SINGAPORE (May 9): Woon Kok Yan, head of risk management of OCBC Securities, placed the blame squarely on trade representatives for failing to obtain formal third-party authorisation, when he took the stand in court on Day 13 of the penny stock manipulation trial of John Soh Chee Wen and Quah Su-Ling.

In his conditional statement, Woon cited the terms and conditions for account openings, as well as the SGX-ST rulebook, as rules for account holders to abide, including giving formal third-party authorisation.

Deputy public prosecutor Ng Jean Ting then asked Woon about the contents of OCBC Securities’ third-party authorisation form.

Woon said information required by the form included the third party’s name, address, NRIC number and the reason why the third party was being authorised.

OCBC Securities would then carry out bankruptcy, any delinquency in payment and anti-money laundering checks, he added.

According to Woon, an individual can only be authorised as a third party for up to three accounts. Limiting the number of accounts they can act for is to allay the concern of an underlying scheme and reduces the risk for OCBC Securities.

During cross-examination by the defence counsels, Woon kept repeating that “clauses were there to limit the risk for [OCBC Securities],” and that the “[trade representatives] would be in breach”.

When Soh’s defence counsel N. Sreenivasan asked Woon if any action had been taken by the Singapore Exchange against OCBC Securities or any of its traders for unauthorised third-party trading linked to the three penny stocks, Woon replied “No.”

It was later revealed that OCBC remisier Angelia Poon Mei Choo, who took the stand on Wednesday, has been suspended by OCBC Securities since March 28.

Sreenivasan also revealed that OCBC Securities accounted for 10% to 14% of trades involving Blumont, Asiasons (now known as Attilan Group) and LionGold (BAL) shares.

He also inquired about a trader code related to OCBC Securities, which transacted in large volumes of BAL shares. The prosecution later revealed that the code was related to trades done by institutional clients of OCBC Securities.

Quah’s defence counsel Philip Fong also grilled Woon on specific clauses in the terms and conditions of an account.

Referring to Clause 2C, Fong got Woon to agree that unless a trade representative informed the account holder that formal third-party authorisation was required, the account holder would not know.

Under re-examination by Ng, Woon was asked how an account holder could communicate his instructions through a third party, under Clause 2C.

Woon said the account holder needed to fill in a third-party authorisation form, retracting from his earlier answer where he agreed with Fong that this was not stated under Clause 2C.

When asked if the trade representative could waive the requirement of the form, Woon said the form was necessary.

“[OCBC Securities] would not know if the [trade representative] does not submit the form,” says Woon.

The trial resumes on Friday, when a trade representative from Lim & Tan Securities will take the stand.


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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