SINGAPORE (Jan 17): Prosecution witness Ken Tai Chee Ming on Friday admitted that he had raked in thousands of dollars’ worth of commissions in a single day from the trading of shares in LionGold Corp.

This revelation comes despite Tai having repeatedly denied during the trial that he had made unauthorised trades to rake in more commissions for himself.

Tai was once part of the “inner circle” of brokers and remisiers used by John Soh Chee Wen and Quah Su-Ling to allegedly manipulate shares in LionGold, Blumont Group and Asiasons Capital (now Attilan Group).

This had led to the penny stock crash of October 2013, which wiped out some $8 billion in market value.

Under cross-examination by Quah’s defence counsel, Philip Fong of Eversheds Harry Elias, Tai was called out on a number of transactions that had occurred from March to April 2012.

There were several days over this period when Tai was found to have been responsible for some 80% of the total traded volume for the LionGold counter.

In one particular occasion, on Mar 28, 2012, Tai was found to have traded 25 million LionGold shares via the Interactive Brokers (IB) and Saxo accounts under his control.

On this day alone, Tai had pocketed a whopping $8587.50 worth of commissions, the court heard.

In another example, Fong highlighted that there were 13.42 million shares traded on Tai’s IB and Saxo accounts on March 27, 2012. Some 10.8 million of these shares traded, he added, “need[ed] to be explained”.

“Your own cross trades accounted for almost 80% of your total traded volume on this day,” said Fong.

Tai agreed with this figure. However, he insisted that these were not “churning trades” done for his own personal benefit.

Fong also questioned Tai about an incident on Sept 11, 2012, where he had sold 100,000 LionGold shares from an account belonging to Tan Boon Kiat to Lau Siew Loon’s account.

About 40 minutes later, Tai had then used Tan’s account to buy 150,000 shares from Avalon Ventures’ account.

Fong argued that Tai could have used Lau’s account to buy directly from Avalon’s account. This “extra step” on Tai’s part, Fong suggested, was so Tai could earn commissions for himself.

Tai disagreed, and explained that when Soh or Quah called or placed orders, he would just key in the orders using the list of accounts he had.

He added that was not “up to [him]” whether to use an extra step or not.

Tai emphasised that operators like Soh and Quah, who he claims were operating LionGold at the time, would need to know who is in the queue and carry out “queue-counting”.

“That’s why I say Su-Ling would know who am I going to take from, and who are in the queue,” Tai said.

Fong noted that in November that year, Tai had bought his wife a Patek Philippe watch worth some $20,000.

Further, the defence counsel highlighted that this was an amount that Tai could not have afforded just a year ago in 2011, when he was working at ITE Electric with a monthly salary of $2,000.

“By November 2012, your living standards had improved tremendously because of the trading activity conducted on the IB and Saxo accounts,” said Fong.

Tai agreed. However, he denied that this was because he had performed wash trades to churn commissions during this period.

‘Fabricating stories’

Pressing on, Fong again attempted to expose certain discrepancies and inconsistencies within Tai’s statements.

Following a close examination of the trades conducted, Fong proposed that Tai had fabricated a “story of being a market operator” for LionGold in order to manipulate its shares continually throughout the period from 2012 to 2013.

“You have chosen this period from [late March to early April 2012] to make this claim to limit your own culpability as the manipulator of LionGold shares throughout the period from 2012 to 2013,” Fong suggested.

“You were churning trades for your own personal benefit, and there was never any so-called ‘market operator’ period. You came up with this story to justify the lack of phone calls between you and Quah,” he added.

Tai disagreed with this.

For instance, Fong pointed out that Tai had placed 10 orders of LionGold shares on July 30, 2013. However, a search of Tai’s phone records revealed that, on that day, Quah had not called Tai on either her Singapore or Malaysia phone numbers.

In response, Tai suggested that Quah could have used Blackberry Messenger (BBM) to communicate the order instead.

“We know that’s your fallback position,” said Fong. “But there were no calls to give you instructions on that day.”

Fong pointed out that on another occasion, on Aug 3, 2012, there had only been two calls from Quah to Tai throughout the day.

Fong noted that there was only one call falling within a five-minute window before an entry in the accounts under Tai’s charge in relation to LionGold.

As such, Fong said, Quah could not have instructed 71 out of the 72 orders or deletes placed that day.

Tai disagreed. He explained that the orders had been carried out as two “algo” orders, meaning orders that were broken up and placed automatically using an algorithm.

Tai added that based on the data shown in court, he believed Quah had given an instruction to him via BBM to place the first order, and that he had called her to report the trades for the first order being done.

Looking at the record of the call, Tai said: “It’s a outgoing call, it’s very obvious that I call her to report trade, it’s only 11 second.” He added that he had nothing much to discuss other than to report trades.

Tai in court on Friday also claimed that some 3 million shares were traded on his account on April 4, 1012, without his knowledge.

“When I went home to look at my terminal yesterday, I realised that I only account for 14 million shares of the 17 million that were traded,” said Tai.

“You keep adding information [to your statement],” said Fong. “Now you are adding this additional thing that you had control taken away from you. You’re fabricating evidence as you are going along when you are confronted with evidence.”

‘Base of operations’

Fong also cross-examined Mr Tai about his evidence that he had been trading from Quah Su-Ling’s home at Angklong Lane for about a week around October 2012, leading up to a force-selling episode by Interactive Brokers

Fong suggested to Tai that, contrary to his statement, he had only had some meetings with Soh and Quah at the house, and that this was not the “base of operations”.

He added that, at the time, the house was Quah’s matrimonial property, and that her maid was still in the house during this period.

As such, Fong argued that Tai could not have been working from that residence.

However, Tai disagreed, and maintained that he had been trading from the house, especially during the force-selling episode.

The trial resumes on Feb 17 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)