SINGAPORE (Jan 16): Prosecution witness Ken Tai Chee Ming has again denied making unauthorised trades as a market operator for shares in LionGold Corp in order to churn commission for himself.

The former broker 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).

The massive rise and sudden collapse of the shares in October 2013 had wiped out some $8 billion in market value.

Under cross-examination on Jan 16 by Quah’s defence counsel, Philip Fong of Eversheds Harry Elias, Tai insisted that as the operator, he had to “take care of my boss’s pocket, which is John”.

Fong attempted to pin down inconsistencies in Tai’s statement, including on whether Tai had performed trades that were not instructed by Soh or Quah.

“You were just taking advantage of the fact that you were in control of the accounts, to buy and sell LionGold shares at your own discretion, to generate commissions to benefit yourself,” Fong suggested.

Tai disagreed.

Earlier, Tai had agreed that as market operator for LionGold, his “only job” was to coordinate the rollover of LionGold shares with Henry Tjoa – a fellow broker who was also part of the alleged masterminds’ inner circle.

However, Fong cross-examined Tai on why, on certain days, he had left queues in the system even after his last trade with Tjoa.

Tai explained that it did not make sense for him to remove the buy and sell queues as it would cause the counter to look “illiquid” without any buyers or sellers.

“If after I finish with Henry, all the roll, I take out everything, what will the queue look like? It looks like – I mean, we call it ‘haunted counters’,” Tai protested. “Meaning that it's blank. You cannot have a blank queue for buy and sell side.”

In Chinese, Tai added, they would call it "long men ke zhan" or Dragon Gate Inn – a reference to a dilapidated guesthouse in a popular 1967 wuxia film with the same name.

Fong also pointed out that if Tai was really involved in rollover operations with only Tjoa, then his total trading volume for each period cannot be more than twice of Tjoa’s.

The defence counsel then put forth several instances in which trades under Tai’s accounts were in excess of the amount needed for his market roll with Tjoa. In one instance, there were over 30 million shares traded by Tai, when he had only rolled over 758,000 shares with Tjoa.

He suggested that Tai was “churning” the shares to make commission for himself.

However, Tai flatly dismissed this allegation, and pointed out “a flaw in [Fong’s] assumptions”.

Among other things, Tai highlighted that even though he was the operator during the period, another trader named Leroy Lau was interfering with the rollover operations.

Tai explained that he had to move the price up and down in order to cause Lau to buy at a higher price or sell at a lower price.

As Lau’s positions were “quite substantial”, Tai added that Lau would “rightfully take” hundreds of thousands of dollars from Soh’s pocket.

“As the operator myself, I have to defend that pot as well,” Tai said.

Hearings for Tuesday and Wednesday this week had been cancelled as Soh had taken ill. The trial resumes on Friday 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)