Duo involved in 2013 penny stock crash plead not guilty

Duo involved in 2013 penny stock crash plead not guilty

The two alleged masterminds behind Singapore’s 2013 penny stock crash pleaded not guilty in court on Monday (Mar 25).

SINGAPORE: The two alleged masterminds behind Singapore’s 2013 penny stock crash pleaded not guilty in court on Monday (Mar 25).

Malaysian businessman John Soh Chee Wen and Quah Su Ling, formerly CEO of Ipco International, have been accused of market rigging and false trading under the Securities and Futures Act.

They are facing more than 360 charges in total.

Goh Hin Calm, who was accused with the duo, pleaded guilty last week to helping them with the scheme and was sentenced to three years' jail.

READ: 'Mastermind' of 2013 penny stock crash charged for manipulating the stock market

READ: Finance manager in scheme that triggered S$8 billion penny stock crash in 2013 gets jail

“This is a prosecution for the most serious case of stock market manipulation in Singapore,” said Deputy Public Prosecutor Peter Koy in his opening statement, which lasted almost two hours.

Soh and Quah are accused of artificially inflating the values of shares for three companies on the Singapore Exchange: Blumont Group, Asiasons Capital (now known as Attilan Group) and LionGold Corp, which the court referred to collectively as BAL.

The 2013 crash wiped S$8 billion from the Singapore stock market.

The prosecution said Soh and Quah used their families, friends, business associates and companies to aid them in their scheme using a number of methods.

One of them involved wash trading, where the same people bought and sold shares using the accounts they controlled. The accused persons did not have to come up with money to pay for the shares, other than for the transaction costs.

The court heard that Soh and Quah would instruct brokers to trade BAL shares through controlled accounts. These brokers would then update them once the transaction was done.

Share prices rose as a result of the increase in traded shares.

Another method is by using shares as collateral to get financing from financial institutions. They face cheating charges in relation to this.

Shares were also used to buy assets, either directly or through cash.

The prosecution said that more financing meant more funds to manipulate the market with, making BAL shares more attractive as collateral.

This allowed Soh and Quah to create a vicious circle of deception, cheating, and market rigging, the prosecution added.

As a result, BAL share prices rocketed almost 550 per cent over 10 to 14 months. However, it plummeted by 82 to 94 per cent in just two days in October 2013.

Source: CNA/ga

Bookmark