SINGAPORE (May 10): A witness in the trial of the alleged masterminds behind the 2013 penny stock crash has denied knowledge of manipulation in trading accounts linked to the scandal.

Esther Seet, executive director of Lim & Tan Securities, told Justice Hoo Sheau Peng that her brokerage firm would have taken action immediately had they known about it.

“They would proceed to close the account and report it to the authorities,” she said.

During examination-in-chief by deputy public prosecutor Randeep Singh, Seet added that there was no way the brokerage firm could have known at the time that the remisier in charge of those accounts, Andy Lee Chee Wee, was taking trading instructions from unauthorised third parties.

In particular, these unauthorised third parties referred to Quah Su-Ling, the former CEO of IPCO International who is on trial for her alleged role as co-conspirator behind the penny stock crash, and Alice Ang Cheau Hoon, a remisier at UOB Kay Hian.

Lee, the prosecution’s third witness, had on May 6 testified that he made up stories to conceal Quah’s and Ang’s roles in the crash because he did not want to testify in court. Lee said he was afraid details of his involvement would be revealed as well. However, he admitted that he had taken instructions from Quah and Ang.

See: John Soh gave presentation on 'mothership' Blumont at LionGold's offices, says prosecution witness Andy Lee

Quah and John Soh Chee Wen, with whom she is alleged to have been in a relationship, are accused of the manipulation of three stocks – Blumont Group, Asiasons (now known as Attilan Group) and LionGold Corp – back in 2013, leading to the crash. Soh, who is believed to be the mastermind behind the crash, faces 189 charges of stock manipulation, cheating and witness tampering and has been on remand since November 2016. Quah faces 178 charges of stock manipulation and cheating.

During cross-examination by Soh’s lawyer, senior counsel N Sreenivasan, Seet said that letters of mandate, which would authorise a third-party to trade on behalf of the account owner, are rarely approved by Lim & Tan.

“We allow only very limited mandates, and usually for close family members like husband and wife, father or son. It is only for close family relationships, and with very good reason,” she said. She also agreed that Lee would have known about the strict regulations regarding third-party involvement.

When Sreenivasan put to her that what Lee did would have been absolutely prohibited and in breach of regulations, Seet agreed. Earlier, she had explained that Lim & Tan had two procedures in place – Know Your Client (KYC) and Client Due Diligence (CDD) – to ensure the account holder is a “bona fide person” and not fictitious.

“The funny thing is, it [the breach] happened and it did not have anything to do with my client [Soh]. Do you agree that at some point, the KYC and CDD system did not work?” said Sreenivasan.

“In that broad sense, yes, but let me explain. When a client comes to open an account, the client confirms he is beneficial and account owner, and our backroom has no cause to question otherwise. So Andy (Lee’s) statement came as a shock to us,” Seet said.

The court had a light-hearted moment when Seet was asked if she knew how to identify signs of market manipulation, to which she replied that she had not seen it directly, but knew of the signs indirectly through guidelines issued by the Singapore Exchange (SGX).

“Could you tell us which guidelines?” asked Sreenivasan.

“I think SGX Practise Notes 13,” said Seet.

Upon checking, and confirming that it was the correct guidelines, Sreenivasan jokingly said: “I am very impressed, Ms Seet.” To this, Seet quipped: “So am I”, to laughter from the court. 

The trial will resume May 13.

2013 Penny Stock Crash

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.

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