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Ronald Loh The Straits Times Thursday, Aug 21, 2014
You lied. You used me. You shortchanged the faith of church members.
Chew Eng Han's explosive accusations were made bluntly and pointedly at the pastor he followed for two decades.
Facing the fire on the stand yesterday was City Harvest Church (CHC) founder Kong Hee.
Chew also told the court that when he was CHC's fund manager, he created "well-structured" and legal bond agreements for the church.
But he admitted they became "sham bonds" from the way they were used.
Chew also claimed that singer Sun Ho's successful music career was a farce and fooled many, including himself, into believing in CHC's Crossover Project.
These damning allegations by an accused come after the prosecution's case that Kong, Chew and four other CHC leaders allegedly misused more than $50 million of church money through sham bonds. (See report above.)
Some of this money was allegedly used to fund the music career of singer-pastor Sun Ho through two companies - music production firm Xtron and glass manufacturer Firna.
Yesterday, Chew continued his cross-examination of co-accused Kong, the second accused to take the stand after former board member John Lam.
Chew, who quit the church last year, went for the jugular from the start. He fired one allegation after another at his former pastor.
Within just five minutes into the hearing, Chew accused Kong of lying to the Commercial Affairs Department.
Chew is representing himself after discharging his lawyer in May.
Chew also asserted that the music success of Ho was "not real".
For example, he said she did not sing at the 2007 Special Olympics in Shanghai contrary to claims on the Crossover Project's website.
While Kong admitted Ho did not attend the sporting event, he said: "I have no reason to doubt that the song that she recorded was a song used in the Special Olympics for 2007."
Chew also presented an e-mail to the court showing that various church members, including Ho herself, had spent about $30,000 on Ho's singles using iTunes giftcards.
STAMPS WERE 'PAID FOR'
Kong replied that it was part of the marketing strategy to "create promotion and publicity on cyberspace", and that her placement on the US Billboard dance charts was not based on sales.
He added the team was at the mall in the US when they used Ho's "Visa US card" to buy some iTunes giftcards.
Chew also said that a series of stamps given by various associations in China to Ho, supposedly the first foreign celebrity to receive such an honour, were a scam.
He then sought to prove that the "First Day Cover" stamps were "nothing more than personalised stamps that anybody could go to the post office to pay for".
Kong disagreed and maintained that the stamps, along with a plaque, were authentic and given to Ho after she had done humanitarian work in China.
Said Chew: "You have shortchanged the faith of the people in City Harvest Church by telling them that Sun had hit number one on her own merits when you knew in the background money was being used to push her up."
He also said the real reason why Ho's English album was repeatedly delayed was because Kong and Ho secretly knew that her success was not real.
Kong said he "absolutely disagreed".
Chew was not done.
"You consciously kept all relevant information away from me so that you could continue to use me to help you to... arrange the necessary financing," he said.
He also told Kong: "I've been accused of being in a conspiracy with you... so that money can be channelled to fund your wife's career."
Chew maintained that he had created a set of proper, legally-documented bonds for the church to invest in.
"But it's what happened after the bond...was drawn down, how the funds were being applied that... tainted the whole bond and made it a sham bond."
Chew also told the court that he and his wife had donated and given his tithes to a multi-purpose account (MPA) that was used to pay for the Crossover Project.
Yet when Kong presented the figures at a meeting with the MPA donors, regarded as his greatest supporters, he did not include Ho's royalties and bonuses, Chew said.
The donors were told the account was in deficit and asked to contribute more, he said.
"The problem is... there was never actually a deficit in the first place. (It) came about after you... had stripped out (Ho's) royalties and balances and bonuses," said Chew.
"One of the reasons why I left your church is because when I look at this, I realise that you deceived... the people who are closest to you."
CITY HARVEST CHURCH LEADERS TRIAL
Kong: I wanted to take all responsibility
City Harvest Church (CHC) founder Kong Hee was prepared to take the rap for his fellow accused, or so he said.
The night before the second round of questioning by the Commercial Affairs Department (CAD), Kong said he prepared a letter containing his thoughts, after he was advised by a lawyer to shoulder all responsibility.
But he never did that on the day of questioning by the CAD.
Instead, he blamed me, said co-accused and former CHC fund manager Chew Eng Han in court yesterday.
Chew said he found it "very hard to believe" that days after the CAD raid, despite Kong being in fear, he was "willing to take the rap for everybody".
He added: "Somehow the letter (containing Kong's thoughts) didn't get to CAD, and (in) the subsequent interviews with the CAD, you started to point the finger at me."
CHECKED FOR CBT
Chew went on to say that Kong had asked for a board member to look through all of the church's transactions a few days before the May 2010 raid by CAD officers.
And it was specifically to check if Kong had committed criminal breach of trust, of which he is now facing three counts, said Chew.
Kong replied that he just wanted to make sure that everything the church had done was legal.
Kong also said that he was never in fear.
"I was in shock, I was worried, first for my family. I was worried for my church.
"But no, I was not in fear. I knew that God was in control, and I just trusted Him," he said.
He added that the ongoing investigations kept his wife, singer-pastor Sun Ho, in Singapore.
Chew then asked why Ho did not apply for a permit to travel back to the United States to complete preparations for her English album.
Said Kong: "Perhaps Mr Chew is emotionally a Superman who is able to juggle all the stress and still go on with life like nothing has changed.
"But for Sun, and I believe even for the church, it's not appropriate for her to go back... they wanted her to be around. And she says she couldn't travel, because she wanted to be with me."
About the case
City Harvest Church founder Kong Hee and five others are on trial for allegedly misusing church funds through sham bonds.
This includes $24 million to fund the music career of Kong's wife Sun Ho and another $26.6 million to cover up the first amount.
They are said to have done this through music production firm Xtron and glass manufacturer Firna, which are run by long-time supporters of the megachurch.
Kong, former board member John Lam, finance manager Sharon Tan, ex-investment manager Chew Eng Han, deputy senior pastor Tan Ye Peng and former finance manager Serina Wee, face varying charges of criminal breach of trust and/or falsifying accounts.
Prosecutors had sought to show how Xtron and Firna directors had simply done the bidding of the accused.
The defence has argued that the transactions were legitimate, with the accused acting "in good faith" on the advice of lawyers and auditors.
City Harvest trial: Kong listed as ‘invisible’ manager in Xtron meeting
SINGAPORE: City Harvest Church founder Kong Hee was listed as an "invisible" manager in the minutes of a meeting that laid out the management structure of Xtron Productions, while another church board member Suraj was listed as “ghost director”, the court heard on Friday (Aug 22).
The prosecution produced the minutes of the meeting in 2008, in a bid to show that Xtron was controlled by the church and being used to funnel church monies to finance the secular pop music career of Kong's wife Sun Ho.
Xtron was Ms Ho's artiste management firm at the time. It is one of the two firms accused of helping Kong and his deputies misuse church monies to bankroll the Crossover Project. The project is the church's way of evangelising through secular pop music, and fronted by Ms Ho.
