CHC trial: Ex-Xtron chief gave up to S$1.5m a year to support Sun Ho (Today, 31 August 2013)

SINGAPORE — He had caught a concert by Ms Ho Yeow Sun here in 2001 or 2002, and was touched by its power to evangelise.

Indonesian businessman Wahju Hanafi then told City Harvest Church co-founder and Ms Ho’s husband Kong Hee that he wanted to sponsor the “singing mission”, also known as the Crossover Project. The company Xtron Productions was set up “for Sun Ho” in 2003, said Mr Wahju, 53, who testified in court yesterday as the prosecution’s seventh witness.

There was palpable excitement in the courtroom as Papua New Guinea-based Mr Wahju — a former Xtron Director and major supporter of the church’s Crossover Project — took the stand just after 3pm.

When the trial continues next week, the prosecution is expected to examine his role and knowledge of Xtron’s alleged sham bond transactions orchestrated by five church leaders and a former leader.
The six in the dock — Kong, Tan Ye Peng, Chew Eng Han (who has left the church), Serina Wee Gek Yin, John Lam Leng Hung and Sharon Tan Shao Yuen — are accused of misappropriating S$24 million of church funds into sham bonds issued by Xtron and Mr Wahju’s Indonesian company, PT The First National Glassware (Firna). They are also accused of misappropriating another S$26.6 million to cover up the first amount.

Mr Wahju began attending City Harvest Church in 1990 when he moved his family to Singapore. It was in 1998 that he became closer to Kong. He also began applying “simple principles” of hard work and integrity to work and paid up US$1.5 million (S$1.9 million) in taxes he had evaded in Papua New Guinea. That same year, his business reaped US$10 million in profits, and he made his first S$1 million donation to the church. Kong invited him for dinner to thank him.

When Xtron was set up in 2003 by Chew, Lam and Chew’s wife, Mr Wahju was invited to “come in” as a sponsor.

Mr Wahju gave S$1 million to S$1.5 million yearly to the Crossover but, in 2007, the funds needed for Ms Ho’s career started to go “beyond (his) limit”. That year, he had taken on a US$50 million debt and taken over Firna from his father-in-law. He asked to step down as Xtron Director; the company had to seek other sources of funding and issued S$13 million of bonds to the church.
Mr Wahju said that, among the six accused, he was closest to Kong, followed by Tan Ye Peng, Chew and Lam. He co-owns a Sentosa penthouse with Kong, each making about S$17,000 in monthly payments for it.

He told the court that he worked with Lam mainly when Firna issued bonds to the church — under the subscription agreement, the church trustees could convert the bonds into 40 per cent of Firna’s issued shares and sell the shares back to Firna for US$1.

A letter dated Oct 7, 2008, stating these details to Mr Wahju and his father-in-law, was signed by Lam. The church transferred S$11 million to Firna under the agreement in 2008 and 2009.

Secret letter casts doubt on validity of $11m bond deal with Hanafi's company (BT, 31 August 2013)

Issued by CHC to Hanafi, it says that in event bonds are converted to shares, CHC will sell them back at a nominal sum of $1

[Singapore] A SECRET agreement between Indonesian businessman Wahju Hanafi and City Harvest Church (CHC), produced by the prosecution yesterday, called into question the validity of an $11-million convertible bond issue Mr Hanafi's company made to the church in 2008.

The court was shown a confidential letter, on a CHC letterhead, addressed to Mr Hanafi and his father-in-law, Tjandra Kusuma - who both own The First National Glassware (Firna), a family business based in Indonesia.

The letter, dated Oct 7, 2008, refers to the convertible bond agreement signed between Firna and AMAC Capital Partners, the investment vehicle run by former CHC board member Chew Eng Han, dated the same day. Under the bond agreement, Firna was to issue up to $24.5 million in bonds to CHC; and the church, via its trustees, would be entitled to convert the bonds issued into shares in Firna, amounting to 40 per cent of Firna's issued capital.

Eventually, $11 million was transferred from CHC's Building Fund to Firna for its bond issue, in five tranches from Oct 8, 2008, to June 22, 2009.

It is the prosecution's case that, under the guise of this purported investment in Firna bonds, the $11 million of Building Fund monies was dishonestly misappropriated - the bulk of it to fund Sun Ho's music career, and the rest for use by Mr Hanafi.

The confidential letter appeared to support its case; signed by CHC board member John Lam, the letter says, "I hereby confirm, on behalf of the management board of City Harvest Church, that in the event the bonds are converted to shares in your company (Firna), City Harvest Church will undertake to sell back those shares to yourselves at a nominal value of US$1."

When asked about this letter, Jeffrey Cheong - one of the three trustees of the church entitled to convert the Firna bonds into shares, and a witness on the stand yesterday - said he was not consulted about the drafting of this letter.

In fact, he said, that prior to assisting the Commercial Affairs Department (CAD) with its investigations in this case, he had never even seen the letter.

Yesterday's court session also saw the much-awaited appearance of Mr Hanafi himself, whose name has been mentioned countless times during the hearing.

Mr Hanafi - who, in addition to Firna, runs a chain of supermarkets in Papua New Guinea and businesses in Indonesia and Singapore - admitted to the difficulties the frequent mentions have caused him.

"Since the case came up, I've been mocked on the Internet by people calling me 'biggest suckers, biggest crooks, biggest whatever it is'. I came to know this when all my bankers (started) calling back all my loans. People started to doubt my reputation," the 53-year-old told the court.

"The biggest challenge for me (was) when they (the six accused church members) were charged in June (last year). I had a $62 million deal with a French company that was supposed to buy Firna, and that deal was cancelled on the same night the newspaper (report) came (out)," he said.

Mr Hanafi, who will take the stand for a few more days next week, spent much of yesterday being asked by the prosecution about his background.

He talked about how he lost "everything" - later explained to be US$2 million he put in private banking accounts in Singapore and Hong Kong - in the 2008 global financial crisis. "But God is good. I had my last $100,000, which I gave to the church, and that same year, my (supermarket business, Super Value Stores) actually made a record profit of about $26 million," he said.

He talked about how CHC turned his life around when, in 1990, he relocated his family from Indonesia to Singapore. "I enjoy very much the teaching of Pastor Kong (Hee). When I came to church, I was just a shopkeeper, working for my brother-in-law.

"In 1998, when I had (been in) business for 10 years, one of the (CHC) pastors rebuked me (and told me) to do business (with) integrity . . . I realised that I was not honest with my tax . . . I'd been evading (taxes) for 10 years in Papua New Guinea, and I paid them all in 1998 . . . That was the biggest turnaround in my life . . . That year I was really blessed. I had a profit of almost $10 million after paying that $1.5 million tax," he said.

Mr Hanafi told the court he now owns five to six properties in Singapore, all managed by his wife, one of which is the Ocean Front @ Sentosa Cove penthouse he co-owns with Kong.

He said he enjoys a good relationship with all the pastors in CHC, and that they "honour and look after each other". He said the pastors often refer to him as an "elder" of the church. He also said he looks up to Chew "as my adviser".

He said the church invited him to become a director and a sponsor when they set up Xtron Productions, which managed Ms Ho's career before Ultimate Assets. "The first time we had a concert in Singapore, in 2001 or 2002, I saw that there were a lot of young people, souls saved after the concert. And I told Pastor Kong that I would like to sponsor this singing mission that Sun is doing."

CHC pastor Kong Hee, deputy senior pastor Tan Ye Peng, former board member Chew Eng Han, board member John Lam, finance manager Sharon Tan and former finance manager and board member Serina Wee have all been charged with criminal breach of trust; Chew, Wee and the two Tans have also been charged with conspiring to falsify accounts.

The hearing resumes on Monday.

michquah@sph.com.sg

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

City Harvest trial: Indonesian donor Wahju Hanafi moved by church's teachings (ST, 30 August, 2013)

Their friendship blossomed over a dinner to thank him for his $1 million donation to the church.

On Friday, details of City Harvest Church founder Kong Hee's ties with long-time church member and donor Wahju Hanafi emerged in court as the criminal trial against Kong and his five of his deputies continued.

The six church leaders were charged last year with misusing about $50 million worth of church funds. Two firms are accused of helping them to do so. Mr Hanafi, an Indonesian businessman, was director of one firm and owner of the other.

Mr Hanafi, 53, is also owner or managing director of a string of companies in Papua New Guinea, where he is based, Indonesia and other regional countries. He joined City Harvest in 1990 when he moved his family to Singapore.

Questioned by the state on his relationships with the church and the six accused, he credited City Harvest with changing him as a person, and said he was so moved by its teachings that he paid back 10 years' worth of evaded taxes. "The church taught me principles like work hard, be honest, have integrity. Pastor (Kong) told me to do business with integrity."

Mr Hanafi said he was also old friends with another of the accused, John Lam Leng Hung, who was his family's first cell group leader. The state is expected to question him on financial transactions at the heart of the criminal case when he next takes the stand.

Former Xtron director testifies about close relationship with CHC founder (CNA, 30 August 2013)

SINGAPORE: At the continuing trial of six City Harvest Church leaders on Friday, details of the close relationship between church founder Kong Hee and a former director of Xtron emerged.

Indonesia businessman Wahju Hanafi was a director of production company Xtron between 2003 and 2007. Xtron is one of two companies accused of helping the church leaders misuse church funds to promote the singing career of Kong's wife, Sun Ho.

