CHC trial: Former leader sued for $21m (TNP: 17th Dec 2014)

He is one of the church leaders involved in a criminal probe against the City Harvest Church (CHC) for criminal breach of trust.

Now, Chew Eng Han is facing a lawsuit from CHC for about $21 million that his investment firm, Amac Capital Partners, allegedly owes the church.

Chew, 54, the sole director of Amac, is also one of the six church leaders embroiled in a criminal trial, in which he is expected to take the stand when it resumes next month.

But Chew, in defence papers filed against the suit, claimed that he was merely an agent of the church in carrying out its "moneylending activities". This, however, was denied by CHC.

The New Paper obtained CHC's statement of claim, filed on Oct 10, and Chew's defence for this latest civil suit, which is fixed for a pre- trial conference next Tuesday. We also obtained CHC's reply to Chew's written defence.

CHC, represented by law firm JLC Advisors, claimed that Amac had approached and solicited it on March 17, 2009, to invest in a special opportunities fund.

In November that year, CHC invested $2.92 million into Amac. It was agreed that the money would be returned three months later with a 1.5 per cent interest, CHC claimed.

CHC also highlighted three other tranches it invested into Amac between November 2009 and May 2010, where interest rates of between 1 and 5 per cent were promised.

But when the church wanted its money back at the end of each of these four particular tranches, Amac could not pay up, CHC claimed.

For example, Amac asked to extend the return date of the first investment by six months.

CHC also claimed that Amac had on two other instances requested for more time regarding all four investment tranches.

REPAYMENT DATE

The repayment date was extended and the two parties agreed to increase the interest rate on the outstanding amount of about $18 million, CHC claimed.

For example, on Aug 31, 2010, the interest rate for the third and fourth investment tranches was increased from 5 to 7 per cent.

Even though Amac returned some of the outstanding investment money, the total money owed, including interest, amounted to $20.99 million by Oct 7 this year, CHC claimed.

CHC also claimed that Chew had proposed and signed a personal guarantee for the investments. This guarantee was executed on April 30, 2012, said CHC in its statement of claim.

Amac, which was unrepresented, was ordered to pay the $21 million on Oct 22 this year after the firm's non-appearance.

Chew, represented by lawyer A. Rajandran, has refuted most of the claims made by CHC.

City Harvest sues former fund manager (ST: 18th Dec 2014)

Chew and his firm sued for $21m in investments, including $4.6m interest

CITY Harvest Church (CHC) is suing its former fund manager and his firm for almost $21 million in unreturned investments, including $4.6 million in interest.

But Chew Eng Han, the sole director of Amac Capital Partners, insists the church had used his firm as a vehicle to lend out money.

He also claims that a personal guarantee he signed for the investments was just to "comfort" the CHC board, and he was promised that it would not be enforced.

Chew, who left CHC in June last year after 17 years, is one of six people who have been accused in a separate criminal case of misusing church funds and/or falsifying accounts.

They include the church's founder Kong Hee and former finance manager Serina Wee.

Chew, who is defending himself in the long-running criminal trial, will take the stand when it resumes on Jan 26.

On Oct 10, the megachurch filed court papers claiming that Amac, its investment manager, had "solicited" it to participate in its special opportunities fund on March 17, 2009.

But Amac requested more time to pay back money given in four tranches beginning between November 2009 and May 2010, along with the promised interest, the church added.

The church agreed, but also increased the interest rates.

It said that even though Amac returned some of the money, it was still owed $20.99 million.

Chew rejected the claims in his written defence filed on Nov 18.

According to him, the church had set up the special opportunities fund in 2009 so it could lend "surplus funds" to Mr Akihiko Matsumura of biotech firm Transcu Group, which has since changed its name to OLS Enterprise.

Chew also claimed that $350,000 was lent to former CHC investment committee member Charlie Lay on the instructions of the church's deputy senior pastor Tan Ye Peng - who is also one of those facing criminal charges.

Documents provided by Amac stating the firm's debt to CHC were merely "letters of comfort" to appease the church, Chew claimed.

The church's written reply to Chew's defence, filed on Dec 9, states it was never in the business of moneylending.

Instead, the investments were commercial transactions with guaranteed returns.

CHC also denied having any contact with Mr Matsumura and said it was not aware that money would be lent to him.

Mr Nichol Yeo Lai Hock of JLC Advisors, which is representing the church, declined to comment.

Chew is represented by Mr A. Rajandran for the civil suit, while Amac does not have a lawyer.

A pre-trial conference has been fixed for next Tuesday.

CHC trial: Major milestones (TNP: 8th Oct 2014)

About the case

City Harvest Church founder Kong Hee and five others are on trial, on charges of misusing church funds through sham bonds.

