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 S$8 billion ($5.6 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 percent 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 percent. The shares are now 99 percent off their peaks.
The rout has hurt market credibility, investigators said in court documents, which didn’t give details of the alleged plot. The three commodity companies have said they aren’t aware of what caused the share plunge. Banks and brokers have sued their clients and others to recover at least $230 million from the rout.
“We’re still not aware,” said Raymond Tan, chief executive officer of LionGold, referring to the reason for the company’s stock plunge. Blumont’s executive director Ng Kim Huatt didn’t answer repeated calls to his mobile phone. Calls to Attilan’s number listed on regulatory filings went to a voice recording which said the number wasn’t available.
Last week’s hearing was precipitated by a request from Soh, whose passport has been impounded under the terms of his bail, that he be allowed to travel to Malaysia to visit his 81-year- old mother, who he said is in ill health, and also to attend his son’s wedding. The request was denied.
The Monetary Authority of Singapore, which is jointly probing the case with the Commercial Affairs Department, said in the court papers it was concerned that Soh was a flight risk.
Anyone convicted of false trading or deceptive and fraudulent activities in Singapore faces a maximum jail term of seven years and a fine of as much as S$250,000.
Soh said in the interview he’s ready for the day when he might be charged and can tell his side of the story in court. He declined to comment further on the case.
Soh said he dropped out of a Malaysian university in 1979 after a week to sell t-shirts and shampoo. In 1981, the then-21- year-old made his first million ringgit before losing it all in 1984. Soh said he took on jobs trying to restructure companies and even helped clean toilets during the Malaysian recession in 1985.
He spent the next decade acquiring companies, held positions in Malaysia’s second-largest political party and traded stocks on borrowed money. In 1996, he formed a partnership with the son of Malaysia’s then transport minister, creating a business empire around Promet Bhd. and Rekapacific Bhd. That relationship later soured and things unraveled for Soh during the Asian financial crisis as business slowed and debts mounted.
“Politics was my first love and deal making was my second nature,” Soh said. “You need to have certain masochistic tendencies to do deals and politics.”
Rekapacific, a property developer, was delisted in 2005, found by the Malaysian stock exchange to have broken its rules for failing to provide financial reports from 1999 to 2001. Construction firm Promet was fined in 1997 for not disclosing share sales.
Calls to Rekapacific and Promet listed in Malaysia’s public phone directory went either to a fax machine or the lines were busy.
In 1999, Soh left Malaysia, returning in 2002 to face charges of defrauding a local brokerage of 520 million ringgit ($125 million). Soh denied claims by Singapore prosecutors that he fled his home country before authorities there could arrest him. In 2007, Soh pleaded guilty for his role in submitting false information to Malaysia’s stock exchange and was fined 6 million ringgit.
Soh, the son of a shopkeeper turned businessman, looked to Singapore for his next venture. He was traveling to Singapore from the Malaysian capital Kuala Lumpur at least every other week until April 2, 2014, when he was arrested by Singapore authorities and questioned about his role in the stock crash.
Later that year, investigators expanded their probe and sought data from executives from six companies that had links with LionGold, Asiasons and Blumont.
Soh has since October been acting CEO at Dongshan Group, formerly known as Greatronic Ltd., which was delisted from the Singapore Exchange in 2008, according to the company’s website. The job at the investment holding company pays him S$3,000 a month, according to court papers.
Dongshan’s director Tiong Sing Fatt said in an e-mail that the company is standing by Soh and described him as a “brilliant turnaround strategist.”