A total of 189 trading accounts belonging to 58 individuals and corporate nominees were used for trading BAL shares prior to their crash on Oct 4, 2013, which wiped out some $8 billion in market value. Goldman Sachs, Interactive Brokers and Saxo Bank were among the financial institutions tapped to provide funding for the scheme.
Soh was convicted of 180 charges and sentenced in 2022 to 36 years in jail. Quah was found guilty of 169 charges and given 20 years behind bars. They were granted a stay on execution of their sentences pending their appeal. The trial, presided by Justice Hoo, ended in June 2021 after nearly 200 days, featuring testimony from 95 prosecution witnesses.
Insiders not off the hook?
Deputy public prosecutor David Koh started the May 8 session by saying other individuals besides the two appellants may be dealt with after this appeal.
“The Monetary Authority of Singapore (MAS) is considering the appropriate regulatory action to be taken pending the outcome of this appeal. The possible regulatory actions which MAS may take include prohibition orders and/or reprimands,” he said.
See also: 'Girl Friday': Quah's lawyer distances her from penny stock scam
The Commercial Affairs Department has already given stern warnings to 13 individuals, including some trading representatives and account holders, according to Koh. They do not include Dick Gwee, Ken Tai, Henry Tjoa, Gabriel Gan and Leroy Lau, all of whom were found to have worked in concert or on their own to trade the stocks prior to the crash.
“We have not made a position in respect of these persons or the remaining persons involved, and that’s also pending the outcome of this appeal,” said Koh.
Gwee, Tai, Tjoa and Gan are described in court documents as the Manhattan House Group, a reference to their trading operations carried out from an office unit they had rented along Chin Swee Road.
See also: Penny stock crash architects challenge convictions as appeal resumes
‘Criminal ecosystem’
Koh went on to dispute Soh’s denials that he was the one directing the Manhattan House Group and Lau (who was then a proprietary trader with DMG & Partners Securities) to use the various trading accounts to manipulate the BAL shares.
“The evidence showed that in this ship that was being steered, the person who had his hands on the tiller at all times — even if he delegated certain parts of it to others — was Mr Soh and, together with him, Ms Quah,” Koh said.
“What they did was to essentially create a criminal ecosystem where these controlled accounts were being used to manipulate the liquidity of the shares, create a false appearance that there was demand and supply of these shares, and manipulate the price of these three counters.
“The manner in which they exercised control may have varied over time, but the ultimate purpose and goal for that control was the same throughout the scheme.”
Manhattan House Group
In addressing some of the prosecution’s arguments, Soh’s lawyer N Sreenivasan reiterated that the Manhattan House Group played a vital role in driving up the three stocks and that they did it on occasion without Soh’s knowledge.
Their credibility was also doubtful as these individuals, who testified as prosecution witnesses, were “pushing the blame to somebody else” and “did not want to implicate themselves further or implicate their friends”, according to the senior counsel.
“There are so many red flags that maybe the conviction on their evidence is unsafe,” argued Sreenivasan, who heads Sreenivasan Chambers.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
He also said Soh has been “significantly prejudiced” as certain key information on the BAL case given by Gwee to the Attorney-General’s Chambers was not admitted as evidence in court.
It was heard during the trial that Gwee had volunteered certain information to the prosecution in the hope of securing a plea bargain. Gwee and his family members were found to have made about $50 million in profits from trading the three stocks.
Quah just following instructions
On her part, Quah was merely a Girl Friday who took instructions from Soh “rather blindly” without full knowledge of the entire manipulation scheme, according to her lawyer N Sivananthan, who raised this point on May 6.
Sivananthan, a criminal lawyer with his own practice in Malaysia, reaffirmed the same point on May 8, likening Quah to “almost like a robot” and “a tool like everyone else”. Quah appeared exasperated when Sivananthan brought this up, as if in disagreement. “Nowhere do you see anywhere that she’s part of a plan, of a big game plan,” he added.
‘Rogue operation’
At the start of the second tranche of the appeal hearing on May 5, Sreenivasan contended that Soh was not entirely to blame and that the trial judge had downplayed the culpability of the Manhattan House Group, which he argued had actively traded the three stocks for their own gains prior to the crash.
In response, Chief Justice Sundaresh Menon said even if the Manhattan House Group had run a “parallel rogue operation on their own or for their own benefit”, that did not undermine the prosecution’s case that Soh himself did manipulate the shares.
“The two can perfectly co-exist. In the judge’s findings, there were suggestions that your client knew that Dick Gwee was profiting off these transactions and while he wasn’t thrilled about it, he allowed it to continue,” CJ Menon said.
The first tranche of the appeal hearing took place on March 3, with the defence asserting, among other things, that Judge Hoo was biased during the trial and that the prosecution was not specific in its charges relating to false trading and market manipulation.