First, $24 million was allegedly used to fund the music career of Kong's wife, Ms Ho Yeow Sun, whose stage name is Sun Ho. Then another $26.6 million was used to allegedly cover up the first amount.

They are said to have done this through music production firm Xtron and glass manufacturer Firna, run by long-time supporters of the church.

Kong, former board member John Lam, finance manager Sharon Tan, former fund 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 have sought to show how Xtron and Firna directors simply did the accused's bidding.

The defence has argued that the transactions were legitimate, with the accused acting "in good faith" on the advice of lawyers and auditors. The trial will resume on Jan 26 next year.

It is already turning into one of the longest-running trials here. After 88 days, only three of the six accused in the City Harvest Church leaders' trial have wrapped up their defence.

SHARON TAN, 39

Background: Joined the accounts department of CHC in 2000 and worked her way up, eventually succeeding co-accused Serina Wee as finance manager in 2008. Had first attended service at CHC when she was 18.

Charged with: Three counts of CBT and four of falsifying accounts

Days on stand: 14

Key defence points:
Accused of omitting important details at meetings, she responded by saying this was how she had been taught to takes minutes by Wee.

She was assured five times there was no need to show the investment from the church in its fund manager, AMAC Capital Partners, to auditors because, by the time the audit started, the investment in AMAC would have been redeemed.

She was under the impression that the previous audit partners had blessed the CHC-Xtron bonds.

Prosecution's case:
Her role was not merely administrative, nor was she merely a listener who took instructions. She was an active and willing participant to round-trip church funds.

As the church's finance manager, she had a duty to ensure the church's accounts reflected the true nature of the round-tripping transactions, but instead, she instructed her staff to falsely record these transactions as investments.

Case highlight:
Tan cried three times in court.

The third time was when she was pressed by Chief Prosecutor Mavis Chionh on whether the allegedly falsified board meeting minutes would have deceived the auditors.

Tan struggled to answer, even prompting the judge to intervene.

She eventually replied: "Your Honour, it might be seen like they are being deceived. But, Your Honour, it wasn't my intention."

She then broke down and proceedings were adjourned for 40 minutes.

 
JOHN LAM, 46
Background: He's a former City Harvest Church (CHC) board member, who served as treasurer and secretary. Also sat on the church's audit and investment committees. A certified public accountant and chartered financial analyst.

Charged with: Three counts of criminal breach of trust (CBT)

Days on stand: 10

Key defence points:
Lam was there only on an ad hoc basis.

He did not run the Crossover Project and he was not part of music production firm Xtron.

Whenever there was an accounting issue, he became involved because he is an accountant.

For the Xtron bond, he believed from information he had that repayment would be made through Sun Ho's album sales.

Prosecution's case:

He knew the Building Fund could not be used to fund the Crossover Project directly, and that was why it had to be disguised as a legitimate investment.

He is now trying to disassociate himself from the transactions and instead has been pushing the blame to some of the co-accused. For example, he blamed Sharon Tan for wrongly recording minutes and said Chew Eng Han told him about the transactions.

His defence has not only been untenable, it is deeply cynical based on his status within the church, his financial expertise and the documentary evidence and e-mails presented so far.

Case highlight:

Lam had said it was former CHC investment manager and co-accused Chew's idea to set up Xtron Productions.

But Chew shot back at Lam during the cross-examination: "I didn't approach you. I didn't have this grand vision of a media events company. I'll put it to you that the evidence you have given to the court that it was my idea is false."

Lam later admitted: "Based on this e-mail (which was presented as evidence by Chew), it will suggest that it was not you who thought of the idea to set up Xtron."


KONG HEE, 50

Background: Founder and senior pastor of CHC. He was the CHC board president from 1992 until 2011, when he stepped down.

Graduated from the National University of Singapore in 1988 where he majored in computer science and information systems.

Charged with: Three counts of CBT

Days on stand: 19

Key defence points:

He only handled the budgeting and liaising for the Crossover Project. He is not strong in financial knowledge.

He left the financial structuring to lawyers and auditors, and the management board, because they were more well-versed than he was to make decisions.

Post-2006, when he relocated overseas, he was more hands off.

Prosecution's case:
From the inception of the Crossover Project, he was both the person in charge and the ultimate decision-maker.

He engaged in a series of lies and deception over the years to conceal and facilitate the unauthorised misuse of the church's building fund by him and his co-accused.

He knew that channelling the building fund out of the church through these sham transactions was in breach of the permitted uses of the fund, which had been entrusted to him as a board member, specifically as president of the CHC board.

