SINGAPORE: Dr Goh Jin Hian, the former chief executive officer of investment holding company New Silkroutes Group (NSG), went on trial on Wednesday (Feb 4) for false trading.
Dr Goh, 57, allegedly conspired with other executives from NSG, a publicly traded company, to push up the share price as the company’s business strategy was premised on a high share price.
The false trading was carried out by Dr Goh himself, along with a market maker engaged by NSG, and NSG’s finance director, the prosecution alleged.
Dr Goh, the son of former prime minister Goh Chok Tong, on Wednesday claimed trial to all the charges against him, along with former executive director and chief corporate officer of NSG, 55-year-old Kelvyn Oo Cheong Kwan.
Dr Goh and Oo each face 31 charges of conspiring to create a misleading appearance of NSG’s share price.
Dr Goh faces another eight charges of “doing things with the purpose of creating a misleading appearance of NSG’s share price”.
The two men allegedly conspired with former NSG finance director William Teo Thiam Chuan and market maker Huang Yiwen to create a misleading appearance of NSG’s share price, by placing orders and executing trades for NSG shares over 31 dates between Feb 26, 2018 and Aug 27, 2018.
As part of that conspiracy, Huang placed orders and executed trades for NSG shares in the trading account of GTC Group on 30 days.
Dr Goh allegedly placed orders and executed trades for NSG shares in his personal trading account on five days, while Teo placed orders and executed trades for NSG shares using NSG’s share buyback trading accounts on 13 days.
THE PROSECUTION’S CASE
In their opening statement, Deputy Public Prosecutors Suhas Malhotra, Hidayat Amir and Sarah Thaker outlined the case against Dr Goh, a practising medical doctor, and Oo, a corporate lawyer by training.
NSG is a Singapore-incorporated publicly traded company whose securities have been listed on the SGX mainboard since 2002. Initially, NSG distributed electronic and IT products before moving into the oil trading business.
Around December 2016, it began moving into the healthcare business by acquiring medical and dental clinics as well as medical supply companies.
At the time of the offences, Dr Goh was NSG’s CEO and was the most senior executive.
A medical doctor by training, Dr Goh also has a Master of Business Administration. Oo and Teo both reported to Dr Goh as chief corporate officer and finance director respectively, while Huang was the director of GTC, a market maker that could be engaged by public companies and that could both buy and sell orders on the SGX.
From Feb 26 2018, NSG engaged GTC’s services for six months.
The prosecution’s case is that NSG’s strategy was premised on a high share price, and a flagging share price could undermine deals that were lined up.
NSG used its shares as currency, either by issuing shares as consideration for acquisitions or by issuing fresh shares to raise capital.
For example, between May 2017 and February 2018, NSG paid for the acquisitions of clinics and medical supply companies through its shares instead of cash.
It also raised capital by issuing shares.
“In other words, in about 10 months, NSG issued (or promised to issue) over 100 million new shares at prices between 44 and 66.7 cents per share,” said Mr Malhotra. “This set the stage for the trading halt, suspension and market rigging that followed.”
In November 2017, NSG requested that SGX halt trading in its shares, which was granted. The shares closed at 28.5 cents the day before the trading halt.
In early December 2017, NSG announced that it was in the process of negotiating certain acquisitions and required more time to complete the negotiations. It requested a voluntary suspension of its shares.
In February 2018, after nearly three months of suspension, and just days after announcing three major deals, NSG announced that its shares would resume trading the following day.
The prosecutors said they would prove that Dr Goh, Oo, Teo and Huang began rigging NSG’s share price “from the very moment that trading resumed”.
UNDER PRESSURE: PROSECUTION
Mr Malhotra said the three men from NSG were under pressure to meet the prices the company had already issued shares at, or promised to issue shares at, during the suspension.
He alleged that Dr Goh, Oo and Teo conspired with Huang to artificially inflate NSG’s share price.
The prosecution said it intends to prove its case with: Objective contemporaneous chat messages and emails, an expert’s analysis of the trades, and evidence from the convicted Huang and Teo.
Mr Malhotra said the chat messages in a WhatsApp group comprising Dr Goh, Oo and Teo will show the trio discussing their plan to push up NSG’s share price.
The prosecution will also show a chat where Teo gives Huang instructions, telling him the target price and urging him to hit those targets.
