CEO of sports car distributor Eurosports fined $210k for false trading

SINGAPORE – The chief executive of sports car distributor Eurosports Global was fined $210,000 on Sept 9 for trades he made in his firm’s shares to create the false appearance of active trading in his firm.

Goh Kim San, 69, also identified in court documents as Melvin, pleaded guilty to three charges of false trading. Sixteen other charges under the Securities and Futures Act were taken into consideration in his sentencing.

At the time of the offences between 2015 and 2018, Goh was the CEO and executive chairman of Eurosports, a company listed on the Singapore Exchange’s Catalist board.

Goh founded Eurosports in 1988, and the firm mainly distributes luxury automobiles, with related after-sales services. It is the authorised dealer of Lamborghini cars in Singapore and Indonesia.

Between 2014 and 2021, Goh used three of his personal share trading accounts with various brokerage firms and the trading accounts of three nominees – Kan Chee Gin, Fong Chee Yan and Leo Chun Kong – to trade Eurosports shares.

At the time, Eurosports was a relatively illiquid counter.

Deputy Public Prosecutors Magdalene Huang and Wong Shiau Yin said Goh disliked the appearance of inactivity in Eurosports’ share counter, likening it to a flatline in the intensive care unit.

To show trading activity, he decided to trade in his company’s shares to create “blips” in the price chart.

Goh placed buy and sell orders of Eurosports shares using his own trading accounts and the nominees’ trading accounts on 42 occasions across 22 trading days.

This was done with the nominees’ consent.

The prosecutors said Kan, a former sales manager at Euro Automobile, a Eurosports subsidiary, his long-time friend Fong and Leo, a former Eurosports customer and a friend of Goh’s, did not receive any financial benefit for allowing Goh to use their trading accounts.

Goh was eventually arrested in December 2021.

Seeking a $250,000 fine, the prosecutors said that although Goh did not directly profit from his offences, he was motivated by self-interest and personal gain.

Noting his motivation to avoid a “flatline”, the prosecutors said: “While the apparent motivation behind these offences may appear trivial, a clear and firm message must be sent to would-be or like-minded offenders: the securities market is not a playground to be exploited at will.”

Goh’s defence lawyers, Melanie Ho, Tang Shangwei and Neo Yi Ling of WongPartnership, urged the court to impose a $180,000 fine, noting that there was no evidence of any investor loss.

They said the trades caused minimal price movement, adding that the absence of sophistication, profit, price ramping and involvement of a transnational or syndicate element all point to the lower end of the sentencing spectrum.

“These proceedings have been hanging over Goh’s head for approximately four years since investigations commenced,” his lawyers said.

“The investigations and subsequent charges have taken a significant emotional and psychological toll on him. The negative publicity has also affected the company’s relationships with its investors and counterparties.”

Nadine Chua is a correspondent covering crime and court at The Straits Times.