Case highlight:

When Chew, who was representing himself, cross-examined his former spiritual mentor, he told Kong: "I spoke to you... that you've got to stop shouting so loud, acting on the stage.

"You have still continued to do the opposite and to portray yourself as heroic, a responsible pastor, when, actually, you're not." Kong replied: "I don't try to portray myself as heroic, neither do I shout loud on the stage or act on the stage."

Key witness

HO YEOW SUN, 43
The wife of Kong Hee and co-founder of City Harvest Church (CHC), who goes by the stage name Sun Ho.

She was a member of the CHC board from 1993 to 2006.

She is also the central figure in this trial as $24 million of church funds was allegedly misused to fund her singing career.

Ms Ho has been based largely in the US since 2003 to pursue her music career.

She has released several singles in the US, including chart-topping dance numbers such as One With You, Without Love and Fancy Free.

Former fund manager Chew Eng Han has called her as one of his defence witnesses and she is expected to take the stand after the hearing resumes next year.

Others taking stand next year
CHEW ENG HAN, 54
Background: Became a City Harvest Church (CHC) member in 1995 and was on its board from 1999 to 2007, when he took on the role of the church's fund manager.

He reportedly left the church in June 2013, after 17 years, citing "a collision of primarily spiritual and moral principles".

Charged with: Six counts of criminal breach of trust (CBT) and four of falsifying accounts.

 
TAN YE PENG, 41
Background: A deputy senior pastor of CHC, who was first appointed to the board in 1995, and was elected as vice-president in 2007.

Also sat on the investment committee.

Charged with: Six counts of CBT and four of falsifying accounts.

 
SERINA WEE, 37
Background: Joined the accounts department of CHC in 1999 and was promoted to finance manager in 2005.

She was also a member of the CHC board from 2005 to 2007, when she left to set up her own accounting firm.

She is the administrator of the Crossover Project.

Charged with: Six counts of CBT and four of falsifying accounts.

About the case
City Harvest Church founder Kong Hee and five others are on trial, on charges of misusing church funds through sham bonds.

RELATED STORIES

• All related stories on the City Harvest Trial

First, $24 million was allegedly used to fund the music career of Kong's wife, Ms Ho Yeow Sun, whose stage name is Sun Ho. Then another $26.6 million was used to allegedly cover up the first amount.
They are said to have done this through music production firm Xtron and glass manufacturer Firna, run by long-time supporters of the church.
Kong, former board member John Lam, finance manager Sharon Tan, former fund 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 have sought to show how Xtron and Firna directors simply did the accused's bidding.
The defence has argued that the transactions were legitimate, with the accused acting "in good faith" on the advice of lawyers and auditors. The trial will resume on Jan 26 next year.
It is already turning into one of the longest-running trials here. After 88 days, only three of the six accused in the City Harvest Church leaders' trial have wrapped up their defence.

Photo Gallery: 

5 things to know about the City Harvest trial

Click on thumbnail to view photos. Source: 

The Straits Times, The New Paper, City Harvest Church

View more

SHARON TAN, 39
Background: Joined the accounts department of CHC in 2000 and worked her way up, eventually succeeding co-accused Serina Wee as finance manager in 2008. Had first attended service at CHC when she was 18.
Charged with: Three counts of CBT and four of falsifying accounts
Days on stand: 14
Key defence points:
Accused of omitting important details at meetings, she responded by saying this was how she had been taught to takes minutes by Wee.
She was assured five times there was no need to show the investment from the church in its fund manager, AMAC Capital Partners, to auditors because, by the time the audit started, the investment in AMAC would have been redeemed.
She was under the impression that the previous audit partners had blessed the CHC-Xtron bonds.
Prosecution's case:
Her role was not merely administrative, nor was she merely a listener who took instructions. She was an active and willing participant to round-trip church funds.
As the church's finance manager, she had a duty to ensure the church's accounts reflected the true nature of the round-tripping transactions, but instead, she instructed her staff to falsely record these transactions as investments.
Case highlight:
Tan cried three times in court.
The third time was when she was pressed by Chief Prosecutor Mavis Chionh on whether the allegedly falsified board meeting minutes would have deceived the auditors.
Tan struggled to answer, even prompting the judge to intervene.
She eventually replied: "Your Honour, it might be seen like they are being deceived. But, Your Honour, it wasn't my intention."
She then broke down and proceedings were adjourned for 40 minutes.
- See more at: http://news.asiaone.com/news/singapore/chc-trial-major-milestones#sthash.Ts9YaFn3.dpuf

30 September 2014 – Sharon’s Re-examination (Part 1) - (MrsLightnFriends: 13th Oct 2014)

Prosecutor’s Position

Prosecutor’s case is that CHC monies were used to generate the false impression that Firna had redeemed the bonds.

