SINGAPORE (AFP) – A Malaysian businessman convicted of masterminding a stock scam that wiped USD5.8 billion off Singapore’s exchange was sentenced yesterday to 36 years in jail by a court in the city-state.
John Soh Chee Wen orchestrated the scheme, according to court documents, and his accomplice, Singaporean Quah Su-Ling, was also given a 20-year jail term.
Both were convicted in May of using over 180 trading accounts to inflate the share prices of three companies in what High Court judge Hoo Sheau Peng called a “scheme of substantial scale, complexity and sophistication”.
“Armed with a good understanding of the securities and financial markets, and tapping on their extensive connections and networks, they boldly exploited the system,” she said during sentencing.
“Immense harm” was caused by the stock market crash, she added.
Prosecutors called it the “most serious case” of stock market manipulation in Singapore, a global financial centre.
They detailed how the accused planned a “complex and elaborate fraud” to manipulate the share prices of Blumont Group, Asiasons Capital and LionGold Corp.
Soh and Quah used the shares as collateral, convincing several banks – including Goldman Sachs – to extend more than USD123 million in credit to finance their scheme.
They then used this cash to create demand for penny stocks, reportedly managing to push up some prices by around 800 per cent in 2013.
On October 4 that year, however, prices crashed, wiping an estimated SGD8 billion from the Singapore Exchange.
Singapore authorities said the incident dented investor confidence and directly affected trading volumes in 2014.
Soh was convicted on 180 out of 188 charges and Quah on 169 of 177 charges. They plan to file an appeal, according to court documents.