Mr Hanafi also owns the second company that has been named in the case.

A long-time member of the church, Mr Hanafi said that its teachings had changed him as a person. It led him to pay back more than S$1 million in evaded taxes. After he paid up the taxes, he said his business made a S$10 million profit. Later in 1998, he made a S$1 million donation to the church.

It was after this donation that Kong invited Mr Hanafi to dinner to thank him, and the pair became closer.

The court also heard that that the two men, Kong and Mr Hanafi, co-own a Sentosa Cove property, in which each of them have been paying a monthly instalment of S$17,000 each since 2008.

Although Mr Hanafi was a director of Xtron, he said his main role was as a sponsor for the company. He said he gave between S$1 million and S$1.5 million to Xtron instead of to the church for the Crossover Project.

The Crossover Project is an effort to reach out to non-Christians through Ms Ho's secular music.

Mr Hanafi said that Xtron started to need more money to finance the Crossover project after he decided to step down as director, to focus on his other company Firna.

He said this following questions from the prosecution about the issuing of the S$13 million bonds. He said this was because at the time, the company was preparing to launch Ms Ho's music in the US as a way for her to make inroads into the Chinese market.

Mr Hanafi said that later, when Ms Ho was invited to stage concerts in various parts of China, each concert would require a lot of money to be raised.

Mr Hanafi was also asked by the prosecution to detail his personal relationships with the other accused leaders. He said he was close to John Lam, who had been his cell-group leader when he first joined the church.

Xtron bonds come under scrutiny (ST, 30 August 2013)

Prosecutor calls them a sham but defence lawyers say church members approved purchase

THE supposed sham bonds at the heart of the City Harvest criminal trial took centre stage yesterday, as defence lawyers and the state tussled over their legitimacy.

Church members knew about them and approved of their purchase, said defence lawyers. A lawyer from Drew and Napier at the time who drafted one of the bond agreements did not raise any issues with the issuing firm's director.

The focus was on $13 million worth of bonds issued by music firm Xtron Productions which the church invested in 2007.

The state charged City Harvest Church founder Kong Hee and five of his deputies last year for using $24 million of the church's building fund to buy "sham bonds" in Xtron and another church-linked company, Firna, to fund the music career of Kong's wife, Ms Ho Yeow Sun.

They later allegedly used another $26 million to cover up this first amount.

In 2007, church executive members themselves had not objected to the use of the church's building fund for investments in general.

Yesterday, the defence noted that later, in 2010, after the Commercial Affairs Department had started investigations into these bonds, members voted to approve the specific bond transactions retroactively.

Earlier in the week, the lawyers had also noted that an auditing firm which vetted both Xtron and City Harvest also did not raise any concerns over the two entities' transactions to Xtron director Choong Kar Weng.

The state, however, rebutted these claims yesterday, saying that the auditors would have seen these bonds only after they were issued, when they opened the church's and Xtron's books at the end of the financial year.

And while defence lawyers showed on Wednesday that detailed profit and loss projections of Ms Ho's American debut meant the church and Xtron, which was managing her, had put much thought into whether the project was financially viable, prosecutors disputed that.

Deputy Public Prosecutor Christopher Ong pointed out yesterday that e-mails between Kong and American music producer Justin Herz detailing the projections were sent to Kong in 2008, a year after the church invested in the Xtron bonds.

That means they were irrelevant to the church's decision to invest, suggested Mr Ong.

This was supported by e-mails the prosecution produced earlier from Xtron accountant Serina Wee to church leader Chew Eng Han - two of the accused - written before the bonds were issued, saying that Ms Ho's album sales would not be enough for Xtron to repay the church's $13 million.

The state believes this showed the bonds were not legitimate as the church invested in them even as it knew the firm would have problems paying back the money.

When questioned, Mr Choong said he had seen other cash-flow projections that indicated the firm could repay the church, but said they were not among the e-mails produced by the defence.

Church trustee Jeffrey Cheong will be examined by prosecution lawyers today.

He will be followed by an officer from the Immigration and Checkpoints Authority who will take the stand due to a dispute in travel records of witness Choong Kar Weng, who is Xtron's director.

This is part of the prosecution's line of questioning on whether he had been present for Xtron's board meetings as indicated in the company's minutes.

Another CHC trustee, Ms Susan Ong, will be next on the stand. After her, Indonesian businessman Wahju Hanafi, former Xtron director and owner of Firna and Ultimate Assets, is expected to be called upon.

SINGAPORE CHC trustees gave investment firm power to negotiate, sign agreements: Jeffrey Cheong (CNA, 30 August 2013)

SINGAPORE: A trustee of City Harvest Church, whose role was to manage its assets, told the court on Friday that he had not been involved in the negotiations that related to the investment documents he signed off on.

Mr Jeffrey Cheong, who is a founding member of the church and one of the church's three trustees, said this was because they had given investment firm -- AMAC Capital -- the power to negotiate and sign agreements on their behalf.

Mr Cheong is the second witness to take the stand in the second tranche of the high-profile trial involving six leaders of City Harvest Church.

The six are accused of conspiring to channel S$24 million into two companies using "sham bond investments" to fund the music career of Sun Ho, the wife of church founder Kong Hee.

Another S$26 million was allegedly used to cover up the first amount.

In court on Friday, Mr Cheong acknowledged that he was no expert in managing investments, and said he was briefed either by church employees or lawyers on documents when he signed off on them.

However, when shown some of the documents relating to the church's transactions, he was unable to recall exactly what he had been briefed about.

In one instance, a S$13-million bond subscription agreement involving Xtron Productions -- the company that had managed the music career of Ms Ho between 2003 and 2008 -- the bonds had already been drawn down at the time he signed the documents.

When asked if he knew of this at the time he signed them, he said he could not remember.

Mr Cheong was also shown some documents relating to the church's transactions, which he said he had not seen before.

These included a letter from John Lam -- one of the accused -- to the owners of glassware manufacturer Firna. The church had agreed to invest millions in Firna bonds, and be allowed to convert the bonds into shares in the company.

If that was carried out, the church would sell the shares back to Firna at US$1.

It was also pointed out that some investment decisions that had been made by the church's management board, and which the trustees had signed off on, had not been made known to the church's executive members during general meetings.

City Harvest Trial: Trustee had not seen documents linked to church's investment (ST, 30 August 2013)

A trustee of the City Harvest Church responsible for managing its assets said on Friday that he had not seen several documents related to the church's investments.

This, however, was not unusual as the trustees had given an investment firm the power to negotiate and sign agreements on their behalf, he said.

The documents were related to financial transactions which are at the heart of the ongoing criminal trial against church founder Kong Hee and five of his deputies.

The six were charged last year with conspiring to cheat the megachurch of about $50 million in total. $24 million was allegedly misused to finance Kong's wife Ho Yeow Sun's music career, and another $26 million purportedly taken to cover this up.

Mr Jeffrey Cheong, a founding member of the church who is now one of its three trustees, said he would have been briefed on other documents about investments at the time he signed them, but he could not recall what he had been told.

Among the documents shown in court on Friday which he had not seen was an letter from John Lam Leng Hung, one of the accused, to the owners of glassware manufacturer Firna. The church had agreed to invest up to $24.5 millions in Firna bonds, although only $11 million was eventually given to the firm.

Part of the contract allowed the church to convert the bonds to shares in the company. However, if this was ever done, City Harvest would sell the shares back to the company at just US$1, Lam promised in the letter.

CHC and Xtron used same auditors for transparency: Witness (Today, 29 August 2013)

SINGAPORE — Defence lawyers in the trial of six City Harvest Church leaders today (Aug 29) sought to show that Xtron Productions and the church were transparent with their auditors.

Asked by accused Tan Ye Peng’s lawyer, Senior Counsel N Sreenivasan, why both parties used the same auditors, Xtron director Choong Kar Weng said it was “for transparency’s sake”.

“There’s nothing to hide,” he said.

Mr Choong, the prosecution’s witness, agreed with Mr Sreenivasan that this arrangement made it transparent that church building funds were being invested in Xtron, which used the money for the music career of Ms Ho Yeow Sun — accused and church co-founder Kong Hee’s wife, who was managed by Xtron from 2003 to 2008.

Mr Choong also said no supporters of the Crossover Project — Ms Ho’s pop music career to get more people into Christianity — would ever want the church to bear losses.

Senior Counsel Andre Maniam, lawyer of Sharon Tan Shao Yuen, another one of the accused, showed that law firm Rajah & Tann acted for Xtron in several transactions including its purchase of Riverwalk, its advance rental licence agreement with the church and for its purchase of bonds issued by a glass company called Firna.

This would mean the firm understood what one transaction meant for another, Mr Maniam argued.

Earlier this week, the prosecution produced a March 2010 email by Mr Choong to Kong that raised the idea of criminal breach of trust (CBT) in the church’s transactions with other entities. Mr Choong went on to write that he did not think any CBT had been committed.

Asked by Mr Maniam if he still held this view today, Mr Choong said yes.