CHC’s monies purportedly invested in T10 and T11 ($5.8M and $5.6m total $11.4m) of the SOF via AMAC was actually round-tripped to redeem the Firna bonds.

ARLA (Advance Rental Licence Agreement) was a sham device for Xtron to use the monies to purchase $11.4m of Xtron-Firna bonds, which monies would in turn be channeled through Firna, UA and AMAC back to CHC to complete the round-tripping.

Sharon’s evidence in court

It was Sharon’s understanding that Xtron bonds had to be removed by the next financial year and for the Firna bond. The auditor would want to look into the details and nature of the Firna bonds and there will be a valuation that would needs to be done.

Sharon testified that Eng Han told her of the new redemption plan and her involvement was to pass the massage to John Lam and Serina. She was concerned about the Related Party Transaction (RPT) disclosure obligation that might arise if Xtron buys back the rights. This is because Sun is the wife of Pastor Kong, and it will be disclosed under CHC’s book. She understands that the Crossover Project is something that the church wanted to be very discreet about, to keep it as secular as possible.

The board was aware of the Xtron and Firna bonds and the board was aware of Mr Sim’s issue and therefore Mr Chew Eng Han was proposing a solution to deal with the issues raised by Mr Sim. The proposed solution was presented to the board on 18 July 2009.

There is the handwritten notes took by Sharon at the board meeting on 18 July 2009.  According to Sharon’s evidence, Mr Chew Eng Han presented the redemption plan to the board. Sharon copied down the diagram in her handwritten notes.

Present in the board meeting on 18 July 2009
Kong Hee – President
Tan Ye Peng – Vice President
Nicholas – Treasurer
Suraj – Secretary
Aries – Board Member
Chiang Pak Shane – Board Member
Choong Tsih Ming – Board Member
John Lam – Board Member
Lee Tat Haur – Board Member
Martin Ong – Board Member

Invited to attend
Chew Eng Han – Fund Manager
Sharon Tan – Finance Manager

Redemption plan diagram on 18 July 2009
(Note: This is not the original diagram in Sharon’s hand written notes.)

Looking at the diagram, it showed the series of planned transactions between Pacific Radiance, AMAC, Firna, Xtron and CHC.

The proposal was for the Firna bonds, Pacific Radiance (John Lam was the CFO at that time) to invest $17m into AMAC and AMAC could in turn loan the $17m to Firna. With the money from AMAC, Firna would redeem the CHC Firna bonds. The Xtron bonds would still be redeemed using the advance rental from CHC.

There are other handwritten notes on 12 September 2009. Sharon copied down the redemption diagram in her handwritten notes.

Redemption plan diagram on 12 September 2009
(Note: This is not the original diagram in Sharon’s hand written notes.)

The following is what Sharon wrote to John Lam and Serina Wee in her email dated 1 May 2009:

Dear John Lam and Serina,
Eng Han told me of a new plan (which is back to the very original plan) which he wants to know your views:
1. CHC pays upfront rental to Xtron. Xtron will use upfront rental to buy shares in JV Co. which will buy Palm Oil. No need to transfer Building Fund.
2. Loan in JV Co. will be serviced by EBIDTA from the other operations of the building.
3. Xtron is also a lessee of the JV Co. Xtron will sub lease to CHC.
4. As there wil be a lot of upfront rental, Xtron can redeem the bonds partially. The other part of the bonds will be redeemed, hopefully, by selling RW.
5. There is also a further plan for JV Co. to get a listing via reverse takeover (RTO). Then hopefully, XPL can sell Riverwalk to the JV Co.
6. Xtron will then use the proceeds to redeem the bonds.
7. Preference is to sell Riverwalk to the listed Co. and clear the bonds for Riverwalk.
8. May use upfront rental to clear Firna bonds too
9. Xtron to buy back rights to Sun from Ultimate Asset.
10. Ultimate Asset pays back Firna and Firna pays back CHC.

DPP’s put statement on 26 September 2014 DPP: “I put it to you, Ms Tan, that when we look at the differences between the official minutes of meeting and what you claim to be your contemporaneous handwritten notes of that meeting. It is clear that your claims, that the handwritten notes in CH-49b (18 July 09 diagram) and CH-50b (12 September 09 diagram) reflect accurately the discussions at the board those meetings, cannot be true. DPP: “I put it to you that even if it true that the board was told of the ARLA after 18 July 2009, the board was not told of the entire series of round-tripping transactions which we see set out in detail in the hand-drawn diagrams in CH-49b (18 July 09 diagram) and CH-50b (12 September 09 diagram).

