The first time Dick Gwee Yow Pin heard John Soh Chee Wen talk about the prospects of gold mining company Think Environmental in late 2011, he felt Soh was trying to buay koyok. The way Soh described sand-panning for gold did not impress Gwee and a couple of other brokers present.
The phrase, which means “selling ointment” in Hokkien, carries the same negative connotations as “selling snake oil” and is used in the trading community to describe someone who is trying to pump up interest in a stock with an exciting investment story.
About a year later, Think Environmental, which had changed its name and formally ditched its business of environmental engineering to gold mining, became what was known as LionGold Corp. This time around, Gwee bought shares in the company.
Gwee, who was the latest witness to take the stand at the trial of Soh and co-conspirator Quah Su-Ling, told the court how Soh, his former boss turned friend, had stressed that LionGold was led by notable figures. The son of former Malaysian finance minister Tun Daim Zainuddin was on its board while Nicholas Ng, the former CEO of DMG Securities, was its CEO. “I believed this was a very good thing. I felt the employees at LionGold were all very experienced,” said Gwee.
Soh and Quah are on trial for allegedly orchestrating an elaborate scheme to manipulate the prices of three penny stocks in 2013. The three stocks were Blumont Group and Asiasons Capital, which has been delisted, and LionGold, now renamed as Shen Yao Holdings. When the share prices of these three counters crashed on Oct 4, 2013, some $8 billion in market value was wiped out.
Divide and conquer
Gwee had known Soh longer than any of the other prosecution witnesses. Gwee, who graduated from the National University of Singapore in 1982, first met Soh back in 1984 when Gwee was introduced by a university classmate to join WW Wings where Soh was the owner and managing director.
“The first impression John Soh gave me was that he was a very smart guy. He was also a very hard-working person. To me, it is rare to find someone who is both smart and hardworking. And I also find that he can be very persuasive,” said Gwee.
“Based on my interactions with him, even though he was English-educated, he had a much better understanding of Chinese history than those who are Chinese-educated. He’s highly confident of himself and very meticulous in his thinking,” said Gwee, who chose to give his testimony in Mandarin.
In 1993, Soh acquired control of Innopac Holdings after which Gwee was made executive director of the company. Innopac had three main businesses: Paper-trading, chicken-farming in Tianjin, China, and it also operated the Shakey’s Pizza chain in Singapore.
Gwee told the court that he, as an executive director, should know the various businesses of Innopac, but was told by the person running Shakey’s Pizza that Soh had told him Gwee should not be involved. “To me, I feel that the way John Soh managed the businesses was based on divide and conquer,” he told the court.
Over time, the relationship between the two men evolved from that between a boss and his subordinate to one between friends. However, the Mid-Continent case of 2001 put a strain on their relationship. From 2001 to 2002, Gwee was convicted for his role in cornering shares of Mid-Continent Equipment Group and sentenced to three months’ jail. The court was told that some misunderstanding resulted between the two men over the case although they had put it behind. “Your Honour, I feel that both of us are gentlemen. Once the incident had passed, we just got over it,” said Gwee.
On his release in 2002, Gwee went to work in Shanghai as a consultant and returned to Singapore only in 2008 after his mother fell ill. While Gwee was in China, the two men kept in contact occasionally, exchanging greetings during birthdays or New Years.
Escorting the hearse
In 2011, Gwee found out that, just like his mother, Soh’s wife had cancer. It was this common experience that brought the two men closer. “At that time, my conversations with John would mainly focus on the different types of treatment for cancer patients, and he would also give me his opinions,” he told the court.
In August 2011, Gwee and his wife were just about to fly to Shanghai when Soh called to say his wife had passed away. Gwee cancelled the trip and rushed down to Gleneagles Hospital, where he kept Soh company, helped with the funeral arrangements, foot some of the payments, and even escorted the hearse back to Kuala Lumpur. “I was quite surprised that there were only two of us throughout. No one else was around except the two of us,” said Gwee.
At the wake, Soh told Gwee that he was quite worried as there was hardly any trading interest in Think Environmental. “He told me to enter the market to do some trading. My view was that because he was too preoccupied with his wife’s funeral, he did not pay much attention to this share, hence his concern that there wasn’t much activity for this share,” said Gwee.
