SINGAPORE (Apr 29): John Soh Chee Wen had given a presentation on the future business plans for Blumont Group at the offices of LionGold, according to ex-remisier Andy Lee Chee Wee.

Lee was the third prosecution witness to take the stand on Monday when the trial of Soh resumed. Soh and co-defendent Quah Su-Ling stand accused of rigging the share prices of the three counters back in 2013, resulting in a crash that wiped off some $8 billion from the Singapore market.

According to Lee’s statement, Soh had painted a very positive future for the company, claiming that Blumont would be the next “Rio Tinto” and that the share price of the mining company would hit $5. Soh also said that Blumont would be the “mothership” while Asiasons Capital (now known as Attilan) and LionGold Corp would be “subsets”.

Lee said it was Quah who invited him to the presentation although she did not tell him what it was about. It was during the presentation that Soh and Soh’s son were introduced to him.

Lee was a remisier with Lim & Tan Securities from 2000 to Feb 2014. As Lee was liable for the trading losses of his clients, he was forced to leave the brokerage due to the losses of over $1.8 million incurred by accounts under him following the penny stock crash.

In his conditioned statement, Lee outlined how trading accounts belonging to a Malaysian syndicate that were under the care of former trader Thomas Chng were transferred to him as the latter was leaving the brokerage.

Lee also identified UOB Kay Hian trader Alice Ang as the one who gave instructions on trade orders for these accounts.

Ang was also the one who introduced Lee to Quah in a meeting where the latter was introduced as the CEO of IPCO International. That meeting was to hand over the control of the accounts to Quah from Ang and to confirm which accounts these were.

After handling Quah’s instructions for the accounts, Lee felt that her practice of rolling over trades on contra did not make sense as there was little profit, if any, to be made from the trades. He also found this practice risky as Quah was doing this in only a few accounts, which could have been red flagged for possible market manipulation by the authorities later.

Lee’s commissions rose to about $150,000 a year from $60,000 a year after he took Quah’s instructions. But Lee had the impression that Quah was controlling buying and selling of the Blumont, Asiasons and LionGold counters, as the orders placed were frequently fulfilled quickly.

According to his own statement, Lee subsequently decided to tell the truth after he was told he would be appearing in court.

When questioned by deputy public prosecutor Randeep Singh on whether anyone else besides Ang gave him trade instructions, Lee revealed that a person named Kent, whom he understood to be Ang's runner, also gave trade instructions.

He was referring to Kent Kher who was earlier identified by former trader, Jack Ng Kit Kiat, as part of Ang’s team in UOB Kay Hian.

N Sreenivasan, Soh’s defense counsel from K&L Gates Straits Law, questioned Lee about the investigating officers (IO) who took his fifth statement and whether IO Clarence Chew was present. The prosecution interjected, saying the IO who took Lee’s statement was present in the court, and had to be asked to leave the courtroom.

Lee was also grilled by Sreenivasan on why he had first lied to the Commercial Affairs Department about his knowledge of Soh's identity. Lee’s initial statement said that he was unaware of who Soh or Quah was. He later admitted he had lied due to the stress from dealing with the outstanding losses in the accounts.

While Soh never gave any instructions or settled any outstanding amounts, Lee had the impression that Soh was the big boss behind this scheme.

“I was trying to distance myself from this incident. I was afraid if I identified Soh I would get implicated,” says Lee.

Sreenivasan also asked Lee why he had concocted a story about how Ang and Quah were merely “secretaries” relaying instructions for the Malaysia syndicate.

Lee said it as a way to hide their identities and protect himself.

“The story has to have a flow and link, and this was the best way I could give them this identity in my statement [to CAD],” says Lee.

Sreenivasan also asked Lee why did not mention wash trades in his statement to CAD. Lee appeared unfamiliar with the term, and said that he merely offered his views of what he thought about the frequency of execution of Quah’s trades.

Before Lee took the stand, Day 8 of the trial started with the continuation of the cross-examination of witness ex-RHB Securities remisier Alex Chew Keng Chiou.

Quah’s defense counsel Philip Fong tried to get Chew to admit to layering, a market manipulation technique where orders are placed but not executed to influence a share price.

Fong asked Chew if he knew who had controlled an account which had placed buy and sell orders which were a few ticks off the market price and subsequently deleted.

Chew insisted he did not know who the owner of the account was, even when Fong put it to him it was an account controlled by Ken Tai Chee Ming or a family member of the latter. As for why the orders were off the market price, Chew said it was likely to get the best price for the client.

The trial resumes at 10am on May 6.


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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