Peter Chen was once described by the John Soh Chee Wen, the alleged mastermind behind the manipulation of three penny stocks in 2013, as his “key wingman”. Not only did Chen provide legal services, but he also helped run business development at LionGold Corp, one of the companies believed to be controlled by accused Soh.
The latest prosecution witness to take the stand, Chen, in his conditioned statement, spoke of how he was told to open bank and trading accounts with various brokerages under his own name. This was done with the understanding that the accounts would be used by Soh to trade shares.
Chen added that he accepted the arrangement despite Soh being bankrupt. He did so because he was keen to tap into Soh’s political and business influence in Malaysia at the time. “I had hoped that doing him this favour would lead to Soh providing me opportunities to elevate my standing in the corporate world and to engage me for legal work subsequently,” Chen said.
In the wake of the crash of the three penny stocks, Interactive Brokers (IB) demanded that Chen pay up losses amounting to $22 million, which was way above the $2 million Chen thought he was able to sign for. According to Chen, a fake email address was given to IB. He believes he was impersonated by Ken Tai, the broker handling the account, under Soh’s instructions. When IB pressed Chen for repayment, he disclaimed knowledge of the trades. This then angered Soh, he added.
When investigators began probing Chen in April 2014, he was warned by Soh to stand firm and put a buffer between them. “Soh told me that he had ‘people on the inside’, and that ‘if you say otherwise, you have all the brokers in town against you. And my lawyers will tear you down’,” he added.
As the investigations continued, Soh repeated this threat several more times between 2014 and 2016. He even claimed he had a “mole inside CAD (Commercial Affairs Department)” and would know what everybody told the authorities. Chen added Soh also ordered all those under investigation to “better sing to the same tune” and that if anyone said otherwise, they would “face [his] wrath”.
Soh and his co-accused Quah Su-Ling face 189 and 179 charges respectively in their longrunning trial for allegedly manipulating shares of Blumont Group, LionGold and Asiasons Capital (later renamed Attilan). These three counters crashed in early October 2013 which wiped out some $8 billion from the Singapore market.
Connections
Chen was introduced to Soh back in 1993 or 1994 by his then girlfriend Ung Hooi Leng, who was a member of the Malaysian Chinese Association (MCA). Ung is also the godsister of Soh who was then the MCA chairman of a region in Petaling Jaya, Selangor.
Initially, Chen helped Soh hold on to shares in companies such as IPCO and Innopac. Soh was then under investigation for his role in Omega Securities in Malaysia. Chen, who studied law in Australia, also provided legal services to Soh. Eventually, 90% of Chen’s fees came from work given or referred to by Soh.
In 2009, Chen ended his law practice and with a fixed monthly pay of RM8,000, he started working for Soh full-time. Chen was tasked to be a nominee director and shareholders for Soh in several private and companies and to help doing due diligence for various mining businesses.
One of the companies, Think Environmental, which was renamed LionGold in 2011, was used by Soh to undergo a rapid expansion by acquiring stakes in various other listed gold mines in Australia and Canada. “With these corporate developments, interest in Think Environmental shares would be generated in the Singapore stock market,” said Chen, who was named director of business and corporate development. Soh even told Chen he was groomed to be the CEO.
Aside from the developments at LionGold, for more than a decade between 2000 and 2013, Soh asked Chen to open various bank and cash and margin trading accounts in Singapore. Apart from IB, Soh and Ung arranged for brokers including Alice Ang, Ong Kay Chye and Andy Lee Chee Wee to open accounts under Chen’s name. The list of brokers was to later include Wong Xue Yu, Chua Lea Ha and Henry Tjoa, who were from various local firms. “This was on the understanding that the accounts would be controlled and used by Soh. I agreed to do so.”
Tai, who had taken the stand earlier in the trial as a prosecution witness, was another broker who dealt with Chen and was working on the IB and Saxo accounts on Soh’s instructions. Chen said he was surprised to hear directly from Tai, who told Chen to sign the paperwork when an account under his name was to be opened with Saxo. “I remember being upset that Tai was speaking as if to give me orders to open the account. As far as I was concerned, I only took instructions from Soh,” said Chen.
