were known to have lent money to Quah and other individuals linked. Goldman’s sudden cancellation of Quah’s credit line, demand of near-immediate repayment and subsequent forced-selling of BAL shares held as collateral were believed to have contributed to the crash.

At least two other individuals, closely linked to Soh and Quah, are to take the stand as well. The first is Chen, who was LionGold’s director of business and corporate development. Besides letting the alleged masterminds use his broking accounts, Chen, in the run-up to October 2013 was the frontman for ­LionGold, talking to investors and media on how the string of proposed acquisitions of gold mines made the company a compelling investment.

Goh Hin Calm, meanwhile, was supposed to stand trial with Soh and Quah. However, the former interim CEO of IPCO International chose to plead guilty in March this year, before the trial began. He has been sentenced to three years’ jail. Goh has been described by prosecutors as the “treasurer” of the entire share manipulation operation. The court was told how, for years, Goh helped Quah, when she was CEO of IPCO, to run errands and carry out administrative tasks.

If they are called to the stand, the testimony of Chen and Goh would certainly be revealing.