John Soh – the alleged mastermind of the 2013 penny stock saga – is of the view that the prosecution has been deceived by the trading representatives who have been called to the stand as witnesses.
“A lot of things they have been saying have been total lies, in order to protect their licenses,” he told the court during his examination-in-chief by his defence counsel N Sreenivasan of K&L Gates Straits Law on May 17.
Soh went on to say that he was happy to speak to the high net worth clients that the trading representatives wanted to introduce to him.
His objective was to ‘promote’ and not engage in ‘market manipulation’ of LionGold’s shares.
SEE:Manipulations, betrayals and sweet talk: the case so far against John Soh and Quah after 169 days
“It is not about saying buy LionGold or buy LionGold today,” he said adding that he had looked to create believe in the sector by discussing why they should consider gold, Singapore and LionGold instead of CNMC.
CNMC is another SGX-listed gold company that is viewed as a competitor of LionGold.
In this time, his interactions were made mostly face to face or over the phone.
“I’m old school…I feel there is a lot of misunderstanding [that can happen over text messages] because people read messages based on the mood they are in,” he elaborated.
Soh and his co-accused Quah Su-Ling allegedly orchestrated Singapore’s largest share manipulation scheme between 2012 and 2013 involving three penny stocks: Blumont Group, Asiasons Capital (now Attilan Group) and LionGold.
The eventual collapse of these counters – collectively referred to as BAL – in October 2013, had wiped out some $8 billion in market value.
Centre of influence
Soh went on to touch on the prosecution’s case that trades were made based on instructions given by him.
“It is very clear, very simple,” he started.
“I am, for want of a better word, seen as a centre of influence, an opinion leader. People do take what I say into consideration. Whether they take it in, I don’t know”.
In the words of Soh, he is an “unabashed promoter of LionGold”, and he makes no bones about that.
Even so, he “always veered from giving instructions,” he told the court. This is because many people had pointed fingers at him for causing them to incur losses in the 1990s, during the Asian Financial Crisis that saw a downturn in the global economy and stock market.
Soh replied with “no” when pressed by Sreenivasan on whether he had given the trading representatives any instructions on the accounts.
“No way,” he stressed when asked if he was controlling the accounts.
“Every trading representative goes out there to say John Soh gave me clear instructions [but there were] many clear days when no communication and trades happened,” he said.
For instance, he said there may have been several messages that people like Gabriel Gan would have sent. Soh may reply to a few messages, but may also not have responded for days.
A former remisier with DMG Securities, Gan had succumbed to bankruptcy on August 18 2016. He was part of the core group of remisiers who took trading instructions from Soh and Quah.
Soh went on to say that many of the witnesses had told the court that they “[didn’t] know what they were doing”.
But as it turns out, they were making millions, he said.
The trading representatives’ recounts are “practical impossibilities” and “the pillars that they pin their stories on have no legs”.
Soh told the court that he had been open and transparent in his dealings with the trading representatives.
Throughout his interaction with them, he noted that he had not been asked to sign any third party authorisation forms.
“In the first place, it is not relevant to me because I am not giving instructions,” he quipped.
When quizzed by Sreenivasan on why many of the remisiers had wanted to hang out with him, he responded that there were “many reasons”. These included wanted to “get intel and bringing deals to me”. Many of these deals were related to mining.
Sreenivasan’s examination of Soh touched on his interaction with Henry Tjoa and Ken Tai, both of whom were supposedly among his inner circle of traders.
Soh recalled having met Tjoa through Tai sometime in early 2012.
At that time, he was looking to draw the “heavy weight trading representative into his ecology” and found Tjoa to be a good fit based on his “solid work ethic”. This, Tjoa had demonstrated, by setting up kiosks over the weekend, said Soh.
Soh went on to refer Malaysians looking to open trading accounts, to Tjoa.
When asked if Tjoa had given him daily reports either before or at the end of the trading day, Soh said no.
“The prosecution’s case is that we were always shorting accounts, but there were so many days when no trades were made,” he stressed. The we he was referring to was himself and Quah.
“If I were CAD I would be flabbergasted on the information he gave that Su Ling gave instructions, but Tjoa later changed it to saying [that the instructions were from Ken Tai,” Soh exclaimed.
“Why didn’t they come and say it was Ken Tai who gave the instructions, why is Ken Tai still trying to conceal it till now?,” he added.
Soh noted that he could not have given Tai instructions even if he had wanted to, since he did not receive trading reports.
“There was no knowledge,” he responded when asked why he had not pointed this out to the Criminal Affairs Division (CAD).
“Now with the benefit of all the data, we have seen all of this. It's only with this overview that we can see all of this. It is definitely jarring to say the least,’ he added.
Thinking back, Soh recalls Tai to have been a hardworking guy who was looking for a break as a remisier.
“He was enthusiastically talking about algorithms of his trade,” said Soh, adding he thought it made sense because it seemed to be aligned with the direction of trading.
To add to this, Tai was also offering considerable savings through commission rates that were around 30% to 50% cheaper than what was typically offered by broking houses.
Drawing reference to a series of trades, Soh noted that Tai had been cheating him and Quah in four ways: conducting authorised trades, having schemes for himself and Dick Gwee (another member of the inner circle), market manipulation and by colluding with Tjoa.
“On top of being frauded by him, conned by him, his unauthorised trade is under my account,” exclaimed Soh.
Sreenivasan went on to ask Soh why he was taking umbrage at this.
Soh responded that both he and Quah had no idea of the scale and the audacity of the things that were being done.
The trial will resume on May 18 with Sreenivasan continuing his examination-in-chief of Soh.