Sharon explained that she took the notes during the board meeting because she wanted to remember what was had been discussed in the board. After she took the note, she put it in her personal file first and prepared the minutes later.

Ramesh: “You prepared the minutes later. What did you do with the minutes that were prepared in relation to this board meeting?”

Sharon: “Your Honour, after I prepared these minutes, I submit to Suraj for approval.”

Ramesh: “What title did Mr Suraj hold?”

Sharon: “Your Honour, Suraj is the board member as well as a board secretary of City Harvest.”
The handwritten notes shown evidence that the agenda stated has been discussed during the board meeting.

One of the items discussed in the board meeting of 18 July was about Palm Oil. It was in her hand written notes.

Ramesh opened an email evidence to strengthen Sharon’s position.

Sharon Tan wrote to Tan Ye Peng and copied to Chew Eng Han on 19 July 2009.

She wrote:

Dear Pastor Tan,This is a consolidated cash flow for our funds.
Eng Han mentioned in the Board meeting that the amount to put into Palm Oil is $40m and Sport Hub is $10m…

Ramesh: “I have looked through the minutes and I have not seen anything about $40m and Sport Hub being mentioned…?”

Sharon: “Yes, your Honour, it’s not minuted.”

Ramesh: “Why?”

Sharon: “Your Honour, because these are confidential information that I received instruction from the board not to minute down.”

Ramesh: “Why?”

Sharon: “Your Honour, because this has to do with building project, which during the search itself, it is a very sensitive period of time for negotiation and the board doesn’t want the negotiation itself to fail.”

——

The DPP used the new evidence presented on 22 September 2014, which is the blackberry memo extracted from Sharon Tan’s blackberry phone to build the case.

There are 72 images extracted from the blackberry memo and some messages are being redacted. According to the DPP, the content was redacted simply because it was not relevant to the case.

On 30 September 2014, Mr Ramesh introduced the full version of the blackberry memo to cross-examine Sharon. He brought Sharon through images 29 to 35 and put the entire conversations in its proper context.

At that point in time, on 18 July 2009, when the redemption plan was brought up to the board for approval Sharon was concerned about the audit issue.

Image 28
Sharon was talking about solving Firna by October and that being an audit point if not solved. Xtron was not mentioned.

Image 29
Eng Han said to Sharon: “I have a solution for the Xtron and Firna bonds regardless of whether we get the building by October 2009.”

Ramesh: “Eng Han is talking to you. Who was formulating this plan, Ms Tan, this solution?”

Sharon: “Your Honour, it was Eng Han.”

Image 30
Eng Han: “It has to do with prepayment Xtron will contract with CHC to provide a minimum 5k seater every weekend for say the next 25years. Assuming a yearly rental of $4m, total is 100 million. We then discount it back at a 5 percent yield, and the discounted present value is the lump sum payment that CHC makes to Xtron.

Image 31
Xtron is free to use the money to invest in a building or whatever investment to earn a yield so that it can fulfill its commitment to CHC to secure a place.
From this lump sum, Xtron redeems the $21m bonds, it also buys over the rights from Ultimate Assets (UA) to the rights to the crossover for $17m.
Mr Chew Eng Han then goes on to say: “After spending the $38m, the leftover is invested in the building which should earn a yield of 10 percent at least and that will help Xtron’s cashflow to meets its future commitment as it pays rental for CHC.”

Image 32
Eng Han said: “We will pass a board resolution to state the reason why we do this. Because the board recognizes that it is hampered from owning a building and is trying to replicate the scenario by this contract with Xtron.”
Eng Han said: “To make it more attractive, we can insert another condition that Xtron will refund a percentage of any potential total gains it makes from this contract.”

This is after 18 July 2009, when the Suntec bid had failed despite the fact that the Church had bid a larger sum of money.

Ramesh: “Mr Chew is telling you all of this. He describes the plan, he describes what it is intended to achieve, and then he says, “Let’s put it before the board to pass it and minute it.” What did you think was going on in terms of the legality, legitimacy of this transaction this plan?”  He comes up with a plan, and he says, “Put it before the board, pass a resolution, minute it”, what did you think Mr Chew was doing?

Sharon: “Your Honour, Mr Chew was suggesting a plan and to me that is above board and legal because he’s suggesting to pass the resolution to bring it up to the board for approval before going ahead with all the legal documentation.”

Ramesh: “Eng Han goes on in image 32 to make it more attractive, we can insert another condition…. Mr Chew is looking out for whose interest in this transaction?”

