Soh Guan Cheow Anthony v PP

• Judge: See Kee Oon JC
• Judgment Date: 20 October 2016
• Court: High Court (Singapore)
• Docket Number: Magistrate's Appeals Nos 123 of 2015/01 and 123 of 2015/02
• Date: 20 October 2016

Soh Guan Cheow Anthony

and

Public Prosecutor and another appeal

[2016] SGHC 235

See Kee Oon JC

Magistrate's Appeals Nos 123 of 2015/01 and 123 of 2015/02

High Court

Criminal Procedure and Sentencing — Appeal against conviction — Accused convicted of various offences under Securities and Futures Act — Whether elements of offences made out — Sections 218(2)(b), 330(1), 140(2), 197(1)(b) and 330(2) Securities and Futures Act (Cap 289, 2006 Rev Ed)

Criminal Procedure and Sentencing — Disclosure — Witness statements voluntarily provided by Prosecution to Defence during trial — Whether Prosecution breached duty of disclosure by failing to disclose statements before trial — Whether presumption of Prosecution's compliance with duty of disclosure rebutted

Criminal Procedure and Sentencing — Sentencing — Principles — Application of one-transaction rule — Whether sentencing judge erred in exercising discretion as to which sentences to run consecutively

Criminal Procedure and Sentencing — Sentencing — Principles — Offender charged under s 140(2) Securities and Futures Act — Whether offences under s 140(2) invariably less serious than those under s 140(1) — Sections 140(1) and 140(2) Securities and Futures Act (Cap 289, 2006 Rev Ed)

Criminal Procedure and Sentencing — Sentencing — Principles — Whether dishonesty an aggravating factor when not an element of offence

Criminal Procedure and Sentencing — Sentencing — Principles — Whether foreign sentencing precedents relevant in calibrating overall sentence for securities offences

Criminal Procedure and Sentencing — Sentencing — Principles — Whether precedents involving cheating offences relevant in calibrating sentences for insider trading and take-over offences

A voluntary general offer (“VGO”) for the issued ordinary shares in Jade Technologies Holdings Ltd (“Jade”) was launched by the accused's investment vehicle, Asia Pacific Links Ltd (“APLL”). At the material time, the accused was a director and the sole shareholder of APLL as well as a director of Jade. Oversea-Chinese Banking Corporation (“OCBC”) was appointed APLL's financial adviser for the purpose of the VGO.

During the VGO period, the accused traded in a substantial number of Jade shares without informing Jade and the SGX. At the same time, the accused caused OCBC to be provided with banking documents which purported to confirm that funds in an account in Standard Chartered Bank Jakarta Branch (“SCBJ”) were available to satisfy APLL's obligations under the VGO. OCBC discovered subsequently that these documents had not been issued by SCBJ. Subsequently, the accused authorised the furnishing of a letter to the Securities Industry Council (“the SIC”) stating that he had given instructions for SCBJ to send to OCBC two banker's guarantees for a total of US$200m. The VGO was eventually withdrawn with the consent of the SIC after APLL failed to provide sufficient proof that it had the financial resources to complete the VGO.

Separately, on an occasion prior to the launch of the VGO, the accused informed Jade's company secretary that he had purchased 5,500,000 shares on that day and the latter proceeded to file a notice informing the Singapore Exchange Ltd (“the SGX”) of the same.

The accused faced the following charges under the Securities and Futures Act (Cap 289, 2006 Rev Ed) (“SFA”) and the Companies Act (Cap 50, 2006 Rev Ed) (“the CA”) for: (a) insider trading while the VGO was extant (1st to 7th charges); (b) authorising the furnishing of a false report to the SGX stating that he had purchased 5,500,000 Jade shares (eighth charge); (c) failing to notify Jade about share purchases or sales (ninth to 22nd charges); (d) failing to notify the SGX about share purchases or sales (23rd to 36th charges); (e) making a take-over offer without having reasonable grounds to believe that he or APLL had sufficient financial resources to implement that take-over (37th charge); (f) creating a false or misleading appearance as to Jade's share price (38th charge); and (g) authorising the furnishing of a false report to the SIC stating that instructions had been given to SCBJ to send to OCBC two banker's guarantees for a total of US$200m (39th charge). The accused claimed trial to 11 charges, namely, the 1st to 8th charges as well as the 37th to 39th charges.

During the trial, it surfaced during cross-examination that the Commercial Affairs Department (“CAD”) had enlisted the help of the Securities Commission of Malaysia (“MSC”) to record statements from one Abdul Rahman bin Maarip (“Rahman”) and one Isnin bin Rahim (“the MSC statements”), individuals who allegedly knew of the SCBJ account. The MSC statements were eventually furnished during the trial upon the Defence's request. The Defence took the position that the Prosecution was in breach of its duty of disclosure by failing to disclose the MSC statements earlier and on that basis, applied for the disclosure and production of all unused material except for statements made by witnesses to the CAD in the course of police investigations. The application was dismissed by the district judge (“District Judge”).

At the conclusion of the trial, the District Judge found the accused guilty of the 11 charges to which he claimed trial. After his conviction on those charges, the accused pleaded guilty to 28 other charges under the CA. The District Judge ordered the sentences for six charges, namely, the 5th, 18th and 36th to 39th charges, to run consecutively, resulting in an aggregate imprisonment term of eight years and nine months and a total fine of $50,000. In Magistrate's Appeal No 123 of 2015/01 (“MA 123/2015/01”), the accused appealed against his conviction on the 11 charges to which he claimed trial and the sentences imposed on him for the same. In his appeal, the accused renewed his application for discovery. In Magistrate's Appeal No 123 of 2015/01 (“MA 123/2015/02”), the Prosecution appealed against the individual sentences in respect of the 1st to 7th charges, 37th and 38th charges, and the aggregate term of imprisonment.

Held, dismissing MA 123/2015/01 and allowing MA 123/2015/02:

(1) The Prosecution was duty-bound to disclose to the Defence a limited amount of unused material that was exculpatory in nature, viz, material that tended to undermine the Prosecution's case or strengthen the Defence's case. Only material that was prima facie credible and relevant had to be disclosed. The Prosecution was presumed to have complied with its duty of disclosure (“presumption of compliance”) and the presumption of compliance would only be displaced if there were reasonable grounds to believe that the Prosecution had failed to comply with its duty: at [97].

(2) The MSC statements fell within the scope of the Prosecution's duty of disclosure as they were prima facie relevant and credible. The statements were relevant to the Defence given that they would to a large extent corroborate the accused's account, in particular of his reliance on Rahman's representations on the SCBJ account and his honest belief of the existence of that account. Without the benefit of the full trial process, the statements were also prima facie credible. Much of the trial judge's eventual assessment of the MSC statements involved testing the credibility of those statements against the other materials that had been placed before the court: at [101].

(3) Even if the Prosecution had breached its duty of disclosure by failing to disclose the MSC statements before trial, this breach of duty did not invite the inference that there were reasonable grounds for believing that the Prosecution had fallen short of its duty in respect of other materials. There was no basis for the Defence to demand the Prosecution to produce for the court's inspection statements and materials obtained from other witnesses. Moreover, there was no explanation as to how those materials could be exculpatory in nature: at [104].

(4) The accused had known at all material times that both he and APLL did not have the resources to perform their obligations under the VGO. First, the evidence showed that he had no reasonable grounds to believe that the funds which were allegedly in the SCBJ account could be used as collateral upon which banker's guarantees could be issued. Secondly, even if the accused did reasonably believe that the funds in the SCBJ account could be used as collateral, he did not have reasonable grounds to believe that OCBC was intending to extend a loan on the basis of the banker's guarantee(s) drawn from the SCBJ account. Further, the alleged breaches of duty by APLL's professional advisers were red herrings and completely irrelevant to these proceedings: at [110] and [139].

(5) The accused caused the VGO to be announced with the specific intention of raising or maintaining Jade's share price for his own financial gain. First, the accused was furtively offloading his Jade shares at the same time he was offering to buy up the shares of other shareholders and had applied a large part of the proceeds of these sales towards meeting his financial obligations. Secondly, his claim that he had relied on a draft report which purportedly gave a favourable estimate of coal reserves in a project by a subsidiary of Jade was untrue given that the said report did not contain any such estimate. Thirdly, the accused entered into a conditional future contract with the largest non-corporate individual shareholder in Jade in order to prevent the latter from tendering his shares under the VGO: at [145] to [147], and [149].

(6) While the VGO was extant, the accused traded in Jade shares with the knowledge that APLL had insufficient financial resources to implement the VGO. His sale of 15,000,000 shares after being told that certain banking documents had not been issued by SCBJ and after having formed the intention to withdraw the VGO was particularly egregious: at [150].

(7) The accused authorised the furnishing of a false report to SGX...