In defence, Kong said he was listed because of his role in negotiating and liaising with the American producers for Ms Ho's US album. He added that he is an "invisible patron" of many organisations because of his position as a pastor.
KONG'S CONTROL OF XTRON EXTENDED TO PAY, MANPOWER DECISIONS: PROSECUTION
The prosecution also had evidence to show that his control extended to making decisions even on salary, bonuses, and manpower matters within the company. Kong insisted what he was doing was "scenario-planning" and would amount to nothing more than proposals that Xtron directors would later have to agree to and have final say on.
He said he was involved in making these proposals out of "pastoral concern" for church staff who had moved to church-linked firms - which included Xtron - to help fulfil the church's mission purposes and vision.
But the prosecution dismissed these explanations as "fabrications", saying it "makes no sense" for Kong to be doing this if he truly had no control over the salaries of these "separate entities".
Deputy Public Prosecutor Christopher Ong pointed out that it was Kong who made the almost-immediate decision to wire US$250,000 to American music producer Justin Herz, for expenses related to Ms Ho's US album.
When questioned about why the Xtron directors had not been the ones to make the decision, Kong said that they had already pre-approved this. Mr Ong charged that this was a "lie" - as it was a request for fresh funds, and Kong had dictated the amount to be wired over to Mr Herz, without seeking the approval of the Xtron directors.
SERINA WEE SET UP COMPANY TO MANAGE XTRON'S ACCOUNTS?
The court also heard that the church's former finance manager Serina Wee had devised a plan to set up an independent company called Advante to manage Xtron's accounts. The prosecution said this was done to reinforce the perception that church and Xtron were separate entities and to hide the fact that Kong and his team were about to channel building fund monies through Xtron in the form of sham bonds. Kong denied this, claiming it was Wee's dream and vision to set up her own company.
"Advante was required because if Serina was known to be handling both the church accounts and Xtron accounts, it would have it clear that the two were related," said Deputy Public Prosecutor Christopher Ong.
Kong disagreed, saying that Wee set up Advante also to avoid a conflict of interest, and that this appeared to reflect better corporate governance. But Mr Ong argued that Wee had discussed her plans for the new company, including staff salaries, with Deputy Senior Pastor and co-accused Tan Ye Peng, even though he was not a partner in the company.
CHURCH AND XTRON ARE INDEPENDENT ENTITIES, MAINTAINS KONG
The court later heard how Kong and his deputies had discussed ways for Xtron to meet its financial obligations. Mr Ong pointed to email correspondence involving Kong and his co-accused Chew Eng Han and Tan Ye Peng - in which Kong was the one who made the decision for Xtron to purchase and sell a Riverwalk Property.
Kong denied this, saying that it was Xtron director Choong Kar Weng who had made the decision. Mr Ong refuted this, saying: "All these hats, like Xtron director, Advante, Xtron, are just for show."
Kong has maintained that the church and Xtron are independent entities operating at arm's length from each other.
Earlier, Kong said that he was "disappointed" that auditor Foong Daw Ching seemed to have distanced himself from advice he had allegedly given to the accused persons about disclosing Xtron's relationship with the church to its executive members.
But the prosecution has charged that the Kong and his co-accused had not fully disclosed all the necessary information to the church's auditors. - CNA/cy
Church leaders tried to hide control over Xtron: DPP
Defendants' e-mail correspondences show bid to hide this from auditors
Published on Aug 22, 2014 9:34 AM
City Harvest founder Kong Hee said that he and the defendants had only "some control" over Xtron.
By Feng Zengkun
City Harvest founder Kong Hee and his fellow conspirators had sought to hide their control over Xtron Productions, the company which managed his wife's music career, according to Deputy Public Prosecutor Christopher Ong.
Mr Ong also said that they kept money flowing from City Harvest's coffers into Xtron, which then used it to finance Ms Ho Yeow Sun's attempt to become a pop success.
These were the points that the prosecutor tried to prove yesterday as he grilled the church founder for the third day in a row.
Growing exasperated at some points during the trial yesterday, Kong maintained that while the defendants had "some control and influence" over Xtron, the company's directors still had to approve transactions with the church.
CHC trial: Kong asked for MD title on Xtron name card, emails show
SINGAPORE: City Harvest Church founder Kong Hee had asked for name cards stating he was the managing director of Xtron Productions, it was revealed in court on Monday (Aug 25).
But his co-accused and the church's deputy senior pastor, Tan Ye Peng, told him the title - as a top position in the company - represented decision-making capabilities and this could throw up issues with related-party transactions. Tan suggested it was safer to keep Kong's title as consultant.
This was revealed in an email dated January 2006, used by the prosecution in its continuing bid to show that Xtron was a shell company controlled by the church and being used to funnel church monies to finance the secular pop music career of Kong's wife Sun Ho. Ms Ho's pop music was part of a church-approved bid to spread the Gospel and Xtron was Ms Ho's artiste management firm at the time.
Kong told the court that he had no intention of being appointed managing director of Xtron. He said that only asked for the title as he felt a senior position would help his negotiations with American music producers on Ms Ho's debut English music album.
He also maintained that the church had processes in place to ensure proper governance of its financial transactions. For example, the investment committee's duties would include drafting the church's investment policy, proposing the amount of excess funds to be invested to set targets, and periodically reviewing the church's investment portfolio. Kong added that he had relied on these "internal controls", which also included the church's management board.
Kong and Tan are among six church leaders in the dock for allegedly misusing millions of church monies.
WHO APPOINTED THE XTRON DIRECTORS?
Deputy Public Prosecutor Christopher Ong also produced several emails to show how Kong and his team were responsible for deciding who the Xtron directors would be. He pointed to a 2007 email from the church's former investment manager Chew Eng Han, who said he preferred that the church's investment in Xtron be kept to a "small circle", because of Xtron's proximity to Kong and Ms Ho.
"If one day someone turns away from CHC and becomes nasty, he may say all kinds of baseless things," he wrote in the email to his co-accused Serina Wee and John Lam. Lam was also the head of the church's investment committee at the time.
The prosecution charged that Kong and his deputies would consistently go to auditor Foong Daw Ching with an incomplete picture of the church's transactions and seek his advice, and this was because they wanted to use his responses to gauge whether its main auditor would raise any objections.
Earlier, Mr Ong charged that the directors were chosen because they were in line with the church's vision of the Crossover Project, and that they would lend an appearance of credibility to decisions made that were, in actual fact, made by Kong and his team.
Kong denied this, saying he could only nominate or suggest people for the role, and that he did not give final approval on decisions concerning the financing of Ms Ho's album.
But the prosecutor refuted this, producing an email from Kong to American music producer Justin Herz in March 2008, where Kong said the Xtron directors preferred to let money remain in stocks and bonds.
The church had already invested its monies into Xtron bonds by then.
Kong was unable to give an answer when asked by the prosecutor which Xtron director gave him this instruction, and instead said it was a "total misunderstanding" on his part.