When asked by deputy public prosecutor Jiang Ke Yue what his response was, Gwee said he did not agree with Soh and “just walked away”. Gwee explained, “If I buy a particular stock, my only objective is to make money. At that point in time, I didn’t think that was a good time for me to enter the market.”
Keeping vigil
Despite Gwee’s scepticism over Soh’s activities in the stock market, their ties deepened. During the Lunar New Year of 2013, Soh and Quah visited Gwee’s terminally ill mother at home, which made Gwee “very grateful”. At his mother’s wake a few months later, Soh and Quah would turn up and accompany Gwee at the vigil. “I would always be grateful to such a friend who cared for us,” Gwee told the court.
After the funeral of Gwee’s mother, he accepted Soh’s invitation to visit LionGold’s new office in the Mohamed Sultan Road area, near where Gwee lived, to stave off boredom at home. However, he told the court his real reason for eventually dropping by LionGold’s office was to find out personally what was going on in the company.
According to Gwee, Soh kept telling him that the share price of LionGold would go up. “John kept saying that he’s trying to build LionGold into a very good company. I wanted to witness this with my very own eyes, to see whether this will be realised or not. Personally, I was already buying and selling in LionGold’s shares, so I wanted to know whether they had already started selling their shares or not,” said Gwee.
By “they”, Gwee was referring to not only Soh but also related parties like Quah. He told the court he also included brokers involved in the case like Ken Tai Chee Ming, Gabriel Gan Tze Wee, Ong Kah Chye, Lee Lim Kern and Wong Xue Yu, whom Gwee heard suffered the most losses in the wake of the crash.
Renaming Blumont
Gwee told the court he felt that Soh had changed for the better. Soh, according to Gwee, was all along acknowledged to be a “very smart person”. However, Gwee felt Soh did not “treasure his credibility” back in the 1990s — a period when Soh was already known and active in the market. Soh, according to Gwee, acknowledged he had gained a reputation for being a “pump and dump” operator. In 2013, Soh told Gwee he was a “changed person” and Gwee found several reasons to believe so.
For example, Gwee told the court how Soh asked him to help arrange a meeting with top corporate lawyer Lee Suet Fern, who was advising Innopac back in the 1990s. At the meeting, Soh asked Lee to help contact “a person” at the Singapore Exchange to explain how he wanted to “build up” LionGold and correct the market perception that he was still a “pump and dump” person, claiming that he was not. Soh felt that the market had misunderstood him. “He was hoping that Mrs Lee would be able to link him up with a person in charge from the SGX,” said Gwee.
According to Gwee, Lee, equally well known as the younger daughter in law of Lee Kuan Yew, said she would “try her best” and contact Soh directly if there was a follow-up. “Based on my observation, the fact that John discussed it with Mrs Lee to try to get her assistance to meet up with a person from SGX directly showed that all these could not be false. That’s why I find that he was a changed person,” said Gwee.
Furthermore, when prompted by DPP Jiang, Gwee noted that LionGold’s share price was already around 80 cents and soon moved quickly to above $1 and more. Gwee, drawing on his experience trading shares, believed that no one could do a pump and dump of counters already priced above 80 cents. “And this contributed to your view that John was a changed person?” asked Jiang. “Yes. This time it was not pump and dump,” said Gwee.
Gwee added that there were a couple of other indicators that made him look at LionGold favourably. The stock was included in some FTSE and MSCI indices and the company was even promoted by a bulletin published by SGX that had used LionGold as “an exceptional example” of how the Singapore government was trying to promote the mining sector.
“In it, it was mentioned the original share price of LionGold and the current share price of LionGold. So, in my view, I took it to mean that SGX actually approved what LionGold was doing at that point in time,” said Gwee.
Gwee told the court another sign that Soh was a changed person was that he had asked for help to translate his late wife’s name, May Foong, into English. The reason? Soh was planning to rename Blumont after her. “Besides John telling me this, I also heard it in the market about this matter as well. Why was this significant to me? Because I feel that no one would use his late wife’s name to make a joke out of it,” said Gwee. “All this made me feel that he was indeed very serious about doing all this.”
While Soh regularly urged Gwee to “come over to help” and be a director at the various companies he allegedly controlled, Gwee did not agree. “I told him that I don’t want to because during that process, I was still observing him,” said Gwee, who will continue to give his testimony.
