SINGAPORE (Jan 7): Prosecution witness Ken Tai Chee Ming on Tuesday denied making unauthorised trades when alleged 2013 penny stock crash masterminds John Soh Chee Wen and Quah Su-Ling were away in order to rake in more commissions for himself.

Under cross-examination by Soh’s defence counsel, senior counsel N Sreenivasan of K&L Straits Law, Tai flatly dismissed the allegations.

“If I am churning, if I’m creating, I will admit to that,” Tai said.

Tai, a former broker, is said to be part of Soh’s “inner circle” of brokers and remisiers that played a role in the massive rise of shares in Blumont Group, LionGold Corp and Asiasons Capital (now Attilan Group) back in 2013.

When the shares unexpectedly collapsed in October that year, some $8 billion in market value was wiped out.

Drawing reference to trades made on July 10, 2013, Sreenivasan put forth that Tai had used the Saxo and Interactive Brokers (IB) accounts under his purview to push down the price of Asiasons shares.

Tai admitted that he had done so, but claimed that this was on the instructions of John Soh, to push out the share price and “shake out” an investor called Sunmax, which was managed by Tony Li Hua.

Li had gained control of the block of Asiasons shares after Soh and “his group of people” – including Quah and Neo Kim Hock – had lost a lawsuit with Sunmax.

According to Tai, Soh had instructed him to push down the share price so that Li or Sunmax would sell the shares back to Soh’s accounts.

Tai said he then asked for permission from Soh to purchase some Asiasons shares for himself.

“Normally for Soh, he has no problem for us to buy into these share counters,” Tai explained. “It’s all right for him, for us to buy, because we are not buying huge quantity.”

After receiving permission, Tai purchased 80,000 shares at $2.65 each.

Tai claimed that the share price then moved – unexpectedly – to $2.80. He explained that this was why he traded on an intra-day basis, rather than hold on to the shares.

However, pointing to trades done on the next day, on July 11, 2013, Sreenivasan put to Tai that he was in fact trading in order to push the price up.

“You see, I’m very, very confused, Mr Ken Tai,” exclaimed Sreenivasan. “On July 10, you all wanted to shake up the market, punish Li, [and] drive the price down. According to you, that is the story you told the DPP and you told us in court. [But] the very next day, you were doing ‘algo trading’ to push the price up.”

“Tony Li would be laughing all the way to the bank,” Sreenivasan added. “Your story doesn’t make sense. Please tell me, help me.”

Tai disagreed with Sreenivasan’s suggestion that he had been manipulating the accounts under his charge to make money for himself. “If you look at the percentage I was doing, it’s not a big percentage,” he said.

Instead, Tai explained that the share price could have “normalise[d]” to the original level because Soh’s accounts had collected quite a big block of shares from Li the day before.

Later, Sreenivasan also quizzed Tai on trades he had made on particular days when Soh and Quah were supposedly overseas.

“You were just churning. You were doing unauthorized trades to make commissions, right?” Sreenivasan probed.

Tai disagreed. He claimed that if he had been doing unauthorised trades, he would have just used the Saxo and IB accounts to trade with each other.

However, he pointed out that the trade data showed that other parties were also trading.

“If you look at my trades, there’s a large percentage [I am] not trading with myself as well. I mean, I know where you are heading, but I don’t think I will admit to that,” Tai said.

Sreenivasan later also asked Tai why he was using “algo trading” to automatically break up an order into smaller orders which would be released into the market over time.

To this, Tai said that he had been taught to “spread the activity out” so that the market was not very active at one point of time and totally stagnant at another.

Sreenivasan on Tuesday also said he intended to impeach Tai on the basis of material omissions.

The trial resumes on Wednesday.


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)