"At this point in time, in March 2008, I was very fuzzy in my understanding of the bonds, and I did not really fully understand the whole process of it", he said, adding that he became more "educated" on how bonds worked from the middle of 2008 onwards.
Kong insisted that contrary to the prosecution's assertions, he did not have "total control" over Xtron, and said he could only nominate or suggest people for the role, and that he did not give final approval on decisions concerning the financing of Crossover Project.
He has maintained that Xtron was an independent, commercial entity operating at arm's length from the church. - CNA/cy/xk
City Harvest Trial: Kong Hee says he does not have total control over Xtron's decisions
Published on Aug 25, 2014 1:55 PM
City Harvest founder Kong Hee had asked for name cards stating that he was the "managing director" of Xtron Productions, the company that managed his wife Ho Yeow Sun's music career. -- PHOTO: ST FILE
By Feng Zengkun
SINGAPORE - City Harvest founder Kong Hee had asked for name cards stating that he was the "managing director" of Xtron Productions, the company that managed his wife Ho Yeow Sun's music career.
On Monday, the prosecution pointed to the request as further proof that Kong was in charge of the firm, contrary to his claims that he had only "some influence and control" and not total control over the firm's decisions. Kong was also named as Xtron's "invisible" manager in a document seized by the authorities from Xtron's offices.
The prosecution has been trying to show that Kong and several other church leaders were behind Xtron's decision to issue allegedly sham bonds in which City Harvest invested $13 million. The money eventually went to finance Ms Ho's planned American debut album.
Kong and five others face various charges for their part in allegedly misusing some $50 million of church funds to bankroll Ms Ho's music career, and then to cover up the deed.
Asked for his explanation about the name card request, Kong said on Monday he was not, and did not want to be, the firm's managing director. He said he had wanted the name cards only to help with budget negotiations for his wife's US album.
"I was meeting people in the industry so I wanted a senior title that carried with it a certain authority," he said. But he stressed that he handled only the budget negotiations.
Deputy Public Prosecutor Christopher Ong also showed e-mail where Kong had discussed the financing of the album with fellow defendant and City Harvest deputy senior pastor Tan Ye Peng.
Mr Ong said to Kong: "I put it to you that the Xtron directors played no role in the bonds, and you were the ones who made the final decisions for the US project."
Kong disagreed, maintaining that while he may have proposed ideas and budgets, it was up to the Xtron directors to make the decisions.
City Harvest trial: Prosecution says Xtron bonds were a sham
SINGAPORE: In the high-profile City Harvest Church trial, the prosecution sought to prove that church founder Kong Hee gave the nod for the church to invest S$13 million in Xtron bonds, despite knowing that there was no reasonable prospect of financial returns from the investment.
The prosecution is aiming to show that the bonds were a sham, and simply a vehicle for Kong and his deputies to funnel church monies into funding the secular music career of his wife Sun Ho.
Between 2003 and 2007, Ho's Asian albums and US singles led to an almost S$10 million-dollar combined net loss for Xtron Productions, her artiste management firm. The prosecution said that to inject capital into Xtron, sponsors were approached, or the church would simply buy up her CDs as "evangelical tools".
Despite this, Kong told the church's executive members in 2007 that it was investing in Xtron bonds to maximize returns. He added that the church entered into bonds not just for investment purposes, but for the secondary purpose of funding the Crossover Project - the church's way of evangelising through secular pop music, and fronted by Ms Ho.
But the prosecution charged that the church entered into a transaction that was projected to fail, unless steps were taken to extend the maturity period for the bond. "By entering into this transaction, despite knowing that there was no reasonable prospect of returns, you entered into a sham transaction," said Deputy Public Prosecutor Christopher Ong.
ALBUM SALES
Emails revealed that several of the accused persons knew that projected revenue from the sale of 200,000 copies of Ms Ho's albums would not be enough to repay the bond on its two-year maturity date. In fact, it would take 10 years to repay the bond. Nevertheless, they went ahead with the transaction. The bond was later re-issued, and the maturity period extended, under an amended bond subscription agreement.
The prosecution also charged that the auditor for the church and Xtron, Mr Sim Guan Seng, never knew about the circumstances surrounding the first Xtron bond transaction. "Don't you agree that if the church had entered into a bond which was known to be not repayable upon maturity, and that would require some kind of rolling over - that this is something that the auditors ought to have been told about?" asked Mr Ong.
Kong said he did not recall being told this, and that the church went ahead with the transaction based on projected sales of at least 1.5 million albums. He said that the church's former finance manager Serina Wee had just been "conservative" in her estimate of the 200,000 album sales. "As far as my state of mind was concerned, when the Xtron bond was executed, even though I didn't know the two-year maturity date, I had no problem believing that by the end of 2008, Xtron would be able to have commercial returns enough to pay off loans and have a net profit," he added.
KONG 'NOT SKILLED WITH FINANCIAL INSTRUMENTS'?
Kong said he left it to several of his deputies to resolve any issues before the church entered into the first bond transaction with Xtron, and one reason he did so was because he was not skilled in financial instruments.
When asked by the prosecution how it was possible that his deputies would have entered into the transaction without telling him that the bonds could not be repaid on time, Kong said: "I told them check with the lawyers, auditors, and check with the management board. And it's consistent with this idea that I left it to them to solve whatever problems that they needed to solve, and, if they cannot solve it, they would highlight to me or alert me." He added that no one had raised any red flags to him during the relevant period.
Earlier, the prosecution sought to prove that the church's fund manager AMAC Capital Partners, which was set up by co-accused Chew Eng Han, was just a tool for the church to carry out the sham transactions. It pointed to an email Kong wrote to the chuch's deputy senior pastor Tan Ye Peng, in which he wanted to offer salaries to Chew and his wife after Chew left his banking job to set up AMAC.
Kong wrote: "Can he (Chew) look for another job when he is helping us with AMAC? If he can't, in a sense, we do owe him his livelihood." Kong denied this, saying he was just trying to offer help as he was concerned that Chew was facing a "financial crunch" at the time. - CNA/xy
No record of church management approving initial bond buy, admits CHC founder Kong
Feng Zengkun The Straits Times, My PaperTuesday, Aug 26, 2014
SINGAPORE - City Harvest founder Kong Hee admitted on Tuesday that, as far as he knew, there was no record of the church's management board approving a $13 million investment into Xtron Productions, the firm that managed his wife Ho Yeow Sun's music career.
By Feng Zengkun
My Paper
SINGAPORE - They were supposed to act as checks and balances within City Harvest Church (CHC) to prevent the misuse of church funds, but the oversight committees and the management board were run by founder Kong Hee and his fellow conspirators.
Several of them had also allegedly kept information from fellow committee members not within the conspiracy, to prevent them from discovering the misuse of funds.
Deputy Public Prosecutor (DPP) Christopher Ong made those points yesterday to rubbish Kong's claim that the church's "internal control bodies", such as the audit and finance committees, would have stopped the alleged sham transactions if they were really so.