Even as he got busy in his day job at LionGold, Chen would take trading instructions from Soh and relay them to the brokers. However, from 2011, he started receiving account statements showed a “significantly” higher level of trading activity and frequency than those placed by Chen on Soh’s instructions. “I was shocked and asked Soh about this, as I was concerned about the financial exposure in these accounts, given that the accounts were in my name. He told me not to worry and that everything was under control. He assured me that he was responsible for the finances in these accounts, and that these accounts were just conducting discretionary trading,” said Chen.
“I trusted Soh’s reassurances to me, and accepted that there were trading activities being done in the accounts under my name on Soh’s instructions, without my involvement. I have never placed any of my own trades in these accounts. I also did not give any of the trading representatives discretion to trade on my behalf,” he added.
Chen claimed Soh handled all the cash and collateral used for the trades. He also did not know how much trading profit was made but when there were losses, Soh would arrange for Quah or Goh Hin Calm, described as a treasurer of the share manipulation scheme, to send a “dispatch guy” to deliver cheques over to make good on the payments.
“What the hell. Let’s do it”
Apart from making trades, Chen said Soh was also busy setting the overall strategic direction for LionGold from 2010 up till after the crash. There were meetings with Wong Choy Yin (who subsequently became the executive director and CFO of LionGold), Tony Tan (who worked for Chen in business development in LionGold), Roger Poh (who was put on a retainer to take care of investor relations matters) and company chairman Tan Sri Nik Ibrahim. “Soh led those meetings and made all the key decisions,” added Chen.
In January 2013, Nicholas Ng, who was previously CEO of DMG Securities in Singapore, was made CEO of LionGold. With that, Soh became less involved in the daily operations. “However, he continued to make all critical decisions in LionGold. No acquisition deal would proceed without Soh’s approval,” said Chen.
Tony Tan also helped draw up a shortlist of 43 potential acquisition targets, Chen said. All of them were Australia-listed gold miners with market value of below US$30 million.
The deal-making was especially intensive between 2012 and 2013 when LionGold announced the acquisition of stakes in miners such as Citigold, Brimstone Resources and Castlemaine Goldfields. But LionGold was not the only investment vehicle. Soh also asked one Richard Chan and Steve Phuah, who were working at another listed company ISR Capital, to approach targets from the same list drawn up by Tony Tan. “We did as Soh instructed,” said Chen.
Things were not always smooth sailing though. Once, when LionGold made an approach on Bolivian company Vista Gold Antigua, in an email sent on March 13, 2012, Soh wrote, “Good to go. The risks are there but what the hell! Let’s do it.” However, Ng, LionGold’s CEO-in-waiting, and several others had their reservations. In an email on Nov 5, 2012, Soh replied, “Can we focus on finding answers instead of pointing out the two hundred ways why we should continue our perpetual mental masturbation!”
In a private text message sent to Chen, Soh, who used to set the tone for all LionGold corporate matters, stated: “Woe betide anyone including Raymond and Nick if they think I am going to recede into the background and they run the co as they like.”
But in subsequent replies, Soh’s tone was more measured, especially to those sent to the larger group via email. In the emails, Chen said Soh kept up with the consultative and positive image he generally portrayed, and cited a survey of the mine done by Wong Choy Yin, who quit LionGold in August 2012, and Philip Bruce to justify the deal, which eventually went ahead and was completed in December 2012. After Ng was made the CEO, Soh would begin his emails by stating he was offering his “two cents worth”, as if to accord some respect to Ng’s position.
Nevertheless, Soh was a constant presence and source of influence over LionGold throughout the saga. For example, then director of investor relations Lesley Bendig was unhappy that Roger Poh was interfering with her work. Chen emailed Soh to tell him to “sort out Roger’s role. Too many generals” and lay down clearly the roles and responsibilities of all the persons involved, especially since only Soh had the authority to manage everyone.
But for all of Soh’s influence and planning, not all of LionGold’s deals struck gold. On the day of the crash, LionGold was about to sign another takeover deal. The CEO of Peruvian company Minera Nueva was at LionGold’s office for the signing but Raymond Tan, who was then the company’s executive director, saw that the share price had crashed. As the acquisition was to be completed via a share swap, the crash in LionGold’s share price made the terms unfavourable and the deal was cancelled.
When Chen tried to get an explanation from Soh, the latter did not explain but sighed and said he would have to “rebuild”. Very soon, Chen started receiving calls from the brokerages and banks to make good the trading losses or for margin calls.