Sharon: “Your Honour, Eng Han was looking out for the interest of the church.”

Image 33
Eng Han: “So we try to replicate a deal that makes it as close to the scenario as if CHC owned the building.”
Eng Han: “The reason for doing this is real that CHC can’t get a building as we experienced it many times with the government bias.”

Image 34
Eng Han: “The deal is on regardless of whether Xtron gets a building now. It has its own time to get a good land and building to invest in and meanwhile before it finds one it just has to make sure it finds a place to rent.”
Eng Han: “We document down all the difficulties we face in getting a land in the board minutes and pass the reso.”

On 25 September 2014, the DPP suggested to Sharon that the image 29 and 30 are evidence of the fact that the four of the accused (Sharon Tan, Eng Han, Ye Peng and Serina Wee) were planning or using ARLA as an excuse to redeem bonds, that it was not about buying property, not about securing a site for the church.

DPP’s put statement on 25 September 2014 DPP: “We see at image 29 that Eng Han and you are talking about the redemption of the Xtron and Firna bonds. Eng Han tells you that he has a solution. He goes on, at image 30, to tell you that this solution is basically to do with rental prepayment, Yes?”  Sharon: “Yes, your Honour.” DPP: “If you look back at image 29, we see that Eng Han tells you that this solution for the Xtron and Firna bonds is regardless of whether we get the building by then. So this exchange between Eng Han and you is further evidence of the fact that when the ALRA was eventually planned by the four of you, bidding for a building was not a concern; the concern was to redeem the Xtron and Firna. Correct?” Sharon: “Your Honour, I disagree, firstly, because the plan of ARLA was not conceived by me. Secondly, Eng Han explained to me that the need for ALRA is real and there is a need for the church to mandate Xtron to secure a building for the church.”

Ramesh: “So tell us, Ms Tan was the ARLA about buying property or about redemption of bonds or what? You tell us.”

Sharon: “Your Honour, it has been presented to the board as well as to myself that the ARLA is needed to be given to Xtron for the property, because there is a real need, which was stated by Eng Han in this BB messages that the time is running out and there are not a lot of options for the church. So Xtron is given a responsibility to secure a place for the church, and ALRA, itself, is needed and important to hold Xtron responsible to secure a place for the church, your Honour.”

Ramesh: ‘So the suggestion by the prosecution that it’s a sham, or it’s an accuse, a short response, Ms Tan, to that suggestion?”

Sharon: “Your Honour, I disagree with the prosecution’s case that the ARLA is a sham.”

On 22 September 2014, the DPP suggested to Sharon: “My suggestion is that his proposal of documentation is really intended only as a cover story, to provide an appearance of legitimacy for these transactions. It’s clear that you know, because you go on to express further worry that, “But Mr Sim will know, the same money given to Xtron is being used to buy Firna contract.” Do you agree that that is what is going on here between you and Mr Chew?”

Ramesh brought Sharon to see image 36 and image 38

Image 36
Eng Han said: “We have a sound reason to do this, just document it all down in our minutes. We get lawyers to draft a agreement between CHC and Xtron.”

Ramesh: “I would like you to respond to the prosecution’s suggestion that the documentation of the transaction by the lawyers is nothing but a cover story.”

Sharon: “Your Honour, I disagree because it was already explained by Eng Han and it was also the board’s agreement and view that there is a very sound reason, a very valid reason, and a need for the church to give advance rental to Xtron, to give Xtron the mandate to secure a building for the church.”

Image 38
Sharon: “OIC… so u told Pastor Tan all the above already?”
Eng Han said: “Yes I told him and Pastor Kong…”

Ramesh: “Why was it important to you that Eng Han had briefed Pastor Tan?”

Sharon: “Your Honour, it’s important to me because Pastor Tan is the second in line after Pastor Kong, and he has been in all board meeting leading the discussion, so I wanted to make sure that Pastor Tan is aware about it.”

CHC trial: 'Related party transactions' were main concern, says church finance manager (CNA: 30th Sept 2014)

SINGAPORE: Taking the stand for the 13th day, City Harvest Church finance manager Sharon Tan on Tuesday (Sep 30) reiterated that her main concern was about "related party transactions" in the church's investments. The 39-year-old said so in response to questions from her lawyer, Senior Counsel Kannan Ramesh, during re-examination.

Tan is one of six leaders charged with misusing millions of dollars of church funds to boost the career of singer Sun Ho, the wife of church founder Kong Hee. They are accused of doing so through sham bond investments in two companies, production house Xtron and glassware manufacturer Firna, and then covering them up.

