Singapore Probes Malaysian’s Role in 2013 Penny-Stock Routby and
Stock plunge had `huge impact' on Singapore markets: MAS
25 trading representatives assisting probe or had role in rout
Singapore is looking into a Malaysian businessman’s involvement in the city’s largest securities-fraud probe, where three companies suffered an unexplained free-fall that wiped out S$8 billion ($5.6 billion) in a penny-stock rout in 2013.
The investigation into John Soh Chee Wen’s role emerged in Singapore court proceedings Wednesday when he sought permission to leave the country. His application was denied. Soh, 57, has been assisting the Commercial Affairs Department in its ongoing probe of suspected stock-trading irregularities related to Asiasons Capital Ltd., which has been renamed Attilan Group Ltd., Blumont Group and LionGold Corp., according to his lawyer, Tan Chee Meng. He hasn’t been charged.
The stocks had surged by at least 800 percent in the nine months before their shares plunged over three days in October 2013, spurring brokers to clamp down on margin lending and denting trading sentiment in Southeast Asia’s biggest stock market. Singapore warned last year that it’s sparing no effort in its probe as it sought to shore up investor confidence following the penny-stocks rout.
"We’re not here to discuss why the market has been doing badly for the last three years," Tan said in court. “Let my client go home. He’ll come back and assist you.”
Soh, whose passport has been impounded and was barred from leaving the city-state since April 2014, sought the Singapore High Court’s permission to allow him to travel to Malaysia to visit his ailing mother and attend his son’s wedding, according to court documents.
Judge Chao Hick Tin denied Soh’s application to travel. Prosecutor Gordon Oh said the investigation has uncovered evidence that Soh may be the “mastermind” in a false trading and market-rigging case that led to the “unprecedented collapse” of the stocks.
Oh said the investigations are at an advanced stage and charges against individuals are likely to be filed by the end of the year.
Twenty-five trading representatives are assisting in the investigation, or are believed to have participated in “an elaborate scheme,” which has had a “huge impact” on Singapore’s capital markets, Lee Boon Ngiap, head of the Monetary Authority of Singapore’s capital markets group, said in court papers. The MAS, which is jointly probing the case, said in the court papers it was concerned that Soh may face criminal charges and was a flight risk.
The three companies have said they don’t know what caused the sudden declines. Banks and brokers have sued their clients and others to recover at least $230 million from the stock rout.
Singapore Exchange Ltd. Chief Executive Officer Loh Boon Chye has made it his top priority to restore confidence in the stock market. While the value of shares traded on the Singapore bourse increased 6.7 percent in 2015 to a daily average of S$1.11 billion, that’s still about 26 percent lower than in 2013 before the penny-stock crash, according to data compiled by Bloomberg.
The case is John Soh Chee Wen v Public Prosecutor, CM3/2016, Singapore High Court.