DPP Ong added that, contrary to Kong's claims that auditors and lawyers had vetted the deals, the professionals had been given "an incomplete picture" by the defendants and so could not have detected the alleged misuse.
Kong and five others face various charges for their part in allegedly misappropriating some $50 million of the church's funds to boost the music career of Kong's wife, Ho Yeow Sun, and then to cover up the misdeed.
The alleged sham transactions had taken place from 2007 to 2009. DPP Ong showed that, in 2007, Kong was president of the church's management board, while fellow defendants Tan Ye Peng and John Lam Leng Hung were treasurer and secretary, respectively. There were seven other board members.
From Sept 2006 to June 2007, a few months before the first alleged sham transaction was carried out, four of the five finance committee members were those facing charges now - Tan, Lam, Chew Eng Han and Serina Wee.
Lam was also chairman of the audit committee in 2007, while Tan and the sixth defendant, Sharon Tan, were members, said DPP Ong. He added that, in 2007 and 2008, Wee was the church finance manager until Sharon Tan took over.
DPP Ong also produced e-mail messages between Wee, Chew and Lam in 2007 to show that they had discussed hiding information from two other finance committee members. Chew, the church's investment manager at the time, had asked Wee to withhold information about the alleged sham bonds from one of them "who is not 100 per cent with CHC".
Kong disagreed with DPP Ong's statement that Lam had been helping to hide the bonds' alleged sham nature so the two members would not eventually question whether the bonds were genuine.
"Even if John failed in his corporate governance duties, it doesn't change the fact that when professionals were consulted, they didn't say the transactions had a sham nature," Kong said.
DPP Ong then pointed to a 2007 e-mail message in which Wee had asked Tan Ye Peng if money used to buy Ms Ho's CDs in Taiwan could be "not captured anywhere and we don't need to justify to the auditors".
On Kong maintaining that he and his defendants had sought auditor Foong Daw Ching's advice on the allegedly suspect transactions, DPP Ong said: "You and your co-accused would... tell (Mr Foong) an incomplete picture."
Disagreeing, Kong said the defendants had gone to Mr Foong as they wanted genuine advice. They had been "pretty detailed in what was being spelt out, the transactions, the steps", he said.
He added: "If I know that my house is dirty and that somebody is scrutinising my home, why would I invite him to come to my home and have the possibility of finding dirt? I would want to stay as far away from him as possible."
Kong told Sun Ho's album producers to plan 'as if the sky's the limit': Prosecutors
SINGAPORE: In the ongoing City Harvest Church trial, the prosecution charged that founder Kong Hee and his deputies controlled when to draw down Xtron bonds, and how these funds would be used. It said the bonds were simply a sham mechanism to tap on the church's building fund to obtain money whenever needed to finance the church's Crossover Project.
Kong and his five deputies are in the dock for allegedly using millions of the church's money to buy sham bonds. The project, fronted by Kong's wife Sun Ho, is a way of evangelising through secular pop music.
The court heard that even before the church entered into the bond transactions with Xtron - Ms Ho's artiste management firm - Kong had made decisions concerning the financing of her music career - before getting the approval of Xtron directors.
S$300,000 "UNANTICIPATED PAYMENT"
The prosecution produced a 2006 email where Kong approved a S$300,000 "unanticipated payment" to an American music producer as an example. These included expenses for a party in the Hamptons - a popular seaside resort in the US with some of the most expensive residential properties. It was estimated that this would cost between S$70,000 and S$150,000 to have a "name celebrity" host the party.
Kong admitted that there was no standing instruction that Xtron directors should be informed about the ad-hoc payment as soon as possible. He said he would usually approach his co-accused Serina Wee, who was then managing Xtron accounts about such ad-hoc payments, and she would let him know if there was any leftover in Xtron's budget for the Crossover Project.
In the case of the S$300,000, the payment was later given the green light by the Xtron directors when the budget for the next phase of the project was approved. He added that there were times he would be "scolded" by one of the directors Wahju Hanafi for "overspending the money."
The prosecution pointed out that the Xtron directors were not involved in the decision-making over what to spend the drawn down funds on, and that they were just "rubber stamps" for the expenses. Kong refuted this, saying the Xtron directors would have seen and approved a comprehensive budget.
"PLAN AS IF THE SKY'S THE LIMIT"
"The prosecution also said that Kong had not been as conservative in his budgeting for Ms Ho's US album as he had claimed. It produced emails from Kong to American music producers in which he told them to plan as if the sky was the limit, and to "spare no expense."
Deputy Public Prosecutor Christopher Ong charged that Kong's lack of consideration in budgeting in May 2008 - especially with a two-year maturity date on the Xtron bonds approaching - showed that he was "unconcerned" with repaying the bonds. This despite the knowledge that the project would now take five to seven years to break even, rather than two years as initially projected.
"Didn't you hesitate and wonder, hang on, does Xtron need to repay the bonds before that? This would be a major change in the circumstances of the project budget," asked Mr Ong. Kong denied this, saying he had not been aware of the two-year maturity date, and that the budget had been crafted with recoverability in mind.
Mr Ong refuted this, saying: "You had no consideration for whether Xtron could repay the bonds because there was no intention on the part of you, Serina (Wee), (Chew) Eng Han, (Tan) Ye Peng and John Lam, that Xtron would actually be responsible for paying the bonds." He added that the repayment of the bonds was "just another cash-flow deficit" that Kong and his deputies would solve, to keep the Crossover Project going.
NO EVIDENCE OF PERSONAL GUARANTEE
Kong has also on a number of occasions told the court that he relied on a personal guarantee from Xtron director and Indonesian businessman Wahju Hanafi, to underwrite any losses from the production of Ms Ho's album. Mr Hanfi is also a long-time member of the church.
However, the prosecution said that there was no evidence that such a guarantee existed, and that Mr Hanafi and his glassware company Firna were simply a "conduit" for funds to be channelled to the Crossover Project. It pointed to an email exchange between Mr Hanafi, Chew Eng Han, and Serina Wee dated October 2008, where Mr Hanafi asked if Firna was "only helping to pass through the money".
Chew responded: "Firna 'pays' but of course, in the end it is us, who will take care of the repayment of the bonds when it matures ... just as for the Crossover costs." Mr Ong added that when the church entered into the first bond subscription agreement with Xtron, it was "not working on the belief that Wahju Hanafi would be responsible for covering the losses if Xtron defaulted." - CNA/by
City Harvest trial: Church 'invested $13m though album unlikely to succeed'
Kong and other accused knew money would not be recouped in time: DPP
Published on Aug 27, 2014 7:15 AM
City Harvest founder Kong Hee insisted that he was not told of the discussions about the "200,000" sales projection for his wife's American album, and that he was working on an estimated sale of 1.5 million copies. -- ST PHOTO: AZIZ HUSSIN
By Feng Zengkun
City Harvest founder Kong Hee knew that his wife's American album was not going to amount to enough - with a projected sale of just 200,000 copies.
But that did not stop him and several of the other accused from "investing" $13 million of the church's money into the project, the prosecution alleged yesterday.
