SINGAPORE (Jan 2): Returning to the stand for the third tranche of the trial of alleged 2013 penny stock crash masterminds John Soh Chee Wen and Quah Su-Ling, prosecution witness Ken Tai Chee Ming on Thursday again admitted to cheating the duo and making millions of dollars for himself.

Once part of Soh’s “inner circle” of brokers and remisiers, Tai had already admitted to manipulation of the stock market for his own gain in the second tranche of the trial in October last year.

However, Tai later claimed he only confessed to make Soh’s lawyer “happy” after a protracted and frustrating back-and-forth questioning.

Tai’s cross-examination has been put on hold until this third tranche so the defence counsels had time to go through some data.

In his cross-examination on Thursday, Soh’s defence counsel, N Sreenivasan of K&L Straits Law, put forth that Tai had lied at several instances.

“You are guilty of market manipulation, misappropriation and cheating your account holders,” Sreenivasan suggested.

Tai, who was a commissioned dealer at AmFraser Securities (now known as KGI Securities Singapore), paused for a while, before agreeing with Sreenivasan.

For instance, the court heard that shares handled by Soh and Quah had to be “rolled over” whenever there was insufficient cash or margin facilities needed for the volume of shares they wanted.

Tai elaborated that he had been instructed to utilise the credit limits of the accounts and to utilise the margin call by rolling the shares over in order to keep them. This would involve selling them on a T+5 basis, or five working days later.

He added Soh and Quah gave him the broad objectives for each share and left the execution to him.

Tai later admitted to having cheated Soh and Quah through this rolling over of shares.

While the practice, which commenced in January 2012, was initially “not to [his] benefit”, Tai admitted to carrying through with it to earn the interest income it generated.

“You have made millions out of your conduct,” noted Sreenivasan.

The court heard that Tai had earned some $3 million in commissions from trade volumes, interest on outstanding loans and proxies.

‘Alien’ trading

Sreenivasan also questioned Tai’s previous remark that Soh and Quah had “no problems with ‘aliens’ (third parties trading in the counters) entering the market for LionGold and Asiasons shares if they were on the buy side of the trade”.

Tai had said that the duo would benefit from an “alien” investor because they would be taking over a block of shares that would otherwise have to keep rolling and incurring commissions and possible contra losses.

“[Soh] and Quah were happy to have some genuine demand for LionGold and Asiasons shares, as long as the ‘aliens’ did not acquire a too sizeable shareholding in these companies, and as long as the ‘aliens’ held the shares for the long term and did not release them back into the market soon after,” noted Tai.

Tai added that Soh and Quah would spend less on commissions if they could outbid the “alien” such that the third party sells at a loss.

“It does not make sense,” Sreenivasan countered, noting Soh and Quah’s interest in locking up the shares. The defence counsel went on to add that Tai’s statement on this “fooled anyone who read it”.

“You have told so many lies that nobody is capable of discovering what truths come from you,” Sreenivasan later said.

Tai also earned a rebuke by the judge, after he was constantly responding to Sreenivasan's questioning in a seemingly flippant manner. At one point during the cross-examination, Justice Hoo Sheau Peng intervened and told Tai: “Can you please answer seriously?”

The trial resumes tomorrow with defence counsel Sreenivasan 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:

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

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