SINGAPORE — The first of three individuals linked to the penny stock crash of 2013, which wiped out S$8 billion from the Singapore stock market, will be thrown behind bars for three years.

Goh Hin Calm, 59, formerly the interim chief executive officer of building firm Ipco International, pleaded guilty on Wednesday (March 20) to two counts of abetting what prosecutors called “the most audacious, extensive and injurious market manipulation scheme ever in Singapore”.

To date, more than more than S$350 million in losses to financial institutions remain unpaid, the court heard.

Another four counts of similar offences were taken into consideration during sentencing.

Delivering his sentence remarks, Justice See Kee Oon noted that the scheme was “sophisticated, systematic and sustained”.

“The sheer magnitude of the market manipulation would also have inevitably resulted in serious damage to investor confidence and… reputation damage,” the High Court judge added.

Goh’s decision to plead guilty came as the three accused were due to go to trial last week. The other two are Malaysians John Soh Chee Wen, 59, and Quah Su Ling, 54. Their trial will now start on March 25.

Court documents revealed that Goh and Soh were acquainted some time in 1994 or 1995, when Soh’s company bought over Ipco, now renamed Renaissance United.  

Quah became Ipco’s director and chief executive officer in 2003, making her Soh’s boss.

OPENED MULTIPLE ACCOUNTS

Deputy Public Prosecutor (DPP) Nicholas Tan said that Goh played two main roles in the scheme, and he did so knowing that Soh and Quah wanted to “create a false appearance” in the market for the securities.

As early as 2008, he opened multiple trading accounts across Singapore, using his and his wife’s names, for Soh and Quah to use.

Soh and Quah, who were in an intimate relationship at the time of the offences, made use of these accounts to trade and hold securities in Blumont Group, Asiasons Capital as well as LionGold Corp.

The duo are alleged to have controlled a web of 189 trading accounts — including the 10 made in Goh and his wife’s names — to create an artificially inflated market for Asiasons, Blumont and LionGold shares in the months leading up to the 2013 crash.

By 2011, Goh was starting to handle the finances of the scheme, receiving and making more than 1,200 payments on behalf of Soh and Quah. These were made in and out of a pool of funds that he managed.

The pool of funds was at times worth more than S$2 million.

In total, prosecutors said that Goh arranged around S$30 million in outgoing payments on behalf of Soh and Quah.

Between January 2013 and October 2013, Soh and Quah were allegedly responsible for carrying out trades in billions of shares for publicly listed companies Asiasons, Blumont and LionGold, constituting between 60 per cent and 90 per cent of the total traded volume for the entire market. The two were said to have done this almost every available trading day.

‘FINANCE MANAGER’ OF SCHEME

Urging the court to impose a sentence of three years’ jail, DPP Tan said that Goh was “in effect, both seed-funder and finance manager” of the scheme and he played a “substantial, egregious…and instrumental” role.

DPP Tan added that Goh knew the “immense scale of the scheme”, and that he was instrumental because he was someone that Soh and Quah could trust.

“They needed someone who would keep their secret for them,” the prosecutor said.

The losses sustained from the aftermath of the scheme’s collapse was also not inconsequential, especially to “innocent parties”, the prosecution noted.

“(They include) losses incurred in trading accounts, which remain unpaid till today, and which therefore fall on the financial institutions (where) those accounts are held.”

Goh’s lawyer Adrian Wee argued that his client had an “extremely limited” role in the scheme.

Mr Wee, urging the court to also impose a jail sentence of three years, said that Goh had "no part in conducting, strategising or formulating any of the trades which formed part of the scheme”.

Justice See, in sentencing Goh, said: “His role may have been facilitative in nature… (but it was) necessary for the functioning of the scheme. (It was) not one-off or sporadic, but extensive and prolonged.”

Still, the judge noted that Goh was “not the mastermind” of the scheme, nor did he know the full extent of the scheme.

For his offences, Goh could have been fined up to S$250,000 for each charge, and jailed up to seven years.

ABOUT THE CRASH

• The shares of three companies — natural resources investment company Blumont Group, alternative investment firm Asiasons Capital and gold miner LionGold Corp — surged more than 800 per cent over several months in 2013, turning them briefly into billion-dollar companies.

• All of a sudden, on Oct 4 that year, the shares crashed by more than 90 per cent after a frenzied 40 minutes of trading, wiping billions of dollars in market value off the three firms. It sparked a sell-off in penny stocks on the Singapore Exchange (SGX).

• SGX suspended trading in their shares after the free fall, but stock prices tumbled further when trading resumed the next trading day.

• The three stocks lost more than S$8 billion in combined market value in less than two days of trade. Before that, Blumont’s share price had risen more than 1,000 per cent since the start of 2013.

• The authorities tightened trading rules in the aftermath of the crash episode, which created immense market volatility.

• Goh, Soh and Quah were charged in November 2016 after investigators from the central bank and the police went through two million emails, thousands of phone records and financial statements and 180 trading accounts to solve the largest securities fraud in Singapore’s history.