They went ahead and bought bonds in Xtron, which managed Ms Ho Yeow Sun's pop career, despite knowing that too few albums would be sold for the church to recoup its money in time, the court was told.
"You knew... there was no reasonable prospect of success... Nevertheless, you and (several other defendants) went ahead with this (purchase of bonds)," Deputy Public Prosecutor Christopher Ong put to Kong.
"By entering into this transaction... you entered into a sham."
If just 200,000 albums were sold, Xtron would take 10 years to repay the money, instead of the two years as required by the bond agreement, he added.
The pastor, however, insisted that he was not told of the discussions about the "200,000" projection and was working on an estimated sale of 1.5 million copies of his wife's album.
Since the prosecution began its cross-examination of Kong on Tuesday last week, DPP Ong has tried to establish several key points.
One was that Kong oversaw the production of Ms Ho's album in the United States and how much was being spent on it.
Another was that the 50-year-old, along with his deputies, controlled the strings at church-linked companies such as Xtron, which was set up to disguise the church's financing of Ms Ho's music career.
Yesterday, DPP Ong got Kong to concede that there was no record of the church's management board approving the purchase of the Xtron bonds. He also pointed to statements given by deputy senior pastor Tan Ye Peng and former church investment manager Chew Eng Han to the Commercial Affairs Department.
In these statements, both said that Kong knew of the 200,000 figure, which Xtron accountant Serina Wee had put forward.
Chew went so far as to say that the estimate had "probably" come from Kong himself.
DPP Ong suggested to Kong that Chew was right on this. "We have heard many times... that you were the one liaising with (American music producer) Justin Herz on the budget projections.
"So the source of information about budget projections, including expense and album sales, would be you, correct?"
Kong agreed that he was the "main liaison", but insisted that he knew nothing of the 200,000 figure. He pointed out that he was not included in an e-mail where Chew, Tan and Wee - who were all in the courtroom yesterday - discussed the projected album sales before Xtron issued its bonds in 2007.
He said he was also not a party to other e-mail in which the trio discussed how Xtron could take a 10-year loan to pay the church back, or in which Chew suggested issuing more bonds.
Kong also claimed that, as far as he knew, his wife's album was projected to sell at least 1.5 million copies. This also did not take into account revenue from tours and licensing, he said.
He added that he did not know how Wee came up with the 200,000 estimate. "My guess is that she was doing an ultra-conservative projection."
Xtron was 'shell company' controlled by Kong: Prosecutors
SINGAPORE: In the ongoing City Harvest Church trial, the prosecution has alleged that founder Kong Hee and his deputies manipulated transactions between the church and Xtron Productions, to ensure Xtron was able to meet its financial obligations.
It is the prosecution's case that Xtron was a shell company controlled by Kong, used to channel church monies in the form of sham bonds to finance the secular music career of Kong's wife, Sun Ho. Xtron was the artiste management firm for Ms Ho.
SOLVING XTRON'S CASHFLOW DEFICITS
The prosecution said the accused discussed how to move money "from the right hand to the left hand" to solve Xtron's cashflow deficits. For example, upping retainer fees the church paid to Xtron when it suffered a loss of income in another area.
The church had proposed upping the retainer fees it paid to Xtron, to "cover up" a decrease in the rental income Xtron would earn from the church on its Riverwalk property. "Doesn't it suggest that whatever savings were being made from the reduced Riverwalk rental were actually being put back into Xtron by way of the increased retainer?" asked Deputy Public Prosecutor (DPP) Christopher Ong. But Kong denied this, saying that even with the increased retainer, the fees charged by Xtron were "still within the bounds of reason" and "commercially justifiable".
It also produced emails to show how some of the accused had devised ways to inject funds into Xtron. One example was using money from the drawdown of the bonds to help pay the S$4 million in bond interest owed to the church.
"So Xtron was going to borrow more money from CHC, to pay CHC interest, according to this plan," said DPP Ong. Kong said this was proposed with the view that Ms Ho's album would yield profits when launched. "Ultimately the album profit will be sufficient to pay off all the principal and interest of the bonds," he added.
XTRON'S FINANCIAL PROPOSALS NEEDED HIS APPROVAL, ADMITS KONG
The prosecutor questioned Kong as to why it was his team members planning how Xtron would repay the bond interest, to which Kong replied: "I think we've established from Day One that myself, the leader of the Crossover Project, Pastor Tan (Ye Peng), and Serina Wee, we were partners working with Xtron's management ... and we work together in partnership with them for the Crossover Project, especially the US album production."
Kong emphasised that the church worked as "partners" within the scope of what the Xtron directors knew and allowed. But he admitted that proposals for how Xtron would meet its financial obligations would not "start to move ahead" without his approval.
Kong said his team would run plans past him, as he was the senior pastor and leader of the church. But he qualified that the plans would have to "ultimately" pass muster with professionals like lawyers and auditors, and then be finally approved by the relevant boards or directors.
The prosecution said that the reason Kong's deputies kept him updated on plans for how the bonds and the interest would be repaid was because this was a problem they had created by entering into the sham transactions in the first place."
City Harvest trial: Kong 'did not care' about recovering church loan
He allowed loan of money for wife's pop career but didn't track repayment: DPP
Published on Aug 28, 2014 6:58 AM
Kong said Xtron directors had the final say on the overall budget for Ms Ho's planned US debut album.
By Feng Zengkun
When $300,000 was needed for, among other things, a party in the upmarket Hamptons area in New York to promote his wife's music career, City Harvest founder Kong Hee gave the go ahead.
But when it came to keeping tabs on how to repay the church loan that helped pay for it, Kong admitted in court yesterday that he lacked full knowledge.
He did not, for instance, realise Xtron Productions, which managed his wife Ho Yeow Sun's pop career, had just two years to repay the $13 million it borrowed from the church.
He also did not know that his deputy John Lam Leng Hung, the church's then investment committee chairman, failed to vet the loan to ensure the church's interests were protected.
All this showed how little Kong cared about how the church would get its money back, even as he was planning to spend it on his wife's singing career, Deputy Public Prosecutor Christopher Ong said yesterday.
"Let me be clear," said Mr Ong. "You didn't care about having to repay (the money)."
Lam had called a meeting to assess if amending the loan's terms would enable the church to recover its money only almost a year after the loan was finalised, when auditors started asking questions, said Mr Ong.
He added that the meeting's minutes were then backdated to make it seem as if the due diligence was done before the auditors raised their concerns.
Mr Ong also argued Kong was in control of Xtron.
Kong said none of this was true, and that he trusted his deputies to do the right things.
He said: "I trust my team. I trust John and that he wouldn't do anything deceptive... I don't believe he would do anything to deceive the auditor."
Kong, Lam and four others face various charges for their part in allegedly misusing some $50 million of church funds to boost Ms Ho's career, and then covering up the alleged misuse.
Kong said while he was only generally aware of the terms for the $13 million loan, he relied on others more involved in the transaction to alert him to any problems.
