Witness cites 'clerical oversight' as defence alleges lack of anti-money laundering checks

Amala Balakrishner
Updated

SINGAPORE (May 21): Prosecution witness Goh Chiu Goik, an assistant general manager at Phillip Securities (PSPL), in court on Tuesday said some trading forms that were not correctly filled out because of “clerical oversight” that led to some details not being checked properly.

In his cross-examination of the witness, senior counsel N Sreenivasan – the defence counsel for alleged 2013 penny stock crash mastermind John Soh Chee Wen – had brought out several trading forms in which the name on the form did not match the name on the counter number.

Sreenivasan questioned Goh on the process PSPL undertakes when verifying such forms.

At one point, Sreenivasan asked if Goh was “prepared to admit that, as far as PSPL was concerned, the checking of accounts for [anti-money laundering] when collecting cash was not properly done”.

The defence counsel then proceeded to question Goh on whether the upper management at PSPL checks the trading patterns in a remisier’s accounts when a remisier asks for an increase in his global trading limits.

In particular, Sreenivasan drew attention to accounts under one Henry Tjoa, who was supposedly the PSPL representative for accounts handled by Soh and Quah Su-Ling.

Soh and Quah are accused of manipulating three stocks – Blumont Group, Asiasons Capital (now known as Attilan Group) and LionGold Corp (collectively known as BAL) – leading to the crash that wiped out $8 million from the market.

Goh responded that she was not in a position to answer the question, because the decision to increase the remisier’s global trading limit was not made by her, and she could not comment on whether the company had looked into the accounts he operated.

She added that Tjoa had left PSPL in early 2017, “after making himself bankrupt”. However, she added that she is "not in a position to comment” on whether Tjoa would have still continued to work at PSPL had he not been deemed bankrupt.

“Phillip had gone into [the trades] with its eyes wide open, so it is highly hypocritical of you as a representative to say you were deceived and other people did not cause Phillip’s loss,” Sreenivasan told her.

It was clarified that “other people” in this case referred to Phillip’s own traders, rather than stock market manipulators.

“The truth of the matter is that other people supported Phillip’s loss,” Sreenivasan suggested. Goh disagreed.

In his re-examination of the witness, deputy public prosecutor Nicholas Tan sought to clarify PSPL’s verification of account holders’ details, particularly that of third parties.

Goh replied that “written authorisation is needed” for trades made by third parties.

Tan also brought Goh through some calculations to determine the collateral needed for marginal financing, adding that Tjoa’s commission from the BAL trades was not reflective of a “happy ending" for Phillip.

Goh agreed. “We suffered more losses than what we gained,” she said.

“It does not make sense for any financial institution to close their eyes and shut their eyes… to what is going on, because as this case shows the amount of actual losses could catastrophic,” the DPP concluded.

Later, Maybank Kim Eng (MBKE) Securities dealer Ong Kah Chye, the prosecution’s 11th witness, was called to the stand. May 21 is his last day at MBKE.

During examination-in-chief by deputy public prosecutor Peter Koy, Ong said that he had only received instructions on orders from Soh, which were “mostly on market orders [that were] normally in line with market price – the market transacted price”.

He added that the orders could normally be keyed in immediately. “Normally we don't have to call back to confirm the order,” Ong said.

While Ong said he could not recollect if Soh had given him orders to be keyed in later when the market volume or price reached a certain level, he stressed that he would not enter orders into the trading system without receiving any instruction.

In his cross-examination, Quah defence counsel, Phillip Fong, managing partner at Eversheds Harry Elias, took Ong through the concepts of contra-trading and forced selling.

“To your knowledge, how do some market traders take advantage of forced selling in the market?” Fong asked.

Ong responded that he does not think he has the expertise to answer the questions, since he is not a market trader.

Like several prosecution witnesses before him, Ong admitted that he initially did not come clean during investigations by the Commercial Affairs Department.

He cited two reasons for lying to the CAD.

First, Ong said Soh, whom he described as a “close friend”, had told him something along the lines that remisiers or trading representatives were holding hands and not disclosing that Soh had given trade instructions.

Secondly, Ong said that he was confused, and had selected parts of the memory that were in his favour to explain his actions.

The trial will resume on May 22, where the defense counsels will continue with their cross-examination of Ong. This will be the final week of the first tranche of hearings for the 2013 penny stock crash.

2013 Penny Stock Crash

John Soh Chee Wen is the alleged mastermind behind the penny stock crash of 2013, which prosecutors have called “the most audacious, extensive and injurious market manipulation scheme ever in Singapore”.

Together with his alleged co-conspirator and girlfriend Quah Su-Ling, Soh and his associates are alleged to have been behind the massive rise and sudden collapse of shares in Blumont Group, LionGold Corp and Asiasons Capital (now Attilan Group), which wiped out some $8 billion in market value.

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