(Blogger's note: I don't think they got the right to be associated with the word "transparent". Below is a transcript from a straw poll in 2010:

Pastor Kong word for word 28 March 2010:

"So I mean Sun is not just a a a new girl that’s starting out. I mean she’s a co-founder. You know… she’s my wife. She co-founded the church. So during the AGM of 27 April 2003, together with our auditor, we informed the members very clearly, very clearly, that Sun’s Crossover project was sponsored by the Hanafi family and other various individuals, not by City Harvest. If you remember we even showed a video. That was made very clear back then."

So CHC didn't sponsor, CHC invested in Xtron which sponsored Sun? He should become a politician la. Can't believe people still buying this crap.)

Xtron and church transparent with auditors: Choong Kar Weng (CNA, 29 August 2013)

SINGAPORE: The trial of the six City Harvest Church leaders continued on Thursday, with defence lawyers seeking to show that both Xtron Productions and the church were transparent with their auditors.

Xtron director Choong Kar Weng took the stand for a fourth day. He said that both Xtron and City Harvest Church used the same auditors as there was nothing to hide.

He added that this made it transparent that church building funds were being invested in Xtron -- which used the money for the music career of Sun Ho, wife of church founder Kong Hee.

Ms Ho was managed by Xtron from 2003 to 2008.

Mr Choong said that no supporters of the Crossover Project would ever want the church to bear losses. The Crossover Project is an effort to reach out to non-Christians through Ms Ho's secular music.

Senior Counsel Andre Maniam -- the lawyer for Sharon Tan, one of the accused -- argued that law firm Rajah & Tann had acted for Xtron in several transactions. These include its purchase of Riverwalk, its advance rental licence agreement with the church, and for its purchase of bonds issued by glass company Firna.

He said this meant that it understood what one transaction meant for another.

He also reiterated that he did not think any criminal breach of trust had been committed, after the prosecution produced a March 2010 email by Mr Choong to Kong that raised the idea of criminal breach of trust in the church's transactions with other entities.

Mr Choong went on to write that he did not think any Criminal Breach of Trust had been committed. When asked by Mr Maniam if he still held this view today, Mr Choong said 'yes'.

City Harvest trial: external lawyers found nothing wrong with accounts, said defence (ST, 29 August 2013)

City Harvest Church members had overwhelmingly supported its co-founder Ho Yeow Sun's music career as a way to evangelise, and external lawyers had found nothing wrong with various allegedly suspect financial transactions.

That was the defence put up on Thursday by lawyers for six church leaders accused of the misuse of church funds.

The state believes the money was channelled into Ms Ho's career in 2007 and 2008 through sham bonds issued by two companies run by church members, glassware manufaturer Firna and music firm Xtron Productions, which managed Ms Ho's career from 2003 to 2008. But defence lawyers said that church members had long supported Ms Ho's music ambitions as a way to evangelise and voted to approve it in board meetings.

In 2010, several years after the church invested in the bonds and months after the authorities raided the church's offices, church members had also "overwhelmingly" voted to retroactively approve the bond purchases(blogger's note: they did? But does this also mean at first it was illegal, hence "retroactively"?), Xtron director and church member Choong Kar Weng added when questioned by defence lawyers.

Mr N Sreenivasan, lawyer for accused church leader Tan Ye Peng, also noted that external lawyers for Xtron had found nothing wrong with these and other allegedly suspect transactions at the time they were carried out.

He put it to Mr Choong: "Did the lawyers warn you that (the bond investments) was an improper use of the CHC (City Harvest Church) fund?", to which Mr Choong replied: "Not that I know of."(blogger's note: then again, it has already been shown that there's so much u don't know so little. Don't dare to say don't have.)

City Harvest founder Kong Hee and five of his deputies were charged last year with misappropriating about $24 million to finance Ms Ho's career and purportedly took another $26 million to cover the first amount up. The money was allegedly taken from the church's building funds meant for the land purchases, rental, furniture and construction.

All Xtron decisions must be approved by directors: witness (BT, 29 August 2013)

City Harvest Church (CHC) members may have discussed matters involving Xtron Productions, a music production house that managed Sun Ho's career, but the final decisions were always made by Xtron's directors, the court heard yesterday.

Xtron director Choong Kar Weng, cross-examined by the defence for the first time since he took the stand on Monday, told the court that no decision of Xtron's could be taken without its directors' approval.

His testimony yesterday, however, seemed at odds with the evidence he tendered earlier in the week; on Monday, under examination by the prosecution, he said he left certain decisions relating to a $13 million bond issue that Xtron made to CHC - such as when the bonds should be drawn down - to CHC member and former finance manager and board member Serina Wee.

Yesterday, under cross-examination by Senior Counsel Kenneth Tan, who represents CHC board member John Lam, Mr Choong said all Xtron decisions had to be approved by him and/or fellow Xtron director Koh Siow Ngea.

Mr Tan asked: "While the prosecution's case is that there are several people in City Harvest Church who may be involved in discussions to make proposals to Xtron, that doesn't mean that the City Harvest Church runs Xtron because there is a need to have any proposals that they make approved by a director or by the directors of Xtron?"

"That's correct," Mr Choong replied. "I need to understand the matter that they propose. I need to evaluate Xtron's position, to see what is good. I will also, on a personal basis, think about the objective of the proposal, and whether it benefits the church, or at least will not cause any harm to Xtron."

He added that he has also modified or disagreed with proposals made by the church. An example of this involved CHC's decision to have Xtron buy a $17.55 million property at The Riverwalk on the church's behalf.

"I remember (CHC) pastor Tan (Ye Peng) spoke to me over the phone about using the advance rental to purchase Riverwalk. I didn't feel comfortable. I wrote an e-mail to Pastor Tan. Subsequently, (former CHC board member Chew) Eng Han also called me to explain that position about using advance rental. I didn't feel comfortable at all.

"After that, they took what I said into consideration and they changed it to the bonds instead - Xtron issuing bonds to raise the funds to purchase Riverwalk," he said.

Mr Choong also testified that he believed the bond issue made commercial sense to Xtron, while also representing an investment opportunity for the church.

Under questioning by Senior Counsel Kannan Ramesh, CHC finance manager Sharon Tan's counsel, Mr Choong said he had no doubt that the bonds issued by Xtron were "proper investments".

He also agreed that there was a "significant alignment of interests" between CHC and Xtron, but that this was not synonymous with the church "controlling" Xtron.

Senior Counsel Michael Khoo, who represents Chew, asked Mr Choong: "Were these bond transactions devised by the accused persons, the six of them sitting in the dock, in order to conceal the diversion of the church's Building Fund monies to fund Sun Ho's music career?"

"No, not in my opinion," said Mr Choong.

He added that the church's Crossover Project was "never about Sun (Ho)'s personal music career", and that it was "really the church's project".

CHC pastor Kong Hee, deputy senior pastor Tan Ye Peng, former board member Chew Eng Han, board member John Lam, finance manager Sharon Tan and former finance manager and board member Serina Wee, are accused of criminal breach of trust for allegedly misusing some $50 million of the church's funds to promote Ms Ho's music career through an elaborate series of round-tripping and sham bond transactions. Chew, Wee and the two Tans have also been charged with conspiring to falsify accounts.

It is the prosecution's case that $11.4 million of CHC's building funds was purportedly "invested" in a Special Opportunities Fund (SOF) managed by Chew's company, AMAC Capital Partners (Pte) Ltd.

This was "round tripped" to "redeem" bonds issued by The First National Glassware (Firna), by AMAC lending the monies to Ultimate Assets, a company owned by Indonesian businessman Wahju Hanafi; Ultimate Assets in turn lent the monies to Firna, another of Mr Hanafi's companies, and Firna then purported to redeem the Firna bonds originally issued to CHC as part of the sham bond investments.

Another $12 million in CHC funds was supposedly paid out to Xtron as "purported advance rental", but this "rental" was instead used by Xtron to purchase $11.5 million worth of Firna bonds.

This sum was then said to be used by Firna to repay the loan it received from Ultimate Assets, which in turn used this money to repay the loan it previously received from AMAC. AMAC then "redeemed" CHC's purported investment in the SOF.

Heard In Court On August 28 (City News, 29 August 2013)

Here are some excerpts from the transcripts of the cross-examination of Choong Kar Weng in court today.

Kenneth Tan, on the fact that board members were aware of Xtron’s management of Sun Ho and supported financially:

“Not only did the board know that Xtron was managing Sun Ho, several of the board members, at least in 2006, just looking at the 2006 sponsorship list, were giving monies in support of the Crossover Project to Xtron?”

An exchange between Kannan Ramesh, senior counsel for Sharon Tan, and Choong Kar Weng on an email about the bonds issued by Xtron to City Harvest Church:

KR: So all the bonds that were issued by the church to Xtron were issued at the time when you were sitting as a director of Xtron, right?

CKW: That’s correct.

KR: At that time, did you harbour any doubts as to whether these were proper investments?

CKW: No.

KR: In 2010 when you were writing this e-mail to Pastor Kong, did you — of course, you are now writing in the context of dishonesty, and Penal Code and so on and so forth, so there were somewhat troubling issues — did you have any doubts that these were anything other than investments?

CKW: No.

KR: Today, sitting in the box, do you have any doubts — and this is from the perspective as Xtron director and all those capacities that were described — that these were anything other than investments?

CKW: No.