He denied he was in charge of Xtron, insisting its directors had the final say on the overall budget for Ms Ho's planned United States debut album, which the church loan had helped finance.
For his part, he said he had been careful in his budgeting of the album. Relying on projections that it would sell at least 1.5 million copies, he believed Xtron would eventually be able to repay the church. "At the end of the day, there was always recoverability intended, genuine recoverability that was projected by top professionals from America," Kong said.
Another key reason for his confidence, he said, was the guarantee given by long-time church member and Indonesian businessman Wahju Hanafi to underwrite losses from the church's Crossover Project, which used Ms Ho's secular music to evangelise.
Kong said Mr Hanafi gave him a verbal guarantee in 2002, and then put it in writing in 2010.
But Mr Ong argued that the verbal agreement was not included in the Xtron bond contract, or in the minutes of the meeting to discuss the loan. He also produced e-mail to show that Mr Hanafi himself faced financial trouble during the loan period.
But Kong said he was not concerned by this: Like "most millionaires I have met, (Mr Hanafi) is asset-rich and cash-poor... in my limited exposure to millionaires".
City Harvest Church financial oversight teams 'part of conspiracy'
Feng Zengkun The Straits Times Thursday, Aug 28, 2014
CITY HARVEST TRIAL
They were supposed to act as checks and balances within City Harvest Church to prevent the misuse of church funds, but the oversight committees and the management board were run by founder Kong Hee and his alleged fellow conspirators.
Several of them had also kept information from fellow committee members not within the conspiracy, to prevent them from discovering the misuse of funds.
Deputy Public Prosecutor Christopher Ong made these points yesterday to rubbish Kong's claim that the church's "internal control bodies", such as the audit and finance committees, would have stopped the alleged sham transactions if they were really so.
Mr Ong added that, contrary to Kong's claims that auditors and lawyers had vetted the deals, the professionals had been given "an incomplete picture" by the defendants and therefore could not have detected the alleged misuse of funds.
Kong and five others face various charges for their part in allegedly misappropriating some $50 million of the church's funds to boost the music career of Kong's wife, Ms Ho Yeow Sun, and then covering up the misdeed.
The alleged sham transactions had taken place from 2007 to 2009.
Mr Ong showed that in 2007, Kong himself was president of the church's management board, while fellow defendants Tan Ye Peng and John Lam Leng Hung were treasurer and secretary, respectively.
There were seven other board members.
From September 2006 to June 2007, a few months before the first alleged sham transaction was carried out, four of the five finance committee members were those facing charges now.
They are Tan, Lam, Chew Eng Han and Serina Wee.
Lam was also chairman of the audit committee in 2007, while Tan and the sixth defendant, Sharon Tan, were members, said Mr Ong.
He added that in 2007 and 2008, Wee was the church finance manager until Sharon Tan took over.
Mr Ong also produced e-mail between Wee, Chew and Lam in 2007 to show that they had discussed hiding information from two other finance committee members.
Chew, the church's investment manager at the time, had asked Wee to withhold information about the alleged sham bonds from one of them "who is not 100 per cent with CHC".
Kong disagreed with Mr Ong's statement that Lam had been helping to hide the bonds' alleged sham nature so that the two members would not eventually question whether the bonds were genuine.
"Even if John failed in his corporate governance duties, it doesn't change the fact that when professionals were consulted, they didn't say the transactions had a sham nature," Kong said.
Mr Ong then pointed to a 2007 e-mail where Wee had asked Tan Ye Peng if money used to buy Ms Ho's CDs in Taiwan could be "not captured anywhere and we don't need to justify to the auditors".
On Kong maintaining that he and his defendants had sought auditor Foong Daw Ching's advice on the allegedly suspect transactions, Mr Ong said: "You and your co-accused would... tell (Mr Foong) an incomplete picture."
Disagreeing, Kong said the defendants had gone to Mr Foong as they wanted genuine advice.
They had been "pretty detailed in what was being spelt out, the transactions, the steps", he said.
He added: "If I know that my house is dirty and that somebody is scrutinising my home, why would I invite him to come to my home and have the possibility of finding dirt?
"I would want to stay as far away from him as possible."
He had claimed he was only helping out with liaisons and negotiations.
Why then did City Harvest Church (CHC) founder Kong Hee ask for the title of managing director to be printed on his Xtron namecard? The prosecution yesterday argued that it showed Kong's control of the music production firm.
And that Xtron was a "shell company" used by Kong, Tan and four other CHC leaders for the funnelling of the megachurch's building fund.
Deputy Public Prosecutor Christopher Ong presented an e-mail sent in 2006 by Kong, who had asked then if his namecard could bear the title of managing director.
The prosecution team said the title meant decision-making capabilities - something that Kong claimed he did not have with the firm. Kong's request prompted his deputy, Tan Ye Peng, to dissuade him, saying it would cause issues with "related-party transactions". So why did he want the title?
Kong said it was to give him more credence for negotiations with the Americans on his wife's English album.
Kong had maintained throughout the proceedings that he only had "some control" and "some influence" over the firm. He also said yesterday that he was not, and did not want to be Xtron's managing director.
"I didn't work in the corporate world, so I guess as a pastor I was just ignorant when it comes to positions and titles," he said.
Mr Ong replied: "You have consistently told us... you have always been very conscious of the importance of directors (and) that decisions must be made by the directors of Xtron. So how could you possibly think that it's not a big deal?"
Mr Ong also presented other e-mails and said Kong had placed various church members in key positions in Xtron.
Kong disagreed and said he merely "nominated" them.
"It's up to them to decide if they want to be directors," he said.
WITHHELD INFORMATION
The prosecution is cross-examining Kong, who is the second accused to take the stand after former board member John Lam. Yesterday the prosecution also asserted that Kong and his co-accused had withheld information from auditors and their own committee members.
For example, Lam had said in an e-mail that he was doubtful of fellow investment committee member Charlie Lay and asked "to test him out while it's still early".
Said Mr Ong: "By keeping information about the bonds and about Xtron from his own investment committee members...(it would) avoid the possibility that they might ask more questions and eventually question the genuineness of the bonds."
It was the same for CHC's adviser, auditor Foong Daw Ching, said Mr Ong.
"You and your co-accused... would consistently go to Brother Foong, tell him an incomplete picture of what was going on between the church and Xtron... and you would use his responses to gauge ... whether the (auditor) would raise issues at the end of the year." Kong disagreed on both occasions.
The six accused are on trial for allegedly misusing more than $50 million of church funds.
Some of this money was allegedly used to fund the music career of Kong's wife, singer Sun Ho. (See report below.)
The trial continues today.
ABOUT THE CASE
City Harvest Church founder Kong Hee and five others are on trial for allegedly misusing church funds through sham bonds.
This includes $24 million to fund the music career of Kong's wife Sun Ho, and another $26.6 million to cover up the first amount.
They are said to have done this through music production firm Xtron and glass manufacturer Firna, which are run by long-time supporters of the megachurch.
Kong, former board member John Lam, finance manager Sharon Tan, ex-investment manager Chew Eng Han, deputy senior pastor Tan Ye Peng and former finance manager Serina Wee face charges of criminal breach of trust and/or falsifying accounts. Prosecutors had sought to show how Xtron and Firna directors had simply done the bidding of the accused.
The defence has argued that the transactions were legitimate, with the accused acting "in good faith" on the advice of lawyers and auditors.
CHC board never told S$13m of bonds were for funding Crossover Project: Prosecution
SINGAPORE: Prosecutors have charged that the six City Harvest Church leaders accused of misusing church monies "intentionally deceived" the management board and its executive members. They alleged that this was done by deliberately concealing information about the bond transactions to disguise the fact that they channelled money from the church's building fund.
The prosecution said the church board and its members were never told that the S$13 million in Xtron bonds were meant to finance the church's Crossover Project. The project is the church's way of evangelising through secular pop music, and is fronted by Kong's wife Sun Ho. Xtron was Ms Ho's artiste management firm at the time.
Kong said his team may not have shared the information about the bond proceeds being used to finance the Crossover Project because they did not see a need to. He said he would have if he knew of any "legal obligations" to do so, adding that "whether we share it or we didn't share it, all financial transactions between City Harvest Church and Xtron must be legal and legitimate".
The prosecution added that Kong and his deputies had also hidden from the church board and executive members the true purpose of a S$21.5 million amended bond subscription agreement, which the church entered into with Xtron in 2008. This was a way to buy Xtron more time to repay the bonds, and to cover up the fact that the original S$13 million had already been spent on the Crossover Project, the prosecution charged.
Prosecutors said the church board and members were given the false impression that Xtron would use the entire bond proceeds from the amended agreement to buy a Riverwalk property that would then be leased to the church.
In reality, because the S$13 million had already been spent, Xtron only received a fresh injection of S$8.5 million from the church. That meant it had to take a loan for the remainder of the purchase price of the Riverwalk property.
The prosecution then pointed to an email from Mr Roland Wee - brother of the church's former finance manager and accused Serina Wee - as evidence of how the church had been kept in the dark about this even up till 2010. Mr Wee had highlighted some concerns about Xtron's financials, which Serina Wee then forwarded to her co-accused - deputy senior pastor Tan Ye Peng, and the church's former investment manager Chew Eng Han - saying: "I couldn't tell him that Xtron Productions had taken a bank loan for the Riverwalk purchase."
The prosecution also turned to the church's investment in bonds issued by Firna - a glassware company owned by Indonesian businessman and longtime church member Wahju Hanafi. It charged that the Firna bonds were - like the Xtron bonds - a sham to channel the church's building fund monies to finance the Crossover Project, and that Mr Hanafi was simply acting as a "conduit".
Deputy Public Prosecutor Christopher Ong charged that it was Kong and his team who controlled the drawdown of the bonds and how the proceeds would be used. Mr Ong pointed to the emails which he said reflected Kong's frustration with the delay in his instructions regarding various payments being carried out. "Mr Hanafi had no control over the proceeds of the bonds, except for the parts that were allocated for his own use," he charged.
Kong refuted this, saying the funds had been "earmarked" by Mr Hanafi under the Firna bonds, to be used for the Crossover Project: "Wahju had pledged them for the Crossover album production and that's why we held him accountable to the commitment." He added that the Firna bonds were not a sham and that its structure would never have been carried out without the sanction of lawyers and auditors.
The hearing will be resuming on Sep 8, when Kong will continue to be cross-examined. After that, his co-accused and the church's finance manager Sharon Tan is expected to take the stand. - CNA/xy
City Harvest trial: $2m to Xtron for was 'legitimate services', says Kong
Pastor denies church money was slated to help music firm pay off loans
Published on Aug 29, 2014 9:44 AM
The prosecution says Kong Hee (above), Sharon Tan, Tan Ye Peng and Serina Wee were involved in e-mail discussions about how Xtron could meet its loan obligations, even though none of them belonged on its management.
By Feng Zengkun
City Harvest founder Kong Hee insisted that there was nothing fishy about plans to pay Xtron $2 million of the church's money to fund, among other things, a promotion blitz for the American album of his wife, Ms Ho Sun Yeow.
But the prosecution suggested yesterday that this was just one of several schemes hatched by Kong and his deputies in a bid to use church funds to help the production firm pay its debts.
"We have, in fact, seen how... retainers would be adjusted, rental increased or expenses re-allocated to ensure that Xtron's cash flow was solved," Deputy Public Prosecutor Christopher Ong put it to Kong during cross-examination.
The senior pastor and five others face various charges for their part in allegedly misusing some $50 million of church funds to boost Ms Ho's music career and to cover up the misdeed.
City Harvest Trial: Serina Wee 'deceived brother about church business', says prosecution
She hid information on church finances: Prosecution
Published on Aug 30, 2014 8:52 AM
Former Xtron accountant Serina Wee. -- ST PHOTO: WONG KWAI CHOW
By Feng Zengkun
Former Xtron accountant Serina Wee deceived her own brother to hide what was really happening between her firm and City Harvest Church.
After church member Roland Wee asked her where Xtron's money came from, his sister wrote to two church leaders to warn that others may also start asking similar questions.
"He can see from the business profile search that Xtron has $6,000,006 share capital. Where did the money come from? This is a question anyone looking at the accounts will ask," Wee said in the 2010 e-mail to the church's deputy senior pastor Tan Ye Peng and its fund manager Chew Eng Han.
"I couldn't tell him that Xtron had taken a ($10.7 million) bank loan for the Riverwalk purchase and (the share capital) was what the bank wanted... so I just told him it was from the shareholders."
Background story
KEEPING SECRETS
He can see from the business profile search that Xtron has $6,000,006 share capital. Where did the money come from? This is a question anyone looking at the accounts will ask. I couldn't tell him that Xtron had taken a ($10.7 million) bank loan for the Riverwalk purchase and (the share capital) was what the bank wanted... so I just told him it was from the shareholders.
- Former Xtron accountant Serina Wee, in a 2010 e-mail to City Harvest Church's deputy senior pastor Tan Ye Peng and its fund manager Chew Eng Han
Even Serina Wee's brother was kept in the dark about her work.
In an e-mail presented by the prosecution yesterday, Wee said her brother, who was also a City Harvest Church (CHC) member, had highlighted concerns regarding the megachurch's transactions in March 2010.
This e-mail was shown to CHC founder Kong Hee during his cross-examination yesterday.
In the e-mail, Wee said her brother had asked how Xtron Productions, a music production firm she provided accounting services to, could have $6 million in capital.
"I couldn't tell him that XPL had taken a bank loan for the Riverwalk (property) purchase... so I told him it was from the shareholders," Wee said in the e-mail.
Kong then admitted during the cross-examination that the $10.7 million bank loan, which was granted in 2008 so that Xtron could buy the Riverwalk property for the church, was not revealed to church members or its board.
Instead, they were told the property was paid for using the bond money that CHC had invested with Xtron.
Deputy Public Prosecutor Christopher Ong then asserted that Kong and his co-accused had "deceived the board and executive members".
Said Mr Ong: "I put it to you that the reason you wanted to avoid disclosure of the Xtron bonds was because disclosure might lead to them being revealed as shams."
Kong said he disagreed.
ON TRIAL
Kong, Wee and four others are on trial for allegedly misusing more than $50 million of church funds.
Some of this money was allegedly used to fund the music career of Kong's wife, Ms Ho Yeow Sun, through two "shell companies" - Xtron and glass manufacturer Firna.
Mr Ong also pointed out in another e-mail that Firna's chief financial officer (CFO) did not know of the full details of the bonds that the firm signed with CHC. When asked if he was "surprised", Kong said he could not comment on the knowledge of Firna's CFO.
Kong tried to wipe out links between City Harvest and Xtron: Prosecution
SINGAPORE: The trial of the six City Harvest Church leaders resumed on Monday (Sep 8), with prosecutors charging that founder Kong Hee and several of his deputies had attempted to wipe out any link between the church and Xtron Productions. This was to avoid questions from the authorities about the transactions between the two entities, they said.
But Kong said there was nothing sinister about what they had done, and they had only wanted to avoid any misconceptions by the authorities. He is one of six leaders accused of misusing church monies to buy sham bonds in two firms - Xtron and Firna - to bankroll the secular pop music career of Kong's wife, Sun Ho.
Kong said the church's relationship with Xtron was thrust into the spotlight in 2010, after it acquired a stake in Suntec Convention Centre. Speculation was rife online about church funds being siphoned into Xtron, and that the church leaders had benefited from this.
Kong cited a blogger known only as John Lim, who wrote that he wanted to expose the wrongdoings in Xtron. "He was insinuating that church funds were being siphoned into Xtron, and somehow we were benefiting from it, or there was some corruption involved," said Kong, emphasising that the church's money had been invested in legitimate Xtron bonds.
However, it is the prosecution's case that Xtron - which was Ms Ho's artiste management firm - was simply a shell company used by the accused to funnel church monies to finance Ms Ho's music career.
Kong added that this was why there was a need for both entities to start on a "clean slate". For this to happen, some transactions, which included expenses Xtron incurred from Ms Ho's album production, would have to be cleared up. Xtron would also have to repay advance rental fees it received from the church.
"I believe to clear off the Advance Rental License Agreement (ARLA), we would need Wahju to make good the album expenses," said Kong, referring to Indonesian businessman and longtime church member Wahju Hanafi - who he claimed had given a personal guarantee to make good the album expenses totalling some S$30 million.
This prompted the prosecution to question why, if there was indeed such a guarantee, Kong had asked Mr Hanafi for a loan to cover Ms Ho's US album expenses, with the promise that some of it would be returned.
Following several prompts by the prosecution and an accusation that he was being "evasive", Kong replied that it was a "big financial burden" and that he and his deputies wanted to shoulder it together with Mr Hanafi. "He was a man of means, he had to take loans because he has invested his money into his business. And he had his other commitments as well. So while Wahju was willing to make good his guarantee to support us, or support the album cost, at the same time we wanted to help because this is also our mission," he said.
The prosecution disputed Kong's claims. “The reason why you were trying to sweep the transactions with Xtron under the carpet is because that's what you do if your house is dirty and a visitor might be turning up unexpectedly," said Deputy Public Prosecutor Christopher Ong. - CNA
City Harvest trial: Kong Hee tried to hide Xtron-church links, says prosecution
Published on Sep 9, 2014 8:51 AM
City Harvest founder Kong Hee said he tried to pay off the cost of his wife's music album as he was trying to avoid any "misperception".
By Joyce Lim
City Harvest founder Kong Hee wanted to hide the church's transactions with Xtron to avoid questions from the authorities, the prosecution said yesterday.
"The reason you were trying to sweep the transactions with Xtron under the carpet is because that's what you do if your house is dirty and a visitor might be turning up unexpectedly, correct?" asked Deputy Public Prosecutor Christopher Ong, as the trial resumed with Kong continuing to be cross-examined.
The prosecution argues that the senior pastor did not want Xtron to be linked to the church.
Kong, together with five others, faces various charges of allegedly misusing some $50 million of church funds to boost his wife Ho Yeow Sun's music career and cover up the alleged misuse.
Updated: 09/09/2014 21:50 | By Channel NewsAsia
Kong engaged in "lies and deceptions" to hide misuse of funds: Prosecution
SINGAPORE: City Harvest Church founder Kong Hee engaged in "a series of lies and deceptions" over the years in order to "conceal and facilitate" the misuse of monies from the church's Building Fund, charged the prosecution as it wrapped up its cross-examination on Tuesday (Sep 9).
These monies were allegedly used to buy sham bonds in two church-linked companies - Xtron Productions and Firna - to finance the church's Crossover Project, which was the church's way of evangelising through secular pop music, and fronted by Kong's wife Sun Ho.
While on the stand, Kong maintained that he relied heavily on a verbal personal guarantee given by Indonesian businessman and church member Wahju Hanafi in 2002, in which the latter promised to underwrite all expenses from the project.
But the prosecution alleged that this was just one area where Kong had consistently lied, and that there was no such a promise, as Mr Hanafi's supposed personal guarantee was only signed in 2010. It was also backdated to 2007 - before the Xtron bonds were drawn down.
The prosecution accused Kong and his deputies of using Mr Hanafi and his alleged "personal guarantee" as a conduit for funds - that had been taken out to fund the Crossover Project - to be returned to the church.
Kong and several of his deputies, such as Deputy Senior Pastor Tan Ye Peng, and the church's former investment manager Chew Eng Han, had also signed a guarantee pledging to help Mr Hanafi out if he ran into financial difficulties.
Kong said he agreed to sign the "back-to-back" guarantee as the Crossover Project was also part of the church's mission. "What was told to me at the material time was that Wahju is going to make good the album expenses, we are all in the same family, we are all brothers together," he said. "Should we all just encourage him to let him know that we are standing together with him, and if need be we will also provide financial support? And with that, I say 'yes'."
The prosecution refuted this, charging that Kong and his deputies had signed the guarantee as Mr Hanafi needed the security of knowing he would not be saddled with any debts, since he was simply allowing his name to be used as a guarantor for the Crossover Project.
Deputy Public Prosecutor Christopher Ong also pointed out that Kong and his deputies knew Mr Hanafi did not have the means to make good on the personal guarantee at the time he signed it, and that they had "scrambled" to source loans to meet the payment so as to "create the semblance that Wahju was making good on his guarantee".
Kong denied that the sourcing of funds was intended to create such an impression. "Wahju was willing to take a loan to be liable. Others were lending money to him, and he was liable for those loans as well. But we wanted to help, and we, too, were helping him to get the loans so that he could make good his guarantee to make up for the album expense." he told the court. - CNA/xy
