SINGAPORE (Dec 20): Prosecutors in court on Tuesday confirmed links between ISR Capital and penny stock saga mastermind John Soh Chee Wen.
Authorities say they are investigating the company based on new evidence.
ISR Capital called for a trading halt after its share price crashed by more than 55% to 12.7 cents on Nov 24 – the day Soh was picked up by the Commercial Affairs Department (CAD).
Three days later, on Nov 27, ISR Capital was suspended by the Singapore Exchange (SGX).
In the course of investigating the crash in ISR Capital’s share price, investigators brought back “several witnesses” for questioning.
Deputy public prosecutor Teo Guan Siew say authorities found audio recordings between Soh and one Gabriel Gan, which were retrieved from a laptop belonging to the latter.
Soh’s defence lawyer, Tan Chee Meng of Wong Partnership, says the defence team needs more time to respond as prosecutors have put forward new allegations of witness tampering after the last hearing on Nov 25.
Soh is the alleged mastermind behind the penny stock crash involving Asiasons, LionGold and Blumont. He remains under remand.
Soh, together with his partner and co-mastermind Quah Su Ling, each face some 180 charges of manipulating shares. They alleged did so via dozens of brokerage accounts under others’ names.
In addition, Goh Hin Calm, interim CEO of IPCO International, faces six charges for assisting them.
In Oct 2013, some $8 billion in market value vapourised within days when prices of these shares crashed due to hitherto unexplained reasons.
Soh, who appeared in court today wearing a white round-neck T-shirt, will have his bail hearing adjourned to Dec 30.
ISR Capital is trying to acquire a 60% stake in a rare earth concession for $40 million. The same stake was sold for just 3.7 million euros ($5.6 million) last November.
Since the company proposed the acquisition, its share price has surged some 4,000% year-to-date, before collapsing by 55% on Nov 24.
ISR Capital, via its public relations representative, declined to comment.
The prosecutors’ comments today follows a Dec 9 announcement by ISR Capital.
In a SGX filing, ISR Capital had revealed that the Monetary Authority of Singapore (MAS) and CAD had launched investigations into ISR for a possible offence under the Securities and Futures Act.
On Dec 7, ISR Capital received a request from the authorities for a company organisation chart and details of all employees from Jan 1, 2015 to date.
They also asked for all relevant documents related to merger and acquisition agreements, including both draft and final versions, as well as minutes of board and management committee meetings, from Jan 1, 2015 to date.
In addition, the authorities asked for all corporate emails of employees and directors from Jan 1, 2016 to date.
On the same day the MAS-CAD joint notice was sent to the company, ISR’s newly-appointed executive chairman Chen Tong said: “I have full faith that the company practises the highest levels of corporate governance and ethics.”
Two of the company’s independent directors have recently quit within a week of each another.
The company’s board is now left with one independent director and three executive directors. Besides Chen, the other two executive directors are David Rigoll and CEO Quah Su Yin.
In a Dec 1 statement, Quah noted that the company has been linked to the October 2013 penny saga involving three companies: Blumont, LionGold and Asiasons.
She claimed that other than the fact that she is the sister of Quah Su Ling, who is facing charges together with Soh, neither ISR Capital nor its directors and officers had business dealings with the three companies involved.
“I also wish to state that in my capacity as executive director and chief executive officer (since April 29, 2011), I have not been involved in any criminal proceedings,” she added on Dec 1.
According to Soh’s charge sheets made available by the Attorney General Chambers, Soh allegedly made use of a trading account in the name of one Chan Sing En to manipulate shares.
Chan is listed on ISR Capital’s website as the CEO of a subsidiary, Dynamic Return (Singapore).