Goh Jin Hian testifies in false trading trial, says he believed market-making services 'completely legal'

SINGAPORE: Former chief executive officer of investment holding company New Silkroutes Group (NSG) Dr Goh Jin Hian told the court on Tuesday (Sep 29) that he was unfamiliar with the market-making industry when the company engaged designated market maker GTC Group in 2018, but believed its services were "completely legal".

The 57-year-old son of former prime minister Goh Chok Tong also described how he was very sensitive to any wrong being done because of the reputations at stake, including his own.

Dr Goh took the stand in his false trading trial for the second day on Tuesday. He is accused of conspiring with other executives from NSG, a publicly traded company, to push up the share price as the company's business strategy was premised on a high share price.

He is contesting charges of conspiring to create a misleading appearance of NSG's share price, and of "doing things with the purpose of creating a misleading appearance of NSG's share price".

Dr Goh is on trial alongside NSG's former chief corporate officer, 55-year-old Kelvyn Oo Cheong Kwan. They are accused of engaging in the conspiracy, along with market maker Huang Yiwen and former NSG finance director William Teo Thiam Chuan, both of whom have been convicted and sentenced.

Dr Goh told the court that NSG was under "some pressure" to lift a months-long suspension on trading in its shares, which he believed were already thinly traded. Thinly traded securities are financial assets that are difficult to buy or sell without affecting their market price.

When he and NSG met Huang, the sole shareholder and director of GTC Group in February 2018, there was little time to engage a market maker before lifting the trading suspension. 

Market makers refer to financial firms or individuals who keep markets liquid by offering prices at which they will buy and sell an asset. Under SGX rules, designated market makers are required to provide competitive bid and offer quotations to provide for an adequately liquid market.

He also addressed the S$60,000 (US$46,900) monthly fee GTC charged, which he considered high but agreed to after consulting his team.

"I didn't know the market rate, I didn't know the industry at all," he said.

WHY NSG ENGAGED A MARKET MAKER

Dr Goh said he first met Huang in February 2018, in what was their only meeting.

Huang had been introduced to NSG through Teo, after Dr Goh asked the latter if he knew any market makers who could "support shares and prevent Shen killing the price" when the company's trading suspension was lifted.

This referred to NSG's former director and substantial shareholder Lee Soek Shen, whom Dr Goh believed was selling large volumes of his shares, exerting downward pressure on NSG's share price.

Dr Goh testified that he had learnt it was possible to engage a market maker to provide liquidity for NSG's shares and believed it to be "completely legal" to do so. 

During their meeting, Huang explained market making to Dr Goh and described GTC Group as a designated market maker on SGX. 

According to Dr Goh, Huang said his services could mitigate short-term volatility caused by Mr Lee's selling and, over time, allow NSG's shares to trade towards what Dr Goh considered their fair value.

NSG had requested a trading halt in November 2017, followed by a voluntary suspension of its shares in December while it negotiated acquisitions.

After nearly three months of suspension and just days after announcing three major deals, the company said in February 2018 that its shares would resume trading the following day.

Asked whether he or NSG had tried to meet with other market makers, Dr Goh said he did not know where to find them. 

There was also "some pressure" to lift the suspension, as they had completed some deals and had "very little time" to engage a market maker beforehand.

NSG eventually engaged GTC, which charged S$60,000 a month.

Dr Goh said his first reaction upon seeing that amount listed in the terms of agreement between the two was that it was three times his salary.

"I thought it was high in (that) regard. I didn't know the market rate, I didn't know the industry at all," he said.

He consulted his team, including Teo, on whether NSG could afford the fee and was assured that it could.

REPUTATION

The term "whiter than white" was brought up again in the trial, this time with the defence asking Dr Goh if he recalled the use of this phrase during the February 2018 meeting.

Dr Goh said he remembered the phrase being uttered by Oo to inform Huang that his conduct in providing market-making activities for NSG had to be completely legal and comply with rules by the Monetary Authority of Singapore and SGX.

Dr Goh said he agreed with the sentiment, saying: "I was very sensitive to anything wrong being done because of the reputation of the individuals on the board and even to my own reputation."

Without divulging his own background and corporate experience, he testified that most, if not all, the individuals on the board were people of good repute. Oo was a lawyer by training and was "not going to do anything illegal", Dr Goh said.

He told the court that the board members and he were mindful of their status and responsibilities to the company.

WHATSAPP MESSAGES

The defence delivered its opening statement on Monday, arguing that Dr Goh did not know many key details of what Teo arranged or agreed with Huang. 

Even Teo appeared not to know what Huang and GTC Group were doing, said his lawyers - Senior Counsel Tan Chee Meng, Mr Paul Loy, Mr Samuel Navindran and Ms Lee Jiayi from WongPartnership - in the statement.

They also sought to put several WhatsApp messages Dr Goh had sent to his management team in context, describing some of the exchanges as casual conversation "akin to banter".

In one, Dr Goh wrote: "looks like we can decide how much to price our shares today" and "maybe open at S$0.30?", accompanied by a smiling face with sunglasses emoji.

The defence said he was being "somewhat facetious", arguing that SGX rules would have made it impossible to move the share price in the manner suggested.

They noted that the seemingly questionable messages amounted to "loose and casual language", rather than reflective of any improper intent to manipulate the market, and that there was never any conspiracy between Dr Goh and  Huang.

"For the sake of argument, even taking the worst possible interpretation of Dr Goh's conduct, he would at the most have been reckless as to whether what he was doing might result in a false appearance being created,” said the lawyers.

"It was never his intention, nor his purpose, to do so."

The trial continues.

Teo was given 12 weeks' jail in September 2024, while Huang, who was involved in conspiracies to rig the market or price for share or unit counters, was sentenced to jail for over two years in August last year.

If convicted, Dr Goh and Oo face a jail term of up to seven years, a fine of up to S$250,000, or both for each charge.