SINGAPORE (Nov 25): Three key figures involved in the penny stock saga of October 2013 are expected be charged on Friday afternoon at the State Courts.

They are John Soh Chee Wen, who has earlier been described by prosecutors as the mastermind behind the whole affair, as well as Quah Su-Ling and Goh Hin Calm, respectively the former CEO and interim CEO of IPCO International.

The three were reportedly arrested on Thursday morning by the Commercial Affairs Department (CAD).

The Oct 2013 penny stock crash vaporised some $8 billion in market value in three companies: LionGold Corp, Blumont Group and Asiasons Capital, which has since been renamed as Attilan Group.

Before their stock tanked, prices in the three companies’ shares surged 800% over a period of just nine months.

Market observers have suggested that Soh, a Malaysian, was behind the stocks’ spectacular rise.

Soh does not directly appear as a shareholder or director of any of the companies involved in the investigations.

He did, however, carry LionGold business cards that described him as “Adviser to Chairman”.

He also has personal links to some individuals who were directly involved with the companies.

Investigators engaged by The Edge Singapore have determined that Soh lives with Quah.

Soh has also been identified in documents from separate court cases, in which he has been described as an influential dealmaker who owns large amounts of shares in the affected stocks, through nominees.

Directors and key officials from six other companies are also linked to the three stocks.

These companies are ITE Electric, IPCO International, Annica Holdings, Magnus Energy, Innopac Holdings and ISR Capital.

Goh was the senior finance and administration manager of IPCO International before taking over the interim CEO job. He used to hold directorships at listed companies including ITE Electric, Annica Holdings and Asiasons Capital.

ISR Capital, one of the companies linked to this web, suffered a 55% crash within two hours on Nov 24. From 28 cents, it dropped to 12.7 cents before the company called for a trading halt, pending its response to queries by the Singapore Exchange.

Prior to the crash on Nov 24, ISR shares had gained some 4,000% year-to-date.

ISR Capital CEO Quah Su-Yin is the sister of Quah Su-Ling, one of the three to be charged this afternoon.

The company has been trying to transform itself from a fund manager into a rare-earth miner. It plans to acquire a 60% stake in a rare earth concession in Madagascar for $40 million by issuing shares at 10 cents each. The same stake changed hands last November for just 3.7 million euros.

SGX is questioning the soundness of two valuation reports commissioned by the company. Both reports value the concession at more than US$1 billion.

The growing attention on this stock has caused many brokers to place trading restrictions on the counter. The latest to do so was KGI Securities.

Three years on, there has yet to be a conclusive cause of the 2013 penny stock crash.

However, some observers have linked it to the force-selling of shares by Goldman Sachs, which the investment bank had been holding as collateral for loans to Quah.

The saga has been blamed for the continuing weak investor sentiment; trading volumes on the Singapore Exchange have been at the lowest in years.

Soh is represented by Tan Chee Meng of WongPartnership; Quah is represented by Philip Fong of Harry Elias Partnership; and Goh is represented by Nicholas & Tan Partnership.