On Tuesday, the court was shown an email dated May 2009, where fund manager Chew Eng Han, who is also one of the accused, had proposed a plan for the redemption of Xtron bonds.
This involved the church paying Xtron a large amount as advance rental for it to secure premises for church services and activities. The advance rental could then contribute towards redemption of the bonds.

Under the plan, part of the advance rental would also be used to buy the artiste management rights for Sun Ho from Ultimate Assets, a company owned by Indonesian businessman and church member, Wahju Hanafi.

Ho's recording and launching of secular music albums was part of the church's Crossover Project, which aimed to evangelise and influence those who would never choose to step into a church.

Tan had understood that any links between the project and the church would have to be discreet for the project to be "as secular as possible" so that it would not be jeopardised. As such, she had concerns that the advance rental from the church that was used to buy the rights from Ultimate Assets, would be seen by auditors.

Tan said that this may give rise to the issue of related party transactions, which would lead to disclosure of the links between the church and companies such as Ultimate Assets.

City Harvest Trial: Manager plays down her 'round-trip' role (ST: 1st Oct 2014)

Sharon Tan points out repeatedly that proposal was ex-fund manager's

City Harvest Church (CHC) finance manager Sharon Tan repeatedly downplayed her role in alleged plans to "round-trip" church funds and throw auditors off.

For instance, it was co-accused Chew Eng Han who had made various suggestions and come up with the eventual proposal on how to purge the bonds held by the church in two firms, Tan told the court at least six times yesterday.

While being question by her lawyer, Senior Counsel Kannan Ramesh, the 39-year-old also repeated earlier claims that she had been consistently "concerned" and focused on the "audit issue" the church was facing.

Tan is one of six people, including founding pastor Kong Hee, accused of misusing $50 million of church funds to boost the music career of Kong's wife, Ms Ho Yeow Sun, and covering up the misuse.

The prosecution believes that all of the accused, except Tan, channelled money from the church's building fund into sham bond investments in Xtron, which is Ms Ho's management company, and glass manufacturer Firna.

Four of them, including Tan and Chew, the church's former fund manager, then allegedly devised transactions the clear the sham bonds from CHC's accounts to mislead auditors.

Tan also made various claims about her state of mind at the time, including how she had felt assured that the plans were in the church's interest, in part because co-accused and deputy senior pastor Tan Ye Peng was in the loop.

Chew had also assured her that he had made both Tan Ye Peng and Kong aware of the plans, she said, adding: "That's why I was comforted and assured that we can go ahead with the plan."

Tan, who was taking the stand for the 13th day, also rejected the prosecution's allegation that "advance rental" of $15 million transferred from the church to Xtron had been a "cover story".

The aim, said the prosecution, was to help Xtron pay back its "debt" to the church held in the bonds, in turn allowing the sham bonds to be cleared from CHC's books.

Instead, the payment would help to fill a "real need" to help Xtron secure premises the church needed for its services, she said.

Tan also disagreed with the prosecution's earlier suggestion that she had wanted to hide from auditors what the church's money had been invested in, maintaining that she had been troubled by the "audit issue".

The trial resumes tomorrow with Mr Ramesh expected to finish re-examining her.

City Harvest Trial: Accused wrote of round-tripping in e-mail (ST: 30th Sept 2014)

Prosecution says this shows finance manager knew what was going on

City Harvest Church (CHC) finance manager Sharon Tan was aware of what "round-tripping" meant and had even used the term in an e-mail to her three co-accused discussing the church's finances, the court heard yesterday.

In the March 22, 2010 message referred to by the prosecution, Tan had written: "By right, if this (sic) funds is a round trip and can come back to CHC, we can cut down by one (round of fund raising)."

This was part of discussions among the four, the prosecution charged, on how to raise money for City Harvest's building fund and channel surplus generated in the process through various entities and back to the church.

Deputy Public Prosecutor Mavis Chionh said Tan had shown "clearly" in the discussion that she knew what was happening.

But Tan, 39, disagreed, later saying: "The main aim was to decrease the number of rounds of building fund campaign, and to raise as little as we can."

Tan is one of six people, including founding pastor Kong Hee, accused of misusing $50 million of church funds to boost the music career of Kong's wife, Ms Ho Yeow Sun, and covering up the misuse.

The prosecution believes that all of the accused, except Tan, channelled money from the church's building fund into sham bond investments in Xtron, which is Ms Ho's management company, and glass manufacturer Firna.

Four of them, inclduing Tan, then allegedly devised transactions to clear the sham bonds from CHC's accounts to throw auditors off the scent.

Yesterday, the March 22 e-mail was among several the prosecution cited to show how the four were trying to raise building fund money, and channel the surplus to pump into Xtron, to clear its liabilities.

