CEO of luxury car distributor Eurosports Global fined for false share trading
Goh Kim San's lawyers said the CEO acted out of "vanity, not deception" as he disliked the sight of the flat lining of an inactive share counter.
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SINGAPORE: Over three years, the chief executive officer of listed luxury car distribution company Eurosports Global instructed others to conduct trades in the company's shares.
Goh Kim San, a 69-year-old Singaporean, was fined S$210,000 (US$166,110) by a court on Wednesday (Sep 9) for three counts of false trading.
He paid the full fine. He would have had to serve 21 months' jail in lieu of payment if he had failed to pay.
Goh, who is also known as Melvin Goh, pleaded guilty to three charges under the Securities and Futures Act for false trading. Another 16 charges were taken into consideration.
THE CASE
The court heard that Eurosports Global has been listed on the Catalist Board of the Singapore Exchange (SGX) since January 2014.
Between January 2014 and July 2021, Goh held share trading accounts with brokerage firms.
In addition to using his own trading accounts, he caused the trading accounts of three other people to be used to trade Eurosports shares.
Two of them were his friends, while one was a former sales manager at a subsidiary of Eurosports.
Goh caused buy and sell orders of Eurosports shares to be placed on 42 occasions across 22 trading days.
He knew this was likely to create a false or misleading appearance of active trading but did so to avoid making disclosures for his share purchases as CEO as he found it cumbersome.
This was on top of his dislike of the inactivity in the share counter.
The prosecution sought a total fine of S$250,000 for Goh, noting that the offences were committed over a sustained period, with cross trades occurring 31 times across 13 trading days.
While Goh did not directly profit, he was motivated by self-interest and personal gain, said Deputy Public Prosecutors Magdalene Huang and Wong Shiau Yin.
They said Goh was motivated by a desire to avoid a "flat line" on the share counter of Eurosports, as he "disliked the appearance of inactivity".
Goh was represented by Ms Melanie Ho, Mr Tang Shangwei and Ms Neo Yi Ling from WongPartnership.
They sought a fine of S$180,000 instead, saying this was Goh's first brush with the law.
HUMBLE BEGINNINGS: LAWYERS
The defence lawyers said Goh started from humble beginnings, with only an O-Level education. After that, he worked in his father's motor workshop and learned the automobile trade.
He began Eurosports in 1998, initially distributing only the Lotus brand.
The lawyers said Eurosports was a relatively illiquid counter, with the average daily traded volume of shares at the time of the offences being 447,928. This was only 0.18 per cent of the total issued shares.
They said that Goh likened the absence of trading activity to a flat line in the intensive care unit – a symbol of death.
"For the company whose listing represented the culmination of his life's work, Mr Goh wanted to create 'blips' in trading activity to avoid this 'flat line'," said the lawyers.
They said Goh was motivated by "vanity, not deception".
They added that there was a "limited scale" of market distortion and no evidence of any investor loss or any financial benefit to Goh.
The lawyers added that the proceedings have been "hanging over" Goh's head for about four years since investigations began, and this has taken a significant emotional and psychological toll on him.
Negative publicity has also affected the company's relationships with its investors and counterparties, they said.
For false trading, he could have been jailed for up to seven years, fined up to S$250,000, or both.
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