SINGAPORE: Teo Thiam Chuan William, the former finance director at New Silkroutes Group (NSG), has been sentenced to 12 weeks in jail on Monday (16 September) in court for his role in a market rigging scheme.

This sentencing marks the first revelation of case details as Teo is the first among four co-accused to plead guilty.

During sentencing argument, the prosecution has labeled former CEO Goh Jin Hian as the “mastermind” behind the scheme.

Teo, 55, pleaded guilty to six charges under the Securities and Futures Act for abetment by conspiracy over false trading and market rigging transactions.

Goh, the son of former Prime Minister Goh Chok Tong, is alleged to have led a conspiracy to inflate NSG’s share price from S$0.285 to S$0.50 in 2018.

NSG, an investment holding company listed on the Singapore Stock Exchange (SGX) since 2002, operates subsidiaries in oil trading, information technology, and healthcare.

As the finance director, Teo was responsible for managing the company’s accounts, overseeing funding, mergers, and acquisitions. He also controlled NSG’s corporate securities trading accounts and was authorized to conduct share buybacks.

The co-accused in the case include Oo Cheong Kwan Kelvyn, 53, who was the executive director and chief operating officer of NSG, and Huang Yiwen, 40, the sole director of the commercial market maker GTC Group.

Originally, NSG focused on oil trading, electronics, and IT product distribution.

In December 2016, the company expanded into healthcare by acquiring clinics and medical supply companies. These acquisitions were primarily financed through the issuance of NSG shares.

However, in 2017, NSG’s efforts to acquire additional companies and raise capital through private placements were hampered by a decline in its share price.

From January to May 2017, NSG’s share price fluctuated between S$0.70 and S$0.90. However, it dropped to approximately S$0.40 to S$0.50 in June and fell further to a low of S$0.285 in November.

On 29 November 2017, NSG applied to halt trading of its shares, which led to a trading suspension a few days later. During the suspension, which lasted until 25 February 2018, NSG entered into several corporate transactions involving potential new share issuances.

On 21 February 2018, NSG proposed a placement of over 11 million new shares at S$0.44 per share to an external investor, Dr Andrew Chua Soon Kian, aiming to raise S$5 million. This placement was completed in March 2018.

Additionally, in February 2018, NSG announced a memorandum of understanding with Mr Shen Yuyun to acquire two medical supply companies in Shanghai, planning to issue new shares at S$0.50 each for the S$65 million acquisition.

The same month, NSG also disclosed a memorandum of understanding with Haitong International Securities, where Haitong would subscribe to a S$5 million convertible bond issued by NSG. The bond, maturing in two years, would offer an annual interest rate of 5 percent.

Prosecution Alleges Complex Scheme to Manipulate NSG Share Prices Using Multiple Accounts

While trading was suspended, Teo and his three co-accused allegedly engaged in a scheme to artificially inflate the price of NSG securities, according to the prosecution.

The scheme, as outlined by the prosecution, employed three primary methods: using GTC’s trading account to place and execute orders for NSG securities, utilizing NSG’s share buyback accounts for similar trades, and leveraging Goh Jin Hian’s personal trading account for additional transactions.

As a commercial market maker registered with SGX, GTC was prohibited from manipulating share prices. Market makers are typically required to enhance trading liquidity by providing competitive bid-ask quotes continuously within an agreed-upon spread.

Despite this, Teo, Goh, and Oo are alleged to have hired GTC to artificially boost and maintain NSG’s share price, masquerading as legitimate market-making activities. This manipulation aimed to enhance investor confidence and facilitate the completion of announced corporate transactions, as well as support future share placements.

On 4 February 2018, Goh reportedly instructed Teo to find a market maker to support NSG’s share price. Subsequently, NSG engaged GTC between 21 and 28 February 2018.

Goh, Teo, and Oo allegedly set a target price of S$0.50 for GTC to achieve.

Over the course of six months, starting from late February 2018, the four men are said to have conducted the market-rigging scheme.

Goh and Co-Accused Allegedly Discussed Timing and Pricing for NSG Trades

They communicated via text messages and emails to coordinate their actions, including timing and pricing for NSG securities trades. For instance, Goh allegedly urged Teo to place bids at specific times and requested that GTC be reminded of their target price of S$0.50 in an email.

In a group chat, Goh is said to have suggested delaying GTC’s payment until the share price reached S$0.40 by May.

The trading suspension on NSG shares was lifted after the market closed on 25 Feb 2018. The following morning, Teo and his co-accused allegedly strategized to boost the opening share price of NSG to reach their target.

According to the prosecution, Huang used GTC’s trading account to place buy orders during the pre-market routine before trading officially began at 9 am.

On 26 Feb 2018, NSG shares opened at S$0.390, representing a 36.84 percent increase from the last traded price of S$0.285.

Teo and Huang continued to place orders and execute trades in early March 2018 to further artificially inflate the share price.

The prosecution sought a 12-week jail sentence for Teo, describing the scheme as “sophisticated, well-coordinated, and effective” in manipulating the price of NSG shares to facilitate corporate transactions. They emphasized that Teo played a “critical role” as finance director in the scheme.

The prosecution noted that the scale of the market rigging was significant, causing “great distortion” in the market for NSG securities.

Pre-Trial Conferences for Goh, Huang, and Oo Set for 26 September

On the 31 days covered by Teo’s charges, the trades and orders executed by Teo, Huang, and Goh accounted for 28.78 percent of the total market volume of buy trades.

