Just who is the Malaysian businessman now assisting probe into 2013 penny stock crash?
Tycoon. Corporate bigwig. Dealmaker. These are among the terms used to describe Mr John Soh Chee Wen, 56, the Malaysian businessman labelled by the authorities as the "probable mastermind" behind what is arguably Singapore's biggest and most complex fraud case in recent years.
In Oct 2013, several Singapore-listed companies crashed spectacularly, in particular Blumont Group, LionGold Corp and Asiasons Capital, whose shares had skyrocketed over just nine months but saw $8 billion in market value wiped out in just days.
Brokerage firms, remisiers, dealers and small investors were among the casualties of the meltdown. Many lost large sums. Banks and brokerages lodged lawsuits to get clients to pay up. Investor confidence was hit and trading volumes on the Singapore Exchange (SGX) sharply fell off.
A significant development came last week at a public hearing in the High Court. It emerged that Mr Soh was assisting the authorities with their investigations when he applied to vary his bail to be allowed to travel to Malaysia.
WHO IS SOH CHEE WEN?
Mr Soh was once one of Malaysia's biggest stock market investors. His fortunes soared in 1996 from a partnership with Mr Ling Hee Liong, son of former Malaysian transport minister and former Malaysian Chinese Association president Ling Liong Sik. They subsequently fell out.
He had started out as a salesman but later cut his teeth on restructuring troubled companies. He went on to build several companies in sectors such as construction and hospitality. By the mid-1990s, he was making headlines dabbling in numerous mergers and takeovers.
Formerly a top member of the Malaysian Chinese Association, Mr Soh was linked to listed Malaysian entities, including Promet; Uniphoenix Corp; Plantation and Development; and Kelanamas Industries, most of which went under in the 1997-1998 Asian financial crisis.
In 1995, he became the largest shareholder and director in Singapore-listed Inno-Pacific Holdings, now known as Innopac, and also controlled Ipco International. But he stepped away from those companies around 1999.
In 1998, Malaysia's Securities Commission launched an investigation into whether Mr Soh used nominees to gain control of brokerage firm Omega Securities, violating a Malaysian law that forbids anyone from owning more than one brokerage without government approval. He already controlled at least one other brokerage.
In 1999, there was an arrest warrant put out on him, when he was out of the country.
He returned to Malaysia in 2002 and was immediately arrested. He was charged and convicted in 2007. Mr Soh admitted to abetting former TA Securities boss Tiah Thee Kian to provide false statements to the Kuala Lumpur stock exchange involving shares of Omega Securities in 1997. He was given the maximum fine of RM6 million.
NOT PERMITTED TO LEAVE S'PORE
Nearly a decade after his conviction in Malaysia, Mr Soh is again facing the authorities, this time in Singapore, over what prosecutors called his "significant role" in the penny stock crash.
"I've survived worse," Mr Soh told The Straits Times, a day after the High Court denied him permission to leave the country.
The widower had asked for permission to visit his ailing 80-year-old mother and to attend his son's wedding in Malaysia on Feb 20, but prosecutors argued that investigations into the case are at an advanced stage.
Mr Soh's lawyer, Senior Counsel Tan Chee Meng of WongPartnership, pointed out that the businessman had been fully cooperative with investigators and given over 800 pages in statements containing more than 2,000 questions and undergone "many statement takings that lasted 10 hours and longer".
And, in fact, Mr Soh has just recently taken on a job in Singapore as the chief operating officer of Dongshan, an investment holding company formerly known as Greatronic, where he is getting paid $3,000 a month to turn its fortunes around. On top of that, he is getting a salary of RM100,000 (S$34,000) a year paid by The Lakeview Club, a sports club in Malaysia.
Documents filed by the prosecution in Mr Soh's case reveal the extent of the probe into the penny stock crash, conducted jointly by white-collar crimebuster the Commercial Affairs Department (CAD) and the Monetary Authority of Singapore. They raided more than 50 locations, including residences, offices and brokerages, and have so far interviewed some 70 witnesses.
Some 147 telephones and tablets, 413 desktop and laptop computers and 175 boxes of documents, including accounting records, bank and trading statements and corporate secretarial records, have also been seized. Investigators have reviewed around 20,000 electronic mail items, monthly account statements relating to more than 500 trading accounts, and more than 1,100 bank accounts.
For the many investors who have had their fingers burnt in the penny stock crash, getting closer to the causes of the crash will be important.
Veteran investor Mano Sabnani is relieved that the investigations may soon see closure.
"If they can conclude the investigation, that would be good for the Singapore market, which has been under a cloud since 2013," he said.
"SGX is already reviewing the minimum trading price rule (a proposal that mainboard-listed stocks must have a minimum trading price), and trying to grow retail participation and improve the regulatory framework. If the penny stock issue could be resolved also, then the market is in a good position to grow and revitalise itself."
This article was first published on Jan 31, 2016. Get a copy of The Straits Times or go to straitstimes.com for more stories.