Picture of James Hong: Albert Chua/The Edge Singapore
It has been over a month since John Soh Chee Wen — the alleged mastermind of the 2013 penny stock saga — took the witness
stand. Throughout this time, he has stuck to his stance of not having given trading instructions, as he sought to push back against the testimonies and accounts made in court earlier in the trial by witnesses called to the stand by the prosecution.
At one point during his examination-in-chief, when shown a series of trading records by his lawyer N Sreenivasan of K&L Gates Straits Law, Soh went as far as to say: “Where are my instructions? Where are Su-Ling’s instructions?”
Soh and his co-accused and romantic partner Quah Su-Ling are on trial for allegedly orchestrating Singapore’s largest share manipulation scheme between 2012 and 2013 involving three penny stocks: Blumont Group, Asiasons Capital (renamed Attilan Group, and since delisted) and LionGold (renamed Shen Yao Holdings).
The eventual collapse of these counters — collectively referred to as BAL — in October 2013, had destroyed some $8 billion in market value.
Pushing the price up
Soh cited several instances to show why he should not be held responsible for the movements of the share prices. For example, on Aug 6, 2013, several trades were made by former DMG Securities broker Leroy Lau Chee Heong that supposedly pushed up the share price of LionGold.
The court heard that the price of a counter goes up when stocks are bought without any constraints. If purchases are made with constraints, the price of a stock will go up within a constrained band. On the contrary, Soh said the price of a counter will go down due to selling pressure if stocks are sold constantly.
In the Aug 6, 2013 example, Lau made “bids” or buy orders even before the market had opened for trading. This is seen to have driven the price of the stock to $1.24, from its market opening price of $1.185, up 5.5 cents for the day.
Overall, Lau bought around 3.3 million LionGold shares that day but he sold 2.9 million shares. This means that his net purchase was around 400,000 shares that day. Sreenivasan asked: “Now, is that the type of buying that will push up the price?”
“No,” replied Soh.
The lawyer also highlighted a call from the so-called “Dubai Room” of the LionGold office — where a lot of the trading activities took place — to Henry Tjoa Sang Hi, who was then a broker with Phillip Securities.
Following this, there was a sell order of 200,000 shares by Goh Hin Calm, and another buy order of 600,000 from Lau.
A former interim CEO of IPCO International (now renamed Renaissance United), Goh was charged alongside Soh and Quah. He
subsequently pleaded guilty and has testified against the duo.
Lau’s purchase of LionGold shares was done, seemingly without any phone calls or text messages to Tjoa. When asked if Lau was supposed to “try to eat up [the] stocks” by putting in a matching order, Soh denied that was the case.
The prosecution said Quah made the call from the Dubai Room that triggered these trades. She made the trade through another broker See Khing Lim from Lim & Tan, using an account under the name of an entity called Friendship Bridge, a subsidiary of IPCO International, where Quah was previously CEO.
From the trading records, Lau made the sell order at $1.21 at 10.32am, which was matched. However, Lau’s trade was put in even before See’s order for Friendship Bridge was placed.
Soh said there was no way for Lau to have known that orders would soon be placed under Friendship Bridge’s account since there had been no calls made to Lau by either Quah or Soh. Lau was trading independently, Soh added.
‘I wasn’t aware’
During his re-examination, Soh also touched on the prosecution’s position that Adeline Cheng Jo-Ee had helped him make trades. Cheng, who runs her own firm Alethia Asset Management, has been described as Soh’s “on again and off again girlfriend” during the trial.
Trading records showed that Cheng had entered an order for 500,000 shares of LionGold shares at 4.17pm on Feb 8, 2013. Soh claimed that this was not bought for him. “The prosecution’s case is that we [Soh and Quah] were desperate for lines, so she [Cheng] did it to help me,” he said.
However, Soh noted that the trades were contracts for differences, where there is no due date. “Once you can enter to buy, means the limit is there, you don’t have to sell, because there is no limit time to sell. There’s no pressure,” said Soh.
“She bought it on her own accord, contrary to the prosecution’s case that we were out of line and we needed her to buy. She was buying it to appease Mr Neo,” he added, referring to Neo Kim Hock, Blumont’s former executive chairman and Cheng’s client.
The court had previously heard that Cheng had a run-in with Neo after Credit Suisse threatened to close his account and dump his shares. Neo’s account at Credit Suisse was managed by Cheng. In a bid to placate Neo, Cheng offered to “warehouse” some of the shares, and not because she was picking up the shares as Soh was out of “lines”.
Cheng ‘wanted attention’
The prosecution’s case was also that Cheng had been a nominee of Soh, helping him make trades and hold shares, to which Soh denied. An audio recording of a quarrel between Soh and Cheng was played in court, where Soh was heard explaining the deals he was trying to make.
Meanwhile, Cheng was heard talking about other things, with a distinctively different set of priorities.
“She just wanted to be the sole focus of my attention. She wanted time, she wanted attention, she wanted emotions, heart, soul and everything,” said Soh.
Sreenivasan then asked: “So when you were responding to Cheng Jo-Ee when Cheng Jo-Ee was throwing all these things at you one by one and you were giving your answers, what was your state of mind and what were you considering when you said all these things?”
Soh replied: “I just wanted to get out of that tiff. I just wanted peace. I would have told her anything to shut her up.”
Own account, own decisions
Another instance that Soh said he had not been privy to, were the positions due in the account of James Hong, who was Blumont’s former executive director.
Touching on a series of messages on Feb 8, 2013, Soh said Hong had been notified of the positions due in his accounts.
“James Hong did not forward any of these to me, did not tell me about any of these positions due,” Soh recalled. “He did his own action, it was his own account, he made his own decisions.”
In another instance, there was a message indicating that Hong had sold 300 lots of LionGold shares and bought 500 lots.
“He never told me any of this — no updates, no reports, no asking for advice even on this,” said Soh, in a bid to reinforce his position that Hong had been acting independently and not under his or Quah’s instructions.
He went on to note that Hong would have forwarded the messages to him, if Soh had really been controlling his account.
However, Soh added that he had not received even a single message of such nature from Hong.
“I have no insight into any of these things unless [Hong] chose to randomly solicit for some advice,” Soh said.
“James is very much his own man, he makes his own independent decisions, he communicates with his brokers directly and that also bears out whatever he asked me at random sampling is actually only asking for advice,” he added.
To illustrate this, Soh points at a message where Hong told his personal assistant that “his cash is in and to go ahead and prepare this amount for contra losses for Henry”.
Soh said he had not been informed of this, seeing as Hong had been using his own cash to deal directly with whatever came into his account.
Soh has been discharged as a witness. The trial will resume on June 28 with the defence’s expert witness David White taking the stand.
Separately, Quah is trying to contact one Tan Bong Loo, who was her relationship manager for her Goldman Sachs account, to testify.