In one message, Tan had written to her predecessor and co-accused Serina Wee: "Will we still be doing this 10 years later? Hahahahaha..."

Ms Chionh yesterday said this showed, among other things, that Tan was aware that the "solutions" the four were planning were simply "buying time" for Xtron, so as to "kick the problem down the road", and, in turn, give themselves breathing space to find more ways to channel yet more church funds into the firm.

Tan disagreed, calling it a matter of "scenario planning".

The prosecution finished cross-examining Tan yesterday.

The trial continues today, with her lawyer, Senior Counsel Kannan Ramesh, expected to continue cross-examining her.

City Harvest trial: Cross-examination of church finance manager wraps (CNA: 29th Sept 2014)

SINGAPORE: The prosecution wrapped up its cross-examination of City Harvest Church (CHC) finance manager Sharon Tan on Monday (Sep 29), reiterating its case that she had conspired with other leaders to plan and execute a series of "round-tripping transactions".

Tan, who took the stand for the 12th day, is one of six leaders charged with misusing millions of dollars of church funds to boost the career of singer Sun Ho, the wife of CHC founder Kong Hee. They are accused of doing so through sham bond investments in two companies, Xtron and Firna, and then covering them up through a series of what the prosecution described as "round-tripping transactions".

These transactions would create the false impression that the sham bonds had been redeemed when the redemption was actually financed using the church's funds, the prosecution has charged.

On Monday, the prosecution showed the court an email thread dated November 2009 in which Tan and her co-accused, Chew Eng Han and Tan Ye Peng, discussed how much money the church needed to raise to rent space at Suntec Singapore Convention and Exhibition Centre.

In what the accused called "scenario planning", S$100 million was budgeted for the church to pay rental for the next 10 years to production company Xtron. However, Tan pointed out that the church would need to raise S$52.4 million to "cover" Xtron's "deficit".

This was because the church had earlier paid Xtron a huge amount as advance rental for it to secure premises for church services and activities. Tan said that part of the advance rental had already been spent on various transactions, including S$11.4 million in bonds by glassware manufacturer Firna.

She then proposed that the deficit be raised via the church's "Arise & Build" fund-raising campaigns. She also suggested that the church makes more payments to Xtron, for various services such as event management. Tan clarified in court that it was a "worst-case scenario planning", with the assumption that Xtron did not generate any income from producing Sun Ho's album.

'SCENARIO PLANNING' CLAIM, NOT A MAGIC WAND: PROSECUTOR

Chief Prosecutor Mavis Chionh however, said that the assumption was not stated in the email and that it was "funny" that Tan thought "waving the words 'scenario planning' around is like a magic wand that can somehow wave away all this incriminating information here".

Ms Chionh said the emails reveal that Tan was intent on making sure that the church makes payments to Xtron to "cover up the hole" or the deficit. She pointed to a subsequent email dated December 2009 from Tan to co-accused Serina Wee, who was handling the Xtron accounts then.

Tan told Wee that having redone the calculations, the deficit for the rental was S$44 million and not S$52.4 million. She had also written: "Will we still be doing this 10 years later???? Hahahahaha ..."

The prosecution alleges that "this" refers to finding ways and "doing scenario planning" to cover Xtron's deficit. However, Tan told the court that she was referring to Xtron working closely with the church to plan its cash flow.

Ms Chionh said that Tan knew the proposals to cover the deficit was just to buy time for Xtron so that she could "kick the problem down the road" and gain herself more time to "find more solutions to channel more of the church's funds to Xtron".

Ms Chionh also charged that Tan and Wee as well as Chew Eng Han and Tan Ye Peng were constantly working on ways to channel church monies to Xtron to make sure it could meet its liabilities. Following the end of the prosecution's cross-examination of Tan, her lawyer, Senior Counsel Kannan Ramesh will continue his re-examination on Tuesday.

City Harvest trial: Finance manager concedes her action may have deceived auditors (ST: 26th Sept 2014)

SINGAPORE - City Harvest Church finance manager Sharon Tan broke down on the stand on Friday, even as she conceded that information she had inserted into church board meeting minutes may have deceived auditors.

Choking up under cross-examination by Deputy Public Prosecutor Mavis Chionh, the 39-year-old said: "Your honour, it might be seen like they are being deceived, but... it wasn't my intention."

Tan had inserted information into the document, dated Sept 12, 2009, that the board had approved "advance rental" payments to music production firm Xtron of $7 million per year for eight years - part of a plan to purge bonds held in the firm from the church's books.

The court heard that the information was false, as no such approval was received from the board on that day.

Tan is one of six people, including founