Picture of John Soh: Bloomberg
John Soh – the alleged mastermind of the 2013 penny stock saga – reckons that traders had viewed his involvement in projects as a way to spur more investors to jump on the bandwagon.
For example, Gabriel Gan, one of the ex-DMG brokers who allegedly helped Soh trade, thought “my so-called presence will be a catalyst to his friends investing”.
Soh, on his part, also reciprocated the correspondence with these "friends", for the most part. “I relish the part where someone wants to communicate, so obviously, I would reciprocate,” he told the court during his cross-examination by Deputy Public Prosecutor (DPP) Teo Guan Siew on May 31.
Soh and his co-accused and romantic partner Quah Su-Ling are on trial for orchestrating Singapore’s largest share manipulation scheme between 2012 and 2013 involving three penny stocks: Blumont Group, Asiasons Capital (now Attilan Group) and LionGold which has been renamed Shen Yao Holdings.
SEE:Richard Chan, John Soh's blue-eyed boy, ends up saddled with $1.1 mil in trading losses
The eventual collapse of these counters – collectively referred to as BAL – in October 2013, wiped out some $8 billion in market value.
Gan had been among the many traders whom Soh supposedly spoke to for market updates, prior to the crash. According to the records put forward by the prosecution, there were 1,261 messages between Soh and Gan between August 2012 and October 2013.
Soh allegedly gave trading instructions to a close group of brokers but only Gan was “keen on Malaysian politics [and had] professed to understand the undercurrents,” recalls Soh, a former high-ranking member of the Malaysian Chinese Association.
See also: 2013 penny stock crash mastermind and co-conspirator sentenced, drawing saga closer to closure
As a result, the two were “constantly on the line” in the run up to Malaysia’s general election in May 2014.
Aside from this, their conversations revolved around the BAL counters and possibly other shares, Soh mulls, adding that Gan had probably introduced several rich individuals to him.
Soh had earlier described Gan as one of the four ‘rogue traders’. The other three individuals are Ken Tai Chee Ming, Henry Tjoa Sang Hi and Leroy Lau Chee Hong. They have all testified against Soh earlier in the trial.
Triggers
Soh told the court that he had been a “vigorous promoter” and so some of the advice he had given Gan may possible have triggered him to trade the shares Soh promoted, specifically LionGold and Blumont.
For instance, there trades for Blumont that are made under the account of Lim Kuan Yew, a known Soh associate, following communications from Soh to Gan.
“Blumont I did promote,” Soh agreed. “I wouldn’t say it could have been my promotions, it could have been triggers,” he added.
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Drawing reference to the evidence given by the “rogues” or “big boys”, Soh told the court that Quah had nothing to do with Blumont and so them receiving trading instructions from her could not be “logical”.
As for Asiasons, Soh said he did not promote that counter. As such, the trades made by Gan and his clients in that counter were from Gan’s own “triggers in a bid to generate more trading commissions from his own clients who entrusted Gan with discretionary trading rights.
According to Soh, he was asked by many people if they should buy Asiasons as well. “Many of these people are chartists. They ask [whether to buy], I say no, the counter goes up and they think I’m bluffing them,” he stressed. “Whether they believe that I have nothing to do with Asiasons, that’s up to them,” he added.
Whose number?
During the course of the cross-examination, Soh revealed that Quah had not known Gan very well. The two met, likely through DMG connections, but Quah “stayed clear” of Gan seeing as he was a close friend of Dick Gwee, a friend of Soh’s for some four decades.
Due to a previous takeover fight, Gwee and Quah have a history of bad blood.
Against this backdrop, Soh was skeptical if Quah had been the one communicating with Gan using a particular phone number. “I doubt she would want to something to do with Gwee and his associates,” said Soh.
He wouldn’t know if it had been used by Quah or not because – based on Tai’s evidence in court – he realised that the phone had been used by somebody else for long periods of time.
“I cannot fix the dates because there are too many numbers and I cannot remember,” he said.
Soh went on to recall that some phones had been used by Malaysians but he had no knowledge on what their numbers were. “I only got to know after many years when I was in remand,” he added.
This realisation dawned on him when “people like Gabriel accused me of witness tampering,” said Soh, referring to the audio recordings made by Gan secretly between himself and Soh. “Even when he accused me, I was ‘huh’?,” he added, looking rather miffed.
When probed on whether Quah could have been the one using this number, Soh paused, saying that this may not have been the one used by her.
However, Soh noted that there was a point where she had started to use it possibly sometime in 2013 after Ung Hwee Ling – one of the Malaysian account holders - had been diagnosed with cancer and needed help to relay messages.
Soh also recalled Tai’s evidence of having received calls from Quah through this number from the second half of 2013. This evidence, “helped me connect the dots when I was sitting in the dock here,” Soh said.
DPP Teo put forth several instances where arrangements were being made to pay up for contra losses.
In one case, Goh Hin Calm is seen paying for the contra losses under Lim’s account. Soh attributed this arrangement to Malaysians helping each other. “I have no idea how it’s done and who arranged it,” he quipped.
Still, Soh told the court that Quah was informed when funds fell short. She would then help to raise funds to make up for the difference.
Weakness for sob stories
The court was shown a message from Soh to Gan: “Don’t worry la, once money is in I will help you settle. I won’t let you go bankrupt for 100,000”.
According to Soh, that was when Gan, following the crash, had come to him with “all kinds of sob stories”. This included things like his wife wanting to divorce him and his parents going to lodge a complaint on him at DMG.
“Gan very adroitly avoided to go into details on how he suffered losses, playing into my vulnerabilities,” Soh said. “I’ve got this weakness for sob stories,” he noted, adding that he and Gan got together in hopes of working hard and making money.
To this end, he and Gan got working on a fund-raising deal at another listed company, Sino Construction, which has been renamed MMP Resources. They expected to pocket some $800,000 and between 40% to 50% was meant for Gan for helping to place the shares.
In another instance, Soh is seen telling Gan: “If you need I can engineer those things”.
The context of this, Soh explained, was that Gan had over used his credit cards and claimed that some 10 to 20 credit card companies were coming after him.
Gan claimed that Singapore’s credit counselling bureau had said they would help him structure his payments if he could get two sponsors. Soh found a Malaysian doctor who seemingly fit the bill to be a sponsor without liability.
However, this fell through as Gan needed a guarantor.
“I know we have money coming in from the placements we have done under Sino Construction,” responded Soh when asked why he was quite ready to go out of his way for Gan.
Soh told the court he prioritised paying Gan but the placement with Sino Construction ended up – in Soh’s words – being a mess. This was as payment was coming in in dribs and drabs. “It was like a cursed deal from the start. We went all out because we were desperate for money,” he said.
The court heard that Soh looked at other opportunities such as with small Australian mining projects. His hope was to “restore” those who – had suffered losses because of BAL.
When asked by DPP Teo why he bothered doing so, Soh said: “Mr Teo, sometimes, it’s about compassion”.
DPP Teo then asked what Soh meant by saying that it was his responsibility to ‘restore’ Gan. “I might have said something like that in a melodramatic way,” he said sheepishly.
The trial resumes on 1 June with DPP Teo’s cross-examination of Soh.