Additionally, they set the intraday high on 11 trading days and increased the closing price of NSG securities on 22 trading days.

The prosecution argued that the scheme was a “concerted and successful effort” to make NSG shares appear more attractive than they would have under normal market conditions.

It was intended as a “quick and convenient way” to support NSG’s expansion and raise capital through new share issuances. The use of GTC was described as creating “a veneer of legitimacy” for their manipulative trades.

Although Goh was identified as the mastermind, prosecutors highlighted Teo’s important role as the main liaison between NSG and Huang.

Teo is set to begin his jail term on Wednesday (18 Sept).

The cases for Goh, Huang, and Oo are currently at the pre-trial conference stage, with the next session scheduled for 26 September. Court records indicate that Huang intends to plead guilty.

Around 20 per cent of firms in Singapore are foreign-owned, yet they employ 60 per cent of residents in high-earning jobs, according to the Ministry of Manpower (MOM).

Data released on 17 September 2024 shows that these positions pay over S$12,500 per month, placing workers in the top 10 per cent of income earners.

MOM emphasized the importance of foreign investments in driving business growth and improving the local job market. In the second quarter of 2024, foreign firms employed nearly one-third of the resident workforce, underscoring their critical role in Singapore’s labour market.

These foreign-owned firms—defined as having less than 50 per cent local equity—also create opportunities for small and medium-sized enterprises (SMEs), which hire the majority of resident workers—which comprises Singaporean and Permanent Resident workers.

Dr Tan See Leng, Minister for Manpower, highlighted the impact of foreign firms in a Facebook post on 17 September: “Foreign-owned firms comprise around 20% of companies in Singapore and provide jobs for nearly one-third of employed residents. They account for a disproportionate share of higher-paying jobs—employing six in 10 residents earning a gross monthly income of above S$12,500. We will continue to invest heavily in Singaporeans while building a complementary global talent pool.”

He pointed to examples like Acronis, a Singapore-founded cybersecurity firm that upskills its workforce through Workforce Singapore’s Career Conversion Programme.

However, Dr Tan has faced repeated calls for more transparency about the proportion of new jobs allocated to Singaporeans, especially in high-paying roles.

Parliamentary Exchange on Employment of Singaporean PMETs

During a parliamentary sitting on 2 April 2024, Workers’ Party MP for Aljunied, Mr Gerald Giam, questioned Dr Tan about the allocation of new jobs, particularly for Singaporean professionals, managers, executives, and technicians (PMETs).

Mr Giam sought clarification on how many of the 88,400 jobs created in 2023, especially in PMET roles, were filled by Singaporeans.

He highlighted that non-residents accounted for 83,500 of the total new jobs. Mr Giam pressed for details on what measures MOM would take to ensure that more positions in 2024 would go to Singaporeans, particularly older workers aged 40 and above.

However, Dr Tan avoided directly answering the question on the percentage of PMET roles filled by Singaporeans. Instead, he focused on defending the increase in foreign employment, arguing that Employment Pass (EP) and S Pass holders complement rather than displace local workers.

Dr Tan clarified that of the 83,500 new non-resident jobs created in 2023, 18,700 were higher-skilled roles filled by EP and S Pass holders, while the majority—64,800—were work permit holders in sectors such as construction, which Singaporeans typically avoid.

He stated that resident employment increased by 4,900 but did not specify how many of these were PMET roles. Despite multiple attempts by Mr Giam to obtain precise figures, Dr Tan did not provide specific data on how many Singaporeans were employed in PMET roles compared to foreign workers.

Minister Deflects Specifics on PMET Employment

When Mr Giam reiterated his request for details on how many PMET jobs went to Singaporeans, Dr Tan shifted the focus to Singapore’s low unemployment rate and its position as one of the top countries in resident employment among advanced economies. He noted that Singapore’s resident employment rate of 66.2 per cent and long-term unemployment rate of 0.8 per cent were among the lowest globally.

Dr Tan explained that the influx of foreign workers was necessary to meet the demands of a growing economy, particularly in sectors facing significant talent shortages.

He argued that attracting foreign talent and investments helps businesses thrive, which in turn creates jobs for Singaporeans. However, he did not directly address Mr Giam’s core question about how many of the new PMET positions were filled by Singaporeans, leaving the matter unresolved.

Mr Giam countered that the 4,900 jobs created for residents in 2023 covered the entire workforce, not just PMET roles. He expressed concerns that the government’s extensive investments and incentives to attract multinational companies (MNCs) might disproportionately benefit foreign workers over Singaporeans.

MOM’s Focus on Foreign Talent

In his response, Dr Tan emphasized that Singapore must remain open to foreign talent to sustain economic growth, especially as the resident workforce shrinks due to demographic changes.

He rejected the notion of a “zero-sum game” between local and foreign workers, arguing that businesses need access to both local and foreign talent to remain competitive. He defended the government’s strategy of setting EP and S Pass salary benchmarks to ensure fair competition for local PMETs.

Nevertheless, Dr Tan’s refusal to provide specific data on the employment of Singaporeans in PMET roles has raised concerns about the transparency of MOM’s job allocation strategies.

Despite the government’s efforts to balance local employment with the need for foreign talent, questions persist about whether Singaporeans are benefiting proportionally from the country’s job growth.