Wednesday, February 3, 2016

The man prosecutors say is likely behind Singapore’s stock rout

John Soh Chee Wen is used to being accused of wrongful activity.

Soh, a bankrupt Malaysian businessman last week fingered by Singapore prosecutors as the likely mastermind behind the city’s biggest ever stock market manipulation scheme, has spent much of the past 20 years fending off allegations that he’s alternatively a front, an asset trader or a pump-and-dump operator.

“I’m battle hardened,” the 57-year-old, who’s out on bail during investigations, said in an interview on Jan. 27. In Singapore, a person can be arrested and out on bail even before charges are brought.

In the latest case, prosecutors said they are likely to charge Soh this year with being behind “serious criminal activities” that wiped $8 billion off the value of shares of three companies in October 2013. For his part, Soh said in the interview that the crash in the shares of mining companies Blumont Group, LionGold Corp. and Asiasons Capital Ltd., now known as Attilan Group, was due to a “collection of ad hoc events” triggered by an unexplained phenomenon.

The rout has been blamed for falling trading volumes and a loss of investor confidence in Southeast Asia’s biggest stock market. It led to rule changes and triggered the city’s largest securities fraud probe, an investigation that’s looked into some 500 trading accounts, 20,000 e-mails, 1,100 bank accounts and heard from 70 witnesses, but hadn’t pointed to a culprit. Until, that is, Soh was accused in court on Jan. 27 of being “probably the mastermind” of the 2013 event.

In 2007, Soh pleaded guilty and was fined in neighboring Malaysia for his role in a securities fraud case. Last week’s allegations are a “misunderstanding,” he said in an interview. Rather, he said, he was the biggest promoter of the companies whose shares took a nosedive more than two years ago. Soh said he is an adviser to the chairman of LionGold.

“I was one of the early and chief proponents of trying to build a sizable mining presence in Singapore,” he said in an interview at a cafe overlooking the Singapore River. “We -- me and some investors -- saw an opportunity.”

The group picked up undervalued Canadian and Australian mining assets and Soh said he went on road trips promoting LionGold, the glories of Singapore and its market efficiency.

“Unfortunately, instead of being labeled as the architect of a potentially large home-grown mining company, now they’re calling me the mastermind,” Soh said.

The opportunity they saw was a plan to defraud investors, according to Singapore’s prosecutors. Share prices of the three firms surged as much as 800% over nine months in a buying frenzy. The benchmark Straits Times Index was unchanged during that period. Then, in the space of a week in October 2013, the stocks crashed to pennies, plunging by at least 87%. The shares are now 99% off their peaks.

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