SINGAPORE: The conspirators of a market manipulation scheme that led to a S$8 billion (US$5.9 billion) penny stock crash in 2013 appealed their convictions and sentences before the Apex court on Monday (Mar 3).
John Soh Chee Wen, a Malaysian businessman and his ex-partner Quah Su-Ling – the former CEO of Singapore Exchange (SGX)-listed IPCO International – both received hefty sentences following their convictions in May 2022.
After a lengthy trial spanning almost 200 days and involving close to 100 prosecution witnesses, both were found guilty of what was said to be the most serious case of market manipulation in Singapore.
From August 2012 to October 2013, Quah and Soh artificially inflated the share prices of three penny stocks – Blumont, Asiasons and LionGold.
According to the prosecution, the pair arranged and controlled infrastructure nominee accounts that traded among themselves and with unknowing market participants, creating an impression of demand and supply for these shares.
They concealed their involvement in these accounts and deceived financial institutions into granting hundreds of millions of dollars in financing to further the scheme.
Their plans unravelled on Oct 4, 2013 when the share prices of the three companies crashed, erasing S$8 billion in market capitalisation from SGX.
The duo’s offences included false trading, price manipulation, deception and cheating. Soh was convicted of additional charges of witness tampering. He was sentenced to 36 years’ jail on 180 charges and Quah to 20 years on 169 charges.
Both appeared before Chief Justice Sundaresh Menon, Justice Andrew Phang and Justice Tay Yong Kwang on Monday, with their appeal set to be heard over several tranches.
Soh was represented by Senior Counsel Sreenivasan Narayanan while Quah was represented by lawyer Sivananthan Nithyanantham.
The lawyers opened the appeal by addressing judges on points of the law, focusing on the charges that the two accused person were convicted on.
“The convictions imposed are tainted with grave errors, resulting in a serious miscarriage of justice,” said Mr Sivananthan, urging the Court of Appeal to set aside Quah’s conviction. He said that the trial judge had erred in convicting Quah due to defective charges, raising several points in support of this.
These included the argument that the amended charges Quah was convicted on violated the criminal procedure code which stated that each distinct offence must have a separate charge and be tried separately. But the amended charges against the accused were based on two distinct offences at the same time under Section 120B and Section 109 of the Penal Code, Mr Sivananthan said.
Section 120B of the Penal Code deals with a criminal conspiracy without an act having taken place, while Section 109 deals with the abetment of an offence if an act is committed in consequence.
Mr Sivananthan argued that the judge wrongly allowed Quah to be open to punishment under Section 109 of the Penal Code rather than Section 120B. The failure to consider evidence for each alleged offence separately led to “confusion and prejudice” against Quah, he said.
The judges found the point to be without merit unless the defence lawyer could show that the prosecution had been wrong in relying on a provision that it could establish.
The lawyers argued that the trial judge ignored the essence of conspiracy, and that in finding an overarching scheme or agreement between the accused persons, cannot justify all the individual charges as separate offences.
The lawyers also took issue with what they said were vague charges which lacked specific details on the agreements between the accused persons to commit the offences. The prosecution failed to put to the accused that each act was tied to a “specific, independent and separate agreement” between the accused persons, Mr Sivananthan said.
Mr Sreenivasan said the charges had not included particulars of the charge such as the broker, the account, and which broking house was used. Instead the prosecution agglomerated 179 accounts run by 57 brokers in more than 20 broking houses.
“It cannot be just because case is complicated or difficult or takes a long time that the prosecution cannot give particulars of charges,” said Mr Sreenivasan.
Mr Sivananthan also argued that the judge had erred in making adverse inferences against Quah for choosing not testify in the trial.
Quah had been declared bankrupt in May 2015 and did not have a lawyer at the close of the prosecution’s case due to financial constraints. She chose to remain silent as she was uncertain of the consequences should she testify and be cross-examined without a lawyer, according to court proceedings.
The judges dismissed this point as without merit, as the trial judge was entitled to draw inferences in the circumstances she was presented with.
Mr Sivananthan said that the trial judge had erred in using Soh’s convictions on his witness tampering charges to wrongly infer Quah’s guilt for her charges, as there was no evidence linking Quah to witness tampering. On hindsight, the witness tampering charges should have been taken on a separate trial rather than a joint trial, the lawyer said.
In rebuttal, the prosecution pointed out that Quah had no initial objections to the joint trial, and described her objection now as “extremely delayed” and “extremely artificial”.
Chief Justice Menon noted that if parties had not objected to a joint trial earlier, it was “too late in the day” to take it up in appeal, adding that it was still open for parties to argue that evidence was evaluated wrongly. The judges concluded that there was no merit on this point.
The hearing will continue at a later date with both sides to prepare more material for the court beforehand.
Soh remains in remand while Quah is on bail.
