SINGAPORE (Jan 10): Prosecution witness Ken Tai Chee Ming has admitted to using omnibus accounts to prevent authorities from detecting his illegal “wash trading” activities.

Further, Tai revealed that he had engaged in this practice even though John Soh Chee Wen and Quah Su-Ling – the alleged masterminds behind the 2013 penny stock crash, whom Tai was supposedly taking instructions from – had specifically ordered him to avoid wash trades.

A wash trade involves a trade made by an account holder to sell and buy the same stock, thus manipulating the market by artificially creating a misleading illusion of activity in the market.

By using an omnibus account, which combines transactions of a group of accounts in the name of the brokerage firm instead of individual account holders, Tai confessed that he believed this would create an “additional layer” to avoid detection.

Under cross-examination by Quah’s defence counsel, Philip Fong of Eversheds Harry Elias, Tai agreed that Quah was worried about “hitting” their own accounts.

In his conditioned statement, Tai had also given examples of Soh and Quah telling him not to use certain accounts on certain days so as to avoid wash trades.

“It makes sense to avoid wash trades because wash trades would be an automatic red flag to the regulator,” Fong suggested. “And it would be easy to get caught if one undertakes wash trade.”

Tai agreed.

“You did it knowing full well this is precisely what Quah wants to avoid and something that she specifically instructed you not to do,” observed Fong.

Tai “partially” agreed with this suggestion. Later, he added that did not inform Quah about this since the trades were made under the omnibus account.

Drawing reference to trades made on Sept 11, 2012, Fong put forth that Tai had made a wash trade at his own initiative, and not under Quah’s instructions as he had previously claimed.

“You keep insisting that any instructions given to you [by Quah] on these wash trades were by [Blackberry messages or calls],” Fong said. The defence counsel then proceeded to show that there were no calls made between Quah and Tai during that period.

However, Tai disagreed. “It is a fact that they know I placed the order… [but] they don’t know which account I used to place the order,” Tai explained.

Fong called these assertions “a total fabrication”. “Your story about receiving messages [from Quah] through Blackberry messages is a total lie,” he added.

Again, Tai disagreed.

The trial will resume on Jan 14 with Fong continuing his cross-examination of Tai.


What the 2013 Penny Stock Crash trial is about

John Soh Chee Wen is the alleged mastermind behind the penny stock crash of 2013, which prosecutors have called “the most audacious, extensive and injurious market manipulation scheme ever in Singapore”.

Together with his alleged co-conspirator and girlfriend Quah Su-Ling, Soh and his associates are alleged to have been behind the massive rise and sudden collapse of shares in Blumont Group, LionGold Corp and Asiasons Capital (now Attilan Group), which wiped out some $8 billion in market value.

Subscribers can click here to read our 8-page special pullout on the penny stock crash trial.

Don’t miss out on these highlights in the penny stock saga so far:

Third tranche of witnesses (From Jan 2, 2020)

Second tranche of witnesses (Oct 1, 2019 to Oct 31, 2019)

First tranche of witnesses (March 11, 2019 to May 24, 2019)