New Silkroutes Group ex-director jailed for market rigging; Prosecutors label Goh Jin Hian as ‘mastermind’

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.