Market maker hired by New Silkroutes Group was trading for himself, charges ex-CEO Goh Jin Hian's lawyer

SINGAPORE: The lead lawyer for former New Silkroutes Group (NSG) chief executive officer Goh Jin Hian on Wednesday (Feb 11) charged that a market maker hired by the group had been trading for himself instead.

The market maker, Huang Yiwen, who was been convicted of market rigging and is to serve a jail term of more than two years next month, is testifying for the prosecution in the false trading trial of Dr Goh and former chief corporate officer of NSG, 55-year-old Kelvyn Oo Cheong Kwan.

Dr Goh, the 57-year-old son of former prime minister Goh Chok Tong, is contesting charges of conspiring with Oo, Huang and former NSG finance director William Teo Thiam Chuan to create a misleading appearance of NSG's share price.

The prosecution's case is that Dr Goh and Oo conspired to push up the share price as the company's business strategy was premised on a high share price.

Members of the group allegedly placed orders and executed trades for NSG shares over 31 dates between February 2018 and August 2018.

Huang had previously testified about how he was the sole shareholder and director of designated market maker GTC Group.

His role was to provide liquidity in the market by continuously providing both bid and ask quotes for securities and earning a profit from the bid-ask spread. However, he was not allowed as a market maker to conduct false trading.

Huang was engaged by NSG for market-making services through Teo. Huang testified that NSG wanted a higher share price which would make it easier to carry out further corporate actions such as the acquisition of medical clinics.

DEFENCE CROSSES HUANG

However, on Thursday, Dr Goh's lead lawyer, Senior Counsel Tan Chee Meng, charged that Huang was really trading for himself.

He showed charts of trading volumes on days in 2018 and suggested to Huang that the effect of his "massive trading" in a certain period actually resulted in the share price being depressed.

He also showed text messages exchanged between Huang and Teo, where Teo asked about the results of Huang's trades.

In one message, Huang told Teo that he had picked up 800,000 shares. However, Mr Tan showed a table and said the total number of buys for that period was about 681,000 while the total number of sells was about 444,000.

"Effectively it's not true to say you picked up 800,000 since then, would that be correct, looking at the trade data?" asked Mr Tan.

Huang said he could not really say for sure because some of the shares could have been bought even earlier than that period in question.

Mr Tan pressed his assertion that the figure of 800,000 was a "misleading estimate", but Huang did not agree.

Mr Tan further pressed Huang on why he had told Teo that he bought 800,000 shares without telling him that he had also sold about 400,000 shares, which would have the effect of lowering the share price.

"You were not being upfront," said Mr Tan.

"I was being upfront that there was a lot of selling pressure," said Huang. "And I actually picked up a lot more than I wanted to. Close to 800,000."

In another series of messages, Teo asked Huang how many shares he picked up.

Huang said he did not reply to this message. Mr Tan said the answer would not be something Huang thought Teo would like to hear.

In response, Huang said it was quite normal for him to be trading in that amount of shares.

Mr Tan showed Huang more data and said that Huang had actually brought the share price down from 29 cents to 27.5 cents.

"So again, it wasn't, it didn't have anything to do with raising the share price," said Mr Tan.

"You were trading for your own benefit, am I correct? To make money," he said.

Huang reacted, saying: "It's losing money. The share price is dropping. Why am I making money?"

Mr Tan again alleged that what Huang was doing was trading for himself.

Huang said he was not sure if Mr Tan's tabulations were correct.

After Mr Tan completed his cross-examination, Senior Counsel Jason Chan, lead lawyer for Oo, began questioning Huang.

He said that Oo's position was that he had only ever interacted with Huang once, during a meeting sometime in February 2018.

Huang agreed that he had met Oo then, but was not sure if he met him again.

He also agreed with Mr Chan that he never interacted with Oo again whether by text or phone call after that meeting.

At this meeting, Mr Chan said Huang told the NSG executives that he was a designated market maker and therefore regulated by the Singapore Exchange.

"WHITER THAN WHITE"

"Do you remember, yesterday Mr Tan questioned you about this meeting and reminded you that at this meeting, you were in fact told that whatever is done as a market maker must be 'whiter than white'?" asked Mr Chan.

"Mr Oo's position is that it was in fact Mr Oo who said this to you during the meeting. Do you remember it was him?"

Huang said he did not remember.

Mr Chan put it to Huang that he was wrong to say that there was a discussion about a target price for the NSG shares at this meeting.

Huang disagreed.

"You were never instructed by Dr Goh and Mr Oo to push up NSG's share price," said Mr Chan. He said this was not stated in the statement of facts agreed to by Huang when he pleaded guilty.

"At its highest, you agreed to plead guilty to a statement of facts that says you were given a target price of 50 cents," said Mr Chan.

"At the same time, your own mitigation says that (during) your engagement, there was no discussion about the target price, and therefore I am putting it to you that at the NSG meeting that you had with William, Dr Goh and Mr Oo, there was no discussion about a target price," said Mr Chan.

Huang said he did not know.

"In fact, in court, you said it was a range of 40 to 50 cents," continued Mr Chan. "Mr Oo's case is that he has never given any target price to achieve."

The trial continues.

If convicted, the men face a jail term of up to seven years, a fine of up to S$250,000, or both for each charge.

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