Malaysian jailed 36 years for Singapore penny stock crash

The mastermind of Singapore's "most serious case" of market manipulation which wiped out some US$5.8 billion (RM25.71 billion) in penny stock scams almost a decade ago has been sentenced to 36 years in jail, The Straits Times reported today. 

Prosecutors had sought a 40-year jail term for Malaysian John Soh Chee Wen, who was convicted in May alongside Singaporean Quah Su-Ling. 

Soh's lawyer, N Sreenivasan, however asked for jail of between seven and 13 years, arguing that his client and Soh were not the only ones involved in the scheme in which the duo were convicted of using more than 180 trading accounts to inflate the share prices of three companies. 

"Their sentences cannot be such that they are the scapegoats for the wrongs of others," Sreenivasan was quoted as saying.

But High Court judge Hoo Sheau Peng, citing "the large number of controlled accounts and intermediaries and financial institutions involved", said the duo were to be "held responsible for most of the trades". 

Quah meanwhile was sentenced to 20 years in jail. Both she and Soh are appealing against their sentences. 

In the case which prosecutors had called "the most serious case" of stock market manipulation in Singapore's history, Soh and Quah were accused of planning "a complex and elaborate fraud" to manipulate the share prices of Blumont Group, Asiasons Capital and LionGold Corp.

AFP reported that Soh and Quah used the shares as collateral, convincing several banks – including Goldman Sachs – to extend more than S$170 million (US$123 million, RM559.38 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% in 2013.

But on Oct 4, prices crashed, wiping an estimated S$8.0 billion from the Singapore Exchange.

In May, Hoo convicted Soh of 180 out of 188 charges and Quah of 169 of 177 charges.

He said he was "satisfied beyond reasonable doubt that there existed a conspiracy between the two accused persons to manipulate the market" .

Soh has been under remand since the duo were first charged in 2016, while Quah is out on bail.