A decade ago, in 2013, an elaborate stock market manipulation scheme wiped out $8 billion in market value.
The mastermind? Malaysian businessman John Soh Chee Wen.
After almost 200 days of court hearings in the span of four years, the trial has finally mounted to the saga’s conclusion today.
Soh has been sentenced to 36 years in jail.
Here’s what happened.
Who is John Soh Chee Wen?
Back in the day, Soh was a prominent Malaysian businessman.
He claimed to have dropped out of university after three days and made his first million dollars by the age of 22 through his multi-level marketing business selling T-shirts and shampoo.
He and his co-conspirator Quah Su-Ling were the former CEOs of Singapore Exchange (SGX)-listed IPCO International.
Quah was previously Soh’s girlfriend.
Between 1 August 2012 and 3 October 2013, the duo manipulated the share prices of Blumont Group, Asiasons and LionGold – collectively known as BAL.
They were assisted by Goh Hin Calm, the then-senior finance and administrative manager at IPCO.
The Scheme
In 2012, the pair used contra trading in 187 accounts which belonged to 58 individuals and corporate nominees to manipulate the market.
Allegedly, these individuals included those related to them, such as family, friends and fellow associates.
Contra trading involves the trading of listed securities on unsecured credit by investors.
Notably, the trades between these accounts generated artificial liquidity and demand for these shares, which caused the share prices to increase over time.
Furthermore, trading in such a manner allowed them to retain control of large amounts of shares without alerting the rest of the market.
Over time, the price of the shares embarked on an upward trend, growing the market strength of BAL, which allowed profits to be reaped without sustaining contra losses.
In September 2013, many news reports on BAL started to come out, prompting Soh to tout the prospects of BAL by trying to persuade the brokers at LionGold to buy BAL to support the price.
However, the selling pressure continued to mount in 2013. Soh and Quah intended to continue their scheme by using the controlled accounts to buy up shares.
Though the endeavour was supposed to support the price of BAL shares, it failed.
The Aftermath
In October 2013, the prices of the stocks crashed, wiping out $7.8 billion in market capital.
The Commercial Affairs Department (CAD) launched a wide-scale investigation.
They searched more than 50 locations and also interviewed more than 70 people.
In addition, they analysed around two million emails, half a million trade orders, thousands of phone records and financial statements.
Soh and his accomplices were arrested on 24 November 2016.
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The Trial
In 2019, Goh pleaded guilty to two charges under the Securities and Futures Act – false trading and market rigging.
He was sentenced to three years imprisonment.
However, the trial for Soh and Quah lasted nearly 200 days over four years.
Quah even denied her role till the very end. Allegedly, Quah had previously said, “What are you scared of? My house is full of lawyers.”
On the first day of their trial in 2019, Soh and Quah pleaded not guilty to 189 charges and 179 charges respectively.
On 5 May 2022, both were acquitted of eight charges of deception.
While Soh was found guilty of 180 of 188 charges faced, Quah was convicted of 169 of 177 charges faced.
The duo were convicted of a record number of 329 successful charges.
Soh and Quah remained deeply involved with matters relating to the accounts even after the crash on 4 October 2013.
However, Soh, as an undischarged bankrupt, was not allowed to be involved in matters pertaining to the management of a company without permission from the Official Assignee.
Soh has been in remand since 25 November 2016, while Quah is out on $4 million bail.
Sentencing
According to some lawyers, the jail sentences of Soh and Quah, 36 years and 20 years respectively, is the longest custodial sentence for market manipulation in Singapore.
The High Court has granted a stay of the executions of their sentences after their defence lawyers said that they would file an appeal by the end of Wednesday.
However, Soh will not be appealing against the conviction for three charges.
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