Kannan Ramesh establishing why is a need to be discreet about the Church supporting the Crossover Project

KR: My question, Mr Choong, is this: if Sun Ho was sent out to the secular world and to wolves, as is stated —it is a quotation — and she was overtly an ambassador of City Harvest Church, going to places like China, would the Crossover Project have succeeded? Was there a need for the church to be discreet in its support of Sun Ho’s secular career so that the evangelism of the Crossover Project could succeed?

CKW: Yes.

KR: Can you explain that?

CKW: We wanted to use —for Sun, we wanted to use Sun to penetrate the — use pop culture to influence the lives of the youth, especially in China. If Sun were to go in as representative of the church, the people would not accept Sun or her message so readily. That’s number one. The government may — okay, from our — from what we know about the persecutions suffered in China, the churches suffered in China, the government may not be as cooperative. As such, Sun’s influence may not be so great.

Kannan Ramesh establishing that Choong did not think it dishonest to use money donated to acquire a property.

KR: From your perspective — I want to bring you back to the Penal Code example — if members of the church had donated money for the acquisition of a property, for the investment of a property, and the monies were then used by the church as an investment into Crossover, you would not regard that as dishonest, would you?

CKW: No.

KR: It would not be an issue because that act would be an act in good faith?

CKW: For me, yes.

KR: It would be an act in good faith because it was perceived, or at least that was your perception, that that investment was for the purpose of the church?

CKW: Correct.

Senior counsel for Chew Eng Han, Michael Khoo, asking why Choong trusted Foong Daw Ching, accounts advisor of both CHC and Xtron, who also sits on the advisory committee of Commissioner of Charities.

MK: So would it be fair to say that if Mr Foong, or his company, Baker Tilly, were the auditors of both CHC and Xtron, and sitting on the advisory committee at some point in time of COC, if he had thought that anything was amiss with any of the transactions between CHC and Xtron, would you have expected him to have highlighted this to you as director of Xtron?

CKW: Yes, definitely.


(Blogger's note: ok case closed. Since the accused didnt think it was a crime, obviously none was committed. Kthxbuai)

Profit from Ho’s music projected to be S$34.6m (Today, 29 August 2013)

Kong’s lawyer tries to show that expected earnings far exceed S$13m in bonds that Xtron has to redeem from CHC

SINGAPORE — Beyonce, Shakira, Wyclef Jean and will.i.am. Some of the most recognisable names in the music world were thrown up in court yesterday, as plans for Ms Ho Yeow Sun’s foray into the United States pop music scene were revealed in the trial of six City Harvest Church leaders.

Ms Ho, also known as Sun Ho, was to work with Wyclef Jean and The Black Eyed Peas’ will.i.am. A US marketer who believed she could “be huge” benchmarked her marketing budget against that of Columbian songstress Shakira’s supposed US$12 million (S$15.4 million) budget. It was more modest than Beyonce’s US$17 million budget, according to the marketer, Ms Lisa Ellis.

US producer Justin Herz told this to Kong Hee, who is Ms Ho’s husband, the church’s co-founder and one of the accused, in emails in May and June 2008.

The documents were tendered by Kong’s lawyer Edwin Tong in court when he cross-examined prosecution witness Choong Kar Weng.

Mr Choong is Director of Xtron Productions, which provided audio-visual services to City Harvest Church and managed Ms Ho’s career from 2003 to 2008.

Mr Tong was trying to show that projected album sales and profits from Ms Ho’s music career far exceeded the S$13 million in bonds that Xtron had to redeem from the church.

He was countering the prosecution, which contends that the bonds were sham and had earlier this week quoted an email by Serina Wee Gek Yin — Xtron’s accountant and another of the accused — which revealed expected album sales of 200,000 and revenue of S$2.17 million. This would be, in Wee’s words, “hardly enough to pay off the S$13 million”.

Mr Tong argued that the figure used by Wee could be only part of the total sales, given the “worst-case scenario” estimates of Ms Ellis and Mr Herz. According to a seven-year profit and loss projection by the latter, the total net profit from Ms Ho’s US career by next year would be nearly US$27 million (S$34.6 million).

The emails also showed Kong and another of the accused, former church board Vice-President Tan Ye Peng, concerned about the ballooning album expenses.

The latter was worried that the initial capital outlay of US$12.4 million and a longer capital recovery period for the project would make it “a hard sell to the XPL (Xtron) directors”, Kong wrote in an email to Mr Herz.

Three other defence lawyers cross-examined Mr Choong yesterday.

Senior Counsel Kannan Ramesh, lawyer for one of the accused, Sharon Tan Shao Yuen, countered the prosecution’s assertion that some losses from Ms Ho’s music career, also known as the Crossover Project, could be ultimately covered by church funds.

Mr Choong agreed with Mr Ramesh’s statement that loans taken by former Xtron Director Wahju Hanafi to fund the project’s expenses were “filled” by returns from AMAC Capital Partners, as well as the Multi-Purpose Fund, which consists of donations by individuals for Crossover and is separate from the church.

AMAC is an investment firm owned by former church member Chew Eng Han, another of the accused.

Asked by Senior Counsel Michael Khoo, Chew’s lawyer, if he ever felt Xtron’s bond transactions were sham, Mr Choong replied in the negative.

The defence continues to cross-examine Mr Choong today.

Defence seeks to refute allegations in City Harvest leaders' trial (CNA, 29 August 2013)

The defence of the six City Harvest Church leaders on Wednesday sought to refute allegations that Xtron Productions was controlled by the church.

The six leaders, including church founder Kong Hee, are accused of misusing millions of church funds to promote the singing career of Kong's wife, Sun Ho.

The other five are Tan Ye Peng, Chew Eng Han, Serina Wee, Sharon Tan and John Lam.

The prosecution has alleged that some of the accused tried to cover up the misuse through "sham bond investments" through three companies, including Xtron.

For the first time since the trial started, the court heard how Ms Ho's music career in the United States was launched.

American music producer Justin Herz and famous rapper Wyclef Jean projected Ms Ho to become a huge international superstar.

Emails from 2006 between Mr Herz and Kong Hee stated that Ms Ho was regarded as having huge potential by some in the music industry.

Her publicity budget was set by Mr Herz and Ms Lisa Ellis at between that of superstars Beyonce (US$17 million) and Shakira (US$12 millon). Ms Ellis is the head of Ms Ho's marketing team.

The net profit was expected to surpass US$25 million over seven years from 2007 to 2012.

Mr Herz and Ms Ellis also predicted Ms Ho's album sales would hit two million copies.

Previously, the court heard that accused Serina Wee had indicated Ms Ho's album only sold 200,000 copies.

In 2008, Wyclef Jean had proposed to "buy back" copies of Ms Ho's albums to boost sales and Kong had queries on it.

On Wednesday, when questioned by lawyer Edwin Tong, who represents Kong Hee, Xtron's director Choong Kar Weng said it made commercial sense to invest in Ms Ho's career, given the glowing projections.

Another reason was because Xtron and the church shared common interests.

Mr Choong also said the church's board of management knew Xtron was managing Ms Ho's career as well as the church's Crossover Project.

The Crossover Project is meant to reach out to the secular world through pop music.

Mr Tong also tried to make the point that Kong had tried to rein in the massive budget.

On Wednesday afternoon, Sharon Tan's lawyer Kannan Ramesh tried to make the point that even though there were holes in Xtron's accounts, they could be filled up with the return from investments made by AMAC Capital, another company linked to the church. They also had money in the independent multi-purpose fund meant for the Crossover Project.

Earlier in the day, defence counsel Kenneth Tan tried to make the point that even though his client, John Lam, was involved in email discussions about Xtron, execution of any suggestion ultimately lies with the Xtron director.

Mr Choong, who is taking the stand for a third day, agreed.

The prosecution witness also testified that John Lam was not involved in managing Xtron.

The line of defence comes after the prosecution made the point over the last two days that Mr Choong was just a rubber stamp and that his firm was controlled by the church.

On Tuesday, the prosecution charged that accused Serina Wee, Chew Eng Han and Tan Ye Peng took pains to plan and hide information from church members.

It is also the prosecution's case that the six accused used Xtron to commit their offences.

How $28.6M was spent (TNP, 28 August 2013)

Documents submitted during the trial of five City Harvest Church leaders and a former member for allegedly misusing millions in church funds show that over US$22 million ($28.6 million) was set aside to promote singer Sun Ho's English album (which has yet to be released) in Asia.
KOH HUI TENG looks at what the money was budgeted for

She was the $10 million woman.

That was the budget set aside to produce and market an English album in the US for City Harvest Church (CHC) founder Kong Hee's wife, Ho Yeow Sun's.

Also known as Sun Ho, she was the face of the Crossover Project, a church mission that was started in 2002 to reach out to non-Christians through music.

But not every cent went into the music.

Nearly $700,000 was pencilled in as Kong's airfare, under the entry "increase in travelling expenses". The document was among the evidence submitted to the courts.

Kong and five others are on trial for allegedly misusing more than $50 million of church funds - $24 million to fund Ms Ho's career and another $26.6 million to cover the tracks of the first amount.

The second leg of the trial started on Monday.

The prosecution is querying the movement of funds between CHC and different parties like Xtron, Ms Ho's former management company.
Million-dollar budget

Documents submitted for the ongoing trial showed that the original budget for Ms Ho's Engoush album was US$6.79 million (S$8.7 million)

Of this, almost US$800,000 went to Wyclef Jean, a famed music producer and executive producer on her first US album.

