Former CEO of New Silkroutes Group Goh Jin Hian on trial for false trading

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.

THE CHATS

For example, on Mar 29, 2019, Teo bid for 300,000 NSG shares at 28.5 cents. The prosecution alleges that this successfully raised NSG's closing price to 28.5 cents. Without the intervention, the shares would have closed lower, said Mr Malhotra.

Dr Goh, Oo and Teo had a discussion in their chat group later that day, where Teo said: "We bid at 0.286. Close at 0.285. Vol: 1.325m. Bought 300K at 0.285."

In response, Dr Goh replied: "Looks like if we didn't step in, price would have closed at 0.275".

Teo replied: "Would have closed at 0.27 if we did not step in."

Dr Goh replied: "Yah. MM not very useful!"

Teo said: "Have to review if need to."

Oo then responded: "Mm didn't help us to close at the level? If he didn't we need to put him on notice and question why we can do it while he being the expert charging us a fee can't??"

In another set of text exchanges in April 2018 quoted by the prosecution, Dr Goh said: "We have to make it clear to GTC that we're very disappointed in the share price. We won't pay the monthly fees for the other months until the share price hits $0.40 in May. If we don't set these targets, it'll affect how Haitong, Shen Yuyun and our investors view our shares when we do the deals."

According to the prosecution, Goh then bought 1,000 NSG shares at 25.5 cents and 100 NSG shares at 26 cents in September 2018. 

Mr Malhotra said Goh then sent the following messages to Oo and Teo: "Guys, tell me how to do this, not why we can't do it" and "I closed today's shares at 0.26 by buying 1100 shares. Same thing I've been telling the market maker. There is no need to break the bank to keep our shares up".

The prosecution ended their opening statement by saying that the Securities and Futures Act is there to protect the integrity of the stock market.

"Markets only work when they reflect the interaction of genuine forces of supply and demand. Corporate executives who plot to artificially prop up their company’s share price strike at the very heart of (the law)," they said.

IO TESTIFIES

The prosecution's first witness was investigation officer Ms Jacqueline Wei. She testified that the police had uncovered the alleged NSG offences while investigating a case referred to them by the SGX involving market maker Huang Yiwen.

Ms Wei, who is also the investigation officer for the Hyflux trial, testified about how the police discovered chat messages that Teo had exchanged with Huang. Huang was suspected of conducting pre-arranged trading in public listed shares.

When the police launched an investigation against Teo in June 2020, they looked through his mobile phone and discovered messages by Dr Goh and Oo in a chat group that suggested their knowledge of the false trading.

Huang, who was involved in four conspiracies to rig the market or price for share or unit counters, was jailed for over two years in August last year.

Teo was given 12 weeks' jail in September last year.

The trial was slated to begin on Wednesday morning but was stood down to the afternoon as Ms Wei, who was also the investigation officer in the Hyflux case had to testify in the trial against former Hyflux leaders.

The trial continues.

Dr Goh is represented by Senior Counsel Tan Chee Meng, Mr Paul Loy and Mr Samuel Navindran from WongPartnership.

Allen & Gledhill's Senior Counsel Jason Chan, Ms Leong Yi-Ming and Mr Nikhil Coomaraswamy represent Oo.

If convicted, the men face a jail term of up to seven years, a fine of up to S$250,000 (US$183,100), or both for each charge.