Xtron thought they would make US$10 million plus by selling 1.5 million albums at US$7 each.

Ms Ho had actively pursued a music career in the US, where she was based largely, between 2003 and 2010.

She released several English singles while there, five of which made it to the Top 10 of Billboard's Hot Dance Club Songs.

Xtron directors later agreed during a meeting to increase the budget for her album by another US$2 million to US$8 million (S$10 million).

More than US$360,000 was budgeted for "airport panels in China", in another section showing where the US$13 million bonds had gone.

Kong's airfare was part of the reason that a US$25 million bond was needed.

Defence seeks to refute allegations in City Harvest leaders' trial (CNA, 28 August 2013)

The defence of the six City Harvest Church leaders on Wednesday sought to refute allegations that Xtron Productions was controlled by the church.

At the start of the cross-examination of Xtron's director, Choong Kar Weng, defence counsel Kenneth Tan tried to make the point that even though his client, John Lam, was involved in email discussions about Xtron, execution of any suggestion ultimately lies with the Xtron director.

Mr Choong, who is taking the stand for the third day, agreed.
The prosecution witness also testified that John Lam was not involved in managing Xtron.

This comes after the prosecution alleged that Mr Choong was a rubber stamp and that the church was the one controlling his firm.

On Tuesday, the prosecution charged that the accused Serina Wee, Chew Eng Han and Tan Ye Peng took pains to plan and hide information from church members.

Xtron is the former management company of singer Sun Ho, who is also church founder Kong Hee's wife.

The events firm is allegedly one of three companies used by the six accused to commit their offences.

On Wednesday, when questioned by lawyer Edwin Tong, who represents Kong Hee, Mr Choong said the church's board management knew that Xtron was managing Ms Ho's career as well as the Crossover Project.

The Crossover Project is meant to reach out to the secular world through pop music.

The court heard how the church and Xtron were trying to further Ms Ho's career in the United States.

Emails dated as early as 2006 between Justin Herz, owner of a music production house in California, Kong Hee and Tan Ye Peng showed that they were trying to manage the budget.
Mr Herz and a Ms Lisa Ellis also projected that Ms Ho's album sales would be about two million.

But the court was told previously that accused Serina Wee indicated Ms Ho's album only sold 200,000 copies.

In fact, Mr Herz and Ms Ellis said in their projections that revenue would exceed the S$13 million bonds that Xtron had issued.

The Xtron bonds were to raise funds for Ms Ho's music.

Kong Hee, along with five others, faces varying counts of misusing millions of church building funds.

The prosecution's case is that they channelled the money into two companies - Xtron and PT the First National Glassware (Firna) - through "sham bond investments".

The funds were said to have been used to boost the music career of Ms Ho.

City Harvest trial: Serina Wee’s Xtron role examined (Today, 28 August 2013)

Prosecutors today (Aug 27) continued their examination of a production company they say was controlled by City Harvest Church (CHC), in the trial of six CHC leaders — one of whom is no longer with church.

Xtron Productions director Choong Kar Weng took the stand for the second day with prosecutors questioning him about the capacity in which one of the accused, Serina Wee Gek Yin, was making decisions for Xtron, and the disclosure of financial transactions of the church to its executive members.

Wee is on trial with church co-founder Kong Hee, Tan Ye Peng, Chew Eng Han, John Lam Leng Hung and Sharon Tan Shao Yuen. They are accused of criminal breach of trust and/or falsification of accounts for allegedly misappropriating S$24 million of church funds into sham bonds and another S$26.6 million to cover up the first amount.

As with during the first tranche of the trial in May, the prosecution tried to show that Xtron was controlled by CHC.

Mr Choong, 41, told the court that he was not very concerned which party Wee was working for when she made bond drawdown decisions for Xtron.

He said he trusted her and believed she would not do anything detrimental to Xtron. Wee was Xtron’s accountant from late 2007.

The prosecution showed minutes of a church extraordinary general meeting on Aug 10, 2008, that reported that executive members were told S$18.2 million of bonds were issued by Xtron for the purchase of the Riverwalk commercial building near Boat Quay.

Mr Choong said he did not know why this was so, as only S$8.5 million of bonds were issued.

The prosecution also produced emails among Wee, Tan Ye Peng and Chew discussing whether they could describe Xtron as being under the church’s control.

Another email showed Wee telling Tan Ye Peng and Chew in 2010 how she could not disclose to a church member that a bank loan was taken to partially finance Xtron’s purchase of Riverwalk. Mr Choong said he did not see any reason why this could not be disclosed.

The trial continues.

Commentary (By Others, 28 August 2013)

The DPP is building up their case and they are going in the right direction. Firstly, they needed to establish that Xtron is the puppet company for KH and gang to siphon the CHC money away.
 
Look at the history of Xtron, who are their "directors": TYP, Kenny Low, Hanafi. You will see the intention. Siow Ngea and Kar Weng are puppet directors chosen because they have business cred, and will not spill the beans or ask too many questions. Xtron was NEVER intended to run the audio-media side, it was the convenient smokescreen. The real deal is to siphon money from CHC.

Suraj ran the operations side of the house simply because Xtron staff were all CHC Media staff "crossing over" to Xtron and Suraj was the HOD over them before Xtron. The real business is run by TYP, with periodic involvement of the "directors" to give a semblance of independent from CHC.
What is the core business of Xtron? It is NOT even the Crossover Project or to save souls. It is to siphon CHC monies away to enrich KH and Sun and their minions. Watch this...

1. Sun's $500K bonus and other advance royalties. If your purpose is to save souls, would you pay out $500K? Why would you pay advance royalties for an album that has not been even produced and will now NEVER be produced?

Sun's bonus of $500K is NOT a one off payment, there were several payments throughout the years. If the bonuses were legit, you would never try to hide it, let alone illegally.

2. CHC paid Xtron advanced rental for 8 years! $40 million! CHC bought $21 million of sham bonds. Add this all up. Where did the money go to? The "Crossover" expenditures are only a fraction of the movement of monies, though it's a huge amount. Xtron took a $10 million bank loan to finance Riverwalk. This fact shows the intent clearly. KH would like to have us believe that the Xtron bonds went to buying Riverwalk. In reality, the money went to the "Crossover".

The $10 million used to finance Riverwalk and was leased back to CHC. In other words, CHC through renting Riverwalk for our use, was effectively paying off the installments and interests of the $10 million bank loan while the bonds monies were all siphoned away.

3. The bonuses paid to Sun gives us a glimpse to how KH rewards those who are involved in the scams. Beyond the funds used for the "Crossover", untold millions went to line pockets. You can guess how much bonuses TYP gets for orchestrating Sun's career and running the siphoning scams.

The DPP look like they have a situation on their hands, the names brought up are all party to the scams, albeit at different levels: Suraj, Siow Ngea, Kar Weng. To charge or not to charge? You will hear from Hanafi soon. He has personally used millions of his own money to cover up the gaps in the building fund. KH, you have destroyed him, likewise all those who you have used in this scam.

More to come...

A CHC Confession (By Others, 27 August 2013)

There was this Arise and Build, I gave S$10,000 over 6 months when I was earning $2,800 gross a month.
 
I thought I was giving to something bigger than myself. I thought my sacrifice would be worth it.

Now I look at the table showing the breakdown of Sun Ho's bonuses, the only thing I can think of is that my giving over 6 months can't even cover 1 month of her salary, much less her birthday bonus and advanced royalties.

I'm not even angry anymore.
I'm just very very sad.

Sun Ho's pop career was worth US$25m, says Kong Hee's laywer (Today, 28 August 2013)

SINGAPORE - Some of the best-known names in the music world like Beyonce, Shakira, Wyclef Jean and Missy Elliott were thrown up in court today at the criminal trial of six City Harvest Church leaders.

They were either people that Ms Ho Yeow Sun church co-founder and wife of one of the accused Kong Hee -- was to work with, or whose marketing budgets she was benchmarked against.
Kong's lawyer Edwin Tong produced emails between Kong and United States producer Justin Herz between 2006 and 2008, that showed discussions on Ms Ho's foray into the US pop music scene and profit and loss projections from her career. He was countering a point made earlier by the prosecution that the sales projection of Ms Ho's album was 200,000, which would yield S$2.17 million -- falling short of the S$13 million in bonds that Xtron Productions had to redeem.
Xtron managed Ms Ho from 2003 to 2008. The defence was cross-examining Xtron director Choong Kar Weng.

Mr Herz and another US-based marketer Lisa Ellis projected 2 million in album sales for Ms Ho and total net profit over seven years (from 2008) exceeding US$25 million. This would be from album sales, performances and other related revenue streams.

Mr Tong suggested it was not uncommon for an external party to recommend potential directors to a company -- as church leaders had done for Xtron. Mr Choong also agreed that his approval was needed for key Xtron decisions.

The defence continues to cross-examine Mr Choong.

(Blogger's note: u pay me money I also can tell you your album will sell a zillion copies.
They are obviously fans of Michelle Chong's 一炮而红
And not Liang Wenfu's一步一步来)

City Harvest trial: Sun Ho's music album cost over $10m to produce (Yahoo News, 28 August 2013)

Minutes from a board meeting involving Xtron Productions, a music production company alleged to have been used by City Harvest to siphon off church funds, reveal that over S$10 million was spent on an album that was supposed to kickstart Ho Yeow Sun’s career in the US.
Ho Yeow Sun is the wife of City Harvest founder, Kong Hee, who along with other senior church leaders, is on trial for misappropriating S$24 million of church funds to finance Sun's singing career.

In addition, over S$26 million in church money was allegedly misappropriated to cover up the original diversion.

The S$10 million figure came from minutes of an Xtron board meeting, which was shown in court on Tuesday.

According to the minutes, over US $1.6 million was spent on production fees for rap music star Wyclef Jean, who collaborated with Sun on the song, "China Wine", whose music video cost US$1 million to produce.

Xtron directors also approved an additional $2 million to produce Ho’s album “in order to get some popular song artistes and singers from USA be involved in the album”, the minutes showed. The album was also never released.

Minutes also showed Xtron paid for Sun Ho's travel expenses in business class as she "had a very busy promotional schedule", reported The Straits Times.
On Monday, the paper also reported that Sun had received over half a million dollars in bonuses and advances that were couched as "personal gifts" by sponsors in doctored documents.


(Blogger's note: every time I see this figures, I can't help asking myself, now looking back, does she think it is worth it? And US$2,600,000 for china wine? Seriously?)

City Harvest trial: Xtron independent of church, says defence lawyer (CNA, 28 August 2013)

A firm accused of helping City Harvest Church to misuse church funds was an independent entity, and church leaders did not have final say over its decisions, a defence lawyer said on Wednesday. The church funds was allegedly funnelled through two companies, music firm Xtron and glassware manufacturer Firna, and the state has been making the case that Xtron was nothing more than a puppet for the accused church leaders.

Mr Kenneth Tan, lawyer for John Lam Leng Hung, one of the accused, however said that Xtron was never listed on the church's financial reports. "When the church wants to control a company... they openly put in their accounts," he said, referring to Attributes, a church-linked company which was listed in the reports.

Mr Tan added that even though there were emails between the accused church leaders discussing various Xtron plans, these proposals would have to be approved by Xtron directors who were not legally bound to follow the church's wishes. The state, however, has produced emails between the accused suggesting that at least one Xtron director would follow their wishes.

In an email in July 2008, Chew Eng Han wrote to Xtron accountant Serina Wee and Tan Ye Peng - all of whom are accused of the misuse of church funds - that they could tell the church's members that "through the placing of (Koh) Siow Ngea on the board of Xtron, CHC (City Harvest Church) has assurance that Xtron's activities and running will very much be in line with the vision of what CHC wants to achieve in the marketplace".

City Harvest founder Kong Hee and five of his deputies were charged last year with misusing church funds to bankroll the music career of Kong's pop-singer wife Ho Yeow Sun. They allegedly took $24 million at first, and then purportedly used another $26 million to cover up the first amount.


(Blogger's note: I hope they not paying this Kenneth too much. Want to control means openly put in accounts? He not even paying attention. Didnt he hear they already know they shouldnt be controlling it? Didnt the prosecution also show that the directors are yes men?)

Kong Hee was worried about bond transactions: witness (BT, 28 August 2013)

CHC members tried to plug 'hole' before investigation, says a director of Xtron

Some three years after City Harvest Church (CHC) devised what the prosecution terms an elaborate scheme involving round-tripping and sham transactions to hide the fact that they were diverting money to fund Sun Ho's career, Ms Ho's husband - CHC pastor Kong Hee - raised his concerns to a church member about the legality of these transactions, the court heard yesterday.

Choong Kar Weng, a director of Xtron Productions - which managed Ms Ho's music career - and a former CHC board member, said that Kong had called him at the end of March 2010, "saying he's concerned with all the bonds and all the transactions".

Kong, deputy senior pastor Tan Ye Peng (Tan YP), former board member Chew Eng Han, board member John Lam Leng Hung, finance manager Sharon Tan and former finance manager and board member Serina Wee stand accused of criminal breach of trust; they are alleged to have misused some $50 million of the church's funds to promote Ms Ho's music career by round-tripping money and setting up fictitious bond transactions, some of which involve Xtron. Chew, Wee and the two Tans are also charged with conspiring to falsify accounts.

Mr Choong, who was spending his second day on the stand as the prosecution's witness, said: "Pastor Kong was just concerned that, with all the bond arrangements, whether things were legal, etc, and he called me to ask me to check it out."
(Blogger's note: *gasp* could he be innocent!?)

The prosecution produced an e-mail Mr Choong sent to Kong the next day, in which he (Choong) raised the question, "If the authorities view all the parties as related and look at all these as one project, will there be a case of CBT (criminal breach of trust)?"

He then answered that question, "I don't think anyone is guilty of CBT here because the way we used CHC's funds are all within the powers of the Management Board. Furthermore, there is no dishonesty here."

He went on to say: "It is very important to prove that CHC is not disadvantaged throughout all these transactions. To do that, we can show that CHC has earned $1.6 million in interest from Xtron's bond transactions and to fill up Xtron's losses."

After that, he sent a BlackBerry message to Ms Ho, Kong, Tan YP and Chew, saying: "Sun, one of the main reason(s) why I proposed the Special Audit is to buy us time to fill up the hole. We don't want all the issues to grow to the exten(t) that the authorities step in BEFORE we fill up the hole. By appointing our auditors, it will be easier to talk and get things done. If the report turns out that we are lacking in some areas, we will improve and change, they can help us, that's why to me it is important to let the relevant authorities know that we initiate a special audit. They will at least not do anything till the report comes out. By then the hole is filled."

"What is this hole that needs to be filled?" asked deputy public prosecutor Christopher Ong.

"This was the losses of Xtron, or the Crossover Project (CHC's idea of evangelising through pop music) that we need to fill," Mr Choong said.

"Which authorities were you talking about that might step in?" deputy public prosecutor Ong asked.

"It could be COC (Commissioner of Charities), it could be anyone. At that time, we did not know of any investigations, nothing," Mr Choong said.

It is the prosecution's case that $11.4 million of CHC's building funds was purportedly "invested" in a Special Opportunities Fund (SOF) managed by Chew's company, AMAC Capital Partners (Pte) Ltd.

This was then "round-tripped" to "redeem" bonds issued by The First National Glassware (Firna), by AMAC lending the monies to a company owned by Indonesian businessman Wahju Hanafi called Ultimate Assets; Ultimate Assets in turn lent the monies to Firna, another of Mr Hanafi's companies, and Firna then purported to redeem the Firna bonds originally issued to CHC as part of the sham bond investments.

Another $12 million in CHC funds was supposedly paid out to Xtron as "purported advance rental", but this "rental" was instead used by Xtron to purchase $11.5 million worth of Firna bonds.

This sum was then used by Firna to repay the loan it received from Ultimate Assets, which in turn used this money to repay the loan previously received from AMAC. AMAC then "redeemed" CHC's purported investment in the SOF.

Mr Hanafi has multiple links to CHC and is expected to take the stand later this week.

The hearing continues today with Mr Choong being cross-examined by the defence counsel.

(Blogger's note: so this is how we plug a hole)

City Harvest Church trial: Leaders accused of hinging ties with Xtron (ST, 28 August 2013)

City Harvest Church leaders accused of misusing the church's funds told auditors one thing and their parishioners another.

Yesterday, the State tried to prove this by producing a series of e-mail messages to show that three of the accused - Serina Wee, who was Xtron's accountant, Chew Eng Han and Tan Ye Peng - were in cahoots to hide details and deflect questions about the church's connection with Xtron, even from the church's own members.

One set in 2008 had to do with the church paying exorbitant rent for a Riverwalk property from the company. "I feel it's hard to justify to the members why CHC (City Harvest Church) needs to lose $480,000 a year from the arrangement," said Wee.

This amount was meant to help Xtron pay off a bank loan instalment which members did not know about, Wee said in her e-mail.

Wee, Chew and Tan were also worried about how to present the two entities' close connection to the church's auditors and members.

"If anyone asks about the profits made (by Xtron from the Riverwalk rental during the City Harvest Church board meeting), then we should address it and say that Xtron is under CHC control and therefore any profits will be well managed by us for future works," wrote Chew.

Tan then replied: "Are we allowed to say that Xtron is under CHC control?" To which Chew replied: "Not in such bold terms, but we should let our members have assurance that Xtron's gains will be channelled into projects in line with the CHC vision."

He added: "The only problem of using the word 'control' is that if it gets to the auditors, they may get ultra-conservative and say we own Xtron, and therefore we need to consolidate (the two). So we need to find a balance between what we tell our AGM - annual general meeting - (they want full control) and what we tell auditors (we don't want them to think we control Xtron)."

In another set of e-mail messages in 2008, Wee also told church founder Kong Hee, Tan and Chew that she had received advice from a fellow church member: "We can talk about Xtron to the members in the (extraordinary general meeting) but don't minute down everything. Just minute down necessary portions so as to not show too close a relationship or control over Xtron."

Xtron is one of two companies accused of helping the megachurch's leaders to funnel church funds illegally to bankroll pastor-singer Ho Yeow Sun's music career. It managed Ms Ho from 2003 to 2008.

Kong, who is Ms Ho's husband, and five of his deputies were charged last year with conspiring to cheat the church of millions of dollars. They allegedly misused $24 million of church funds to finance Ms Ho's singing ambitions, and then purportedly took another $26 million to cover up the first amount.

Yesterday, Deputy Public Prosecutor Christopher Ong also highlighted several Xtron financial transactions in 2009 that he suggested were part of a cover-up of the misuse of church funds.
In November that year, the church had given Xtron about $15 million as part of an eight-year rental agreement. Less than a month later, Xtron invested about $11.5 million in bonds issued by Firna, the other firm accused of helping with the cover- up.

DPP Ong pointed out that just months after the church gave Xtron the rental fee, it bought a stake in Suntec City. This made the rental agreement redundant and it was terminated shortly afterward.

Xtron also should have used the rental fee to fulfil its side of the agreement instead of investing in Firna's bonds, Mr Ong said.

When asked, Xtron director Choong Kar Weng said he was not aware of City Harvest's impending purchase of the Suntec property, and added that the Firna bond purchase was a good investment as it would have reaped interest. "If I needed to show proof of funds (for other deals), I could have mortgaged the bonds, for example," he said.

He admitted under questioning, however, that the suggestion to invest in the Firna bonds had come from Chew Eng Han, one of the accused, and was furthermore part of a larger plan to satisfy the church's auditors who had grown "uncomfortable" with bonds it had purchased.

"Eng Han drew a diagram... The Firna bonds were part of the diagram. To me, the overall purpose was because the auditors of CHC were not comfortable with the bonds, that's why there was a need to restructure the bonds and the debt."

CHC leaders alleged to have hidden info on Xtron from members (CNA, 27 August 2013)

SINGAPORE: Prosecutors on Tuesday said three of the City Harvest Church leaders, who are on trial for the misuse of church funds, have taken pains to plan and hide information from church members.

The prosecution tried to draw at from the documents raised in court on Tuesday.

The three accused - Serina Wee, Tan Ye Peng and Chew Eng Han, were in cahoots in trying to find a way to deflect questions on Xtron Productions and the church.

In an email to Tan and Chew dated March 30, 2010, Wee, who is also Xtron's accountant, stressed the need to come up with explanations.

The email came after questions were posed by a church member.

That email was then sent to church founder, Kong Hee, who is also on trial.

In it, Wee raised concerns about how people would find out about a S$10 million bank loan Xtron took, even after the church had loaned the company S$21.5 million in bonds.

The loan from the church was meant for Xtron to buy a unit at RiverWalk.

Wee stressed in the email the need to sell off the RiverWalk unit as soon as possible, so they can "reduce the share capital of Xtron from S$6 million to S$6".

She said this was to ensure there won't be a query as to where the shareholders got the capital from.

"We need to scrutinise XPL (Xtron Productions) financial statements to prepare for any questions on its expenses, liabilities and ability to meet the rental payments," said Wee in the email.

The prosecution also made the point that the three accused made it seem like the church had full control of Xtron, which wasn't the case.

In court, Xtron Director Choong Kar Weng testified that he trusted Wee and believed that she would not make decisions detrimental to his company.

Xtron, the former management company of singer Sun Ho, who is also Kong Hee's wife, is allegedly one of three firms used by the six accused to commit their offences.

Kong Hee, John Lam, Chew Eng Han, Tan Ye Peng and Serina Wee allegedly misused S$24 million of church building funds by channelling the money into two companies, Xtron and PT the First National Glassware (Firna), in what has been described as "sham bond investments".

This allegedly took place between January 2007 and October 2008.

A second set of charges involve Chew Eng Han, Tan Ye Peng, Serina Wee and Sharon Tan, who are said to have misappropriated some S$26 million to cover up the first sum.

The funds were allegedly used to boost the music career of Kong's wife, Sun Ho.

Email shows 'how they tried to doctor documents' (ST, 27 August 2013)

Email shows 'how they tried to doctor documents'

AMONG the dozens of e-mail messages and minutes of meetings produced by prosecutors in court yesterday, one showed how church leaders tried to doctor documents relating to bonuses paid to Ms Ho Yeow Sun in 2006.

In the e-mail dated March 14, 2007, and addressed to founding member and deputy senior pastor Tan Ye Peng, then finance manager of production house Xtron Productions Serina Wee proposed that in order to avoid public scrutiny, sponsors should declare the money as personal gifts to Ms Ho.

"After Wahju (Hanafi) sponsored $479,750 to cover the bonuses and advances given to Sun, we are still short of $118,028 to cover the total amount given to her," Wee wrote.

"...I have come up with a proposed list of persons to talk to, to get them to write a letter to Xtron to say that their giving is meant for Sun personally. We can explain to them that because of public scrutiny, we don't want Xtron to be seen giving money to her beyond her salary."

The list of persons include executive pastor Aries Zulkarnain and Chew Eng Han, one of the accused.
The e-mail also gave a breakdown of Mr Hanafi's sponsorship to Ms Ho in 2006. It included more than $300,000 in "advance royalties" for her music, a 4 1/2-month bonus worth $69,750 and a $30,000 birthday cash gift.


MELODY ZACCHEUS

(blogger's note: she earned US$15,500 a month. 
so the figure of $507,950 was made up by the sum of $15,500 x 12 and all the other additional figures listed above.
not too shabby at all.)

Breakdown of Sun Ho's Hollywood budget (LianHe WanBao 27 August 2013)

(Translation of article)
All Figures In USD

Producer Wyclef Jean (Producer of China Wine)   $1,670,000
"My Right To Love You" song production             $13,725
"Gone" song production                                       $85,163
"What Kind Of World" song production                 $25,000
"One Day You Will" song production                     $25,000
Producer and other artistes                                 $1,600,000
Music video production                                       $1,057,000
Album publicity                                                  $1,100,000
Other expenses                                                   $2,000,000
Tas Stenier Public Relations                                $162,000
JH Management production company                    $270,000

Total                                                                        $8,007,888



(blogger's note: i haven't released any albums, but shouldn't you have an album before you start spending so much on album publicity? then again, what do I know)

When CHC makes News in its own City (Breakfast Network, 27 August 2013)

by Augustin Chiam

Yesterday marked the resumption of the much-anticipated trial of several senior City Harvest Church (CHC) leaders for allegedly siphoning off tens of millions of dollars and covering it up through what prosecutors are calling “round-tripping”.

Following the line of inquiry during the first leg of the trial, prosecutors continued to ask questions of Xtron Productions’ relationship with CHC. The main witness being cross-examined yesterday was Mr Choong Kar Weng who has been a director at Xtron since Dec 31, 2005.

Although another director at Xtron, Mr Koh Siow Ngea, had earlier insisted that Xtron and CHC are independent, Mr Choong Kar Weng did not seem to be able to give an adequate explanation when presented by evidence from the prosecution indicating heavy involvement of CHC staff in Xtron’s operations.

Yahoo reported that when asked why an employee of CHC, Mr Suraj, was approving staff bonuses at Xtron and why Deputy Pastor of CHC, Mr Tan Ye Peng, was asked to vet Xtron’s meeting minutes, Mr Choong replied that he did not know.

According to TODAY’s report, Mr Suraj was also listed (wrongly?) as a member of Xtron in its meeting minutes dated Dec 29, 2006. Because Mr Choong is primarily based in Malaysia, Mr Suraj was entrusted with the day-to-day operations of Xtron despite being a CHC staff. Mr Choong also said during the hearing that he trusted Mr Suraj as a “long-time friend”. TODAY’s report also showed that Mr Choong claimed ignorance when asked about a $13 million bond issued by Xtron and bought by CHC, as well as an email from Ms Serina Wee indicating that Ms Ho Yeow Sun’s – wife of CHC founder, Mr Kong Hee who is one of the six on trial – album sales were not enough to pay off the bond.

Additional reporting by ST revealed that Mr Choong was “invited to take up the Xtron directorship by Kong, even though the megachurch founder did not hold any appointments in the company”. But ST’s report also showed that Mr Choong’s ties with CHC go beyond dealings at Xtron. He had been a board member at CHC from 1999 to 2004 and is also a director at Attributes, CHC’s bookstore.
The reports from the mainstream media seemed to suggest that Mr Choong was altogether clueless about the operations of Xtron despite being a director.

Curiously, CHC’s in-house media team, City News, provided a different account of the proceedings. They reported that Mr Choong’s answer to the queries was to reply that “decisions were often made jointly, as the Crossover Project was a partnership between Xtron and CHC”. Another detail only reported in City News was the prosecution’s queries about why Choong signed off in several meeting minutes although the Immigration and Checkpoints Authority’s (ICA) records indicated that he was not in Singapore. Mr Choong’s reply was that the ICA’s records could be inaccurate(!) and he could not recall when exactly the discussions in question took place.

Apart from Mr Choong’s dealings, ST reports also reveal that Ms Ho allegedly received more than half a million in bonuses and advances which were disguised as “personal gifts” from sponsors in document records doctored by CHC leaders. In an incriminating email produced by the prosecution in court, finance manager of Xtron, Ms Wee wrote: “… I have come up with a proposed list of persons to talk to, to get them to write a letter to Xtron to say that their giving is meant for Sun personally … we don’t want Xtron to be seen giving money to her beyond her salary.”

City News was conspicuously silent on this matter regarding “personal gifts” to Ms Ho.

Can the prosecution make a convincing case that CHC staff’s involvement in Xtron goes beyond an innocuous business partnership – and by implication, that Xtron’s purpose is more than meets the eye? The trial continues…


(blogger's note: I can't help but wonder what the director actually knows about Xtron, what he does in Xtron, what was the criteria they were looking for in a director)

Church leaders 'controlled' Xtron (Singapore Law Watch, 27 August 2013)

Source: Straits Times

Date: 27 Aug 2013

Author: Feng Zengkun

Music firm was not independent, says prosecution

CITY Harvest Church leaders ran the show in all but name at Xtron Productions, a music company that they allegedly used to illegally divert church funds to.

This was the picture that prosecutors tried to paint on the opening day of the second leg of the criminal trial against church founder Kong Hee and five of his deputies.

They spent the day questioning one witness, Xtron director Choong Kar Weng, and tried to show that Xtron was not the independent entity it made itself out to be, but was controlled by church leaders; and Mr Choong, a mere puppet of the leadership.

The Malaysian businessman, for instance, was not aware of e-mails from the firm's accountants showing they consulted the megachurch on decisions ranging from its accounts to staff employment.

He signed incomplete documents - which had blank portions - related to bonds eventually sold by Xtron to the church, although when asked, he said this was done as he was not based in Singapore.

He also signed off on minutes of meetings even though immigration records apparently showed he was not in the country.
Xtron was set up as a music production house and concert organiser in 2003 by two of the accused, John Lam Leng Hung and Chew Eng Han, and Chew's wife Chong Lay Choo. It is one of two companies accused of helping the megachurch to funnel church funds to bankroll the music career of singer-pastor Ho Yeow Sun, who is Kong's wife. Xtron managed Ms Ho from 2003 to 2008 and provided audio-visual and real estate services to the church.

Yesterday, Mr Choong also admitted to being unaware of Xtron's day-to-day operations, leaving the job partly to City Harvest employee Mr Suraj - who goes by one name - whom he described as a "good friend". He was usually in Singapore only once every two weeks, so he needed Mr Suraj's help, he said.

 Asked whether this was a conflict of interest since City Harvest business made up a majority of the firm's income, Mr Choong said: "I've known Suraj for many years. I don't think he would do anything that will harm or is detrimental to Xtron."

Kong and five other church leaders allegedly misused $24 million of church funds to finance Ms Ho's singing ambitions, and purportedly took another $26 million to cover up the first amount. The state believes this was done partly through bonds issued by Xtron which City Harvest bought.

Asked about the bonds, Mr Choong said the firm and church were partners on the Crossover Project, which involved Ms Ho promoting Christianity through her secular pop music. Some time before the bonds were issued in 2007, the firm calculated it would need to raise an additional $13 million for the project, he said.

He said he did not know who came up with the bond idea, but "it was communicated" to him by Tan Ye Peng or Chew, who are accused of the misuse of funds. Mr Choong said the plan presented to him already had terms such as the bonds' interest rate, and he did not negotiate the terms nor seek independent legal advice on it.

"There wasn't any reason I would do that. These were people that I know, that I work with, that I trust. These are not strangers." He continues on the stand today.
zengkun@sph.com.sg

---

Background Story

NO REASON TO QUESTION
There wasn't any reason I would do that.
These were people that I know, that I work with, that I trust. These are not strangers.
- Xtron director Choong Kar Weng, on why he did not seek independent legal advice on the bond investment plan

---

Singer Ho's over $500k in bonuses, advances

POP singer Ho Yeow Sun received more than half a million in bonuses and advances, including a $30,000 birthday cash gift and an $80,000 "special performance bonus for hits in the US or the United Kingdom" in 2006.

 But to divert attention from some of these extra takings, leaders of City Harvest Church allegedly doctored documents to show that sponsors had given the money to her as "personal gifts".

These details emerged on the first day of the second leg of the trial involving six church leaders accused of misusing millions of church funds. The high-profile trial had resumed after a three- month break.

Yesterday, prosecutors tried to show that Ms Ho's former management company, Xtron Productions, was a puppet company controlled by the church's leadership, including founder Kong Hee, who is her husband.

The State is accusing the six of using Xtron and another firm, Firna, to funnel $24 million of church funds into paying for Ms Ho's secular pop music career, and then misappropriating another $26 million to cover that up.

Like at the first part of the trial in May, supporters started lining up outside the Subordinate Courts from as early as 4am for a spot in the 80-seater public gallery in Court 3.

A solemn Ms Ho showed up in court, hand-in-hand with her smiling husband for the first half of the day's proceedings.

One of the accused, Chew Eng Han, a church stalwart and its investment manager who had quit in June, kept his distance from the rest. He did not speak to the other five in the dock, and stood aside from them during breaks.

The trial continues today and prosecution witness Choong Kar Weng, Xtron's director and long- time church member, is expected to take the stand again.
MELODY ZACCHEUS
melodyz@sph.com.sg

---

Xtron director claims limited role in Crossover Project (Business Times, 27 August 2013)

Accused manipulated details of Xtron bond issue, prosecution attempts to prove

[SINGAPORE] Throngs of faithful supporters, family members and rubber-neckers crowded the Subordinate Courts yesterday as City Harvest Church (CHC) pastor Kong Hee and five other defendants charged with criminal breach of trust (CBT) turned up for the second tranche of the year's most high-profile hearing.

Court 3, which will host the proceedings for the next four weeks, was full to bursting as both concerned and curious individuals sought to ensure that they got a piece of the action.

Yesterday saw the prosecution attempt to make its case that church members had dishonestly misappropriated $13 million from the church's Building Fund to fund Kong's wife Sun Ho's music career - under the guise of buying up "sham" bonds from the music production house that managed her career, Xtron Productions.

Deputy public prosecutor Christopher Ong, who led the questioning yesterday, called up a string of emails between the accused, seeking to prove that they manipulated details of a bond issue by Xtron to CHC to suit their purposes.

Kong, deputy senior pastor Tan Ye Peng (Tan YP), former board member Chew Eng Han, board member John Lam Leng Hung, finance manager Sharon Tan, and former finance manager and board member Serina Wee, stand accused of misusing some $50 million of the church's funds to promote Ms Ho's music career through an elaborate series of round-tripping and sham bond transactions.

Chew, Wee and the two Tans are also charged with conspiring to falsify accounts.

The publicised split between the CHC defendants was obvious before yesterday's session began, as Chew - who announced in June he had cut off ties with the rest of the church - stood conspicuously apart from the other defendants, even while Ms Ho looked on from the public gallery in a show of support for her husband.

Chew had suggested on his blog that he left the church because his spiritual and moral principles did not align with theirs.

The hearing, the first tranche of which took place for a week in May, resumed yesterday with Choong Kar Weng, one of two directors of Xtron and a former CHC board member, on the stand.

Mr Choong testified that he had little idea as to whether Xtron had enough cash to redeem some $13 million worth of bonds it issued to the church in 2007, ostensibly to cover a shortfall of cash on the part of Xtron, when he signed off on the deal to issue the bonds. He added that he did not get involved with Xtron's bond issue, leaving this to several members of the church even though none of them held a position in Xtron.

"I'm just not familiar with all these bonds, the issuing of bonds," he said.

Mr Choong, a Malaysian with permanent resident status in Singapore, added that he relied upon the cashflow projections prepared by Wee, who provided accounting services to Xtron.

"Can you tell us who made the decisions when the bonds should be drawn out?" DPP Ong asked.

"I can't tell you who made the decisions. As I said, once the overall budget has been approved, I leave it to Serina (Wee)," Mr Choong said.

DPP Ong referred to an email Wee sent to Tan YP in 2007, which said: "This cashflow is based on the conservative estimate of 200,000 (Sun Ho) albums sold. With the proceeds . . . (we) will not be able to repay the $13 million bonds or have funds to do another album."

In another email, Wee said to Tan YP: "We based our projection on 200,000 copies of English Album (by Sun Ho) sold which will only yield us $2.7 million - hardly enough to pay off the $13 million. So we will need 10 years (as a repayment period for Xtron) as previously discussed, assuming no other new unbudgeted expenditure."

In yet another email called up by DPP Ong yesterday, Wee says to Tan YP about the repayment period: "Just that CHC can't keep having this $13 million being invested in bonds once the building is on the way and completed. Members will wonder why do we still need to raise so much money and then still have money to invest."

Mr Choong said Tan YP was involved in these discussions, even though he held no position in Xtron, because the church was invested in the success of Ms Ho's music albums.

"The Crossover Project (CHC's idea of using pop music for evangelism) is the partnership between Xtron and City Harvest. Xtron manages Sun (Ho), but there is a higher purpose where we want to touch lives. They (Kong and Tan YP) are not . . . I don't see them as working full-time for Xtron. In many ways, they are just fulfilling their parts in . . . from CHC point of view," Mr Choong said.
When asked why, if it was Xtron that needed money at the time, that it was Kong and Chew who proposed the idea of the bond issue to Mr Choong (instead of the other way around), Mr Choong said: "The Crossover Project is important to both Xtron as well as to CHC . . . it's just in the interests of both parties to solve this matter."

"How we work, for the Crossover Project, is that I personally don't get involved when the money was being sent. I left all those things to Serina (Wee)," he added.

The hearing resumes today, with Mr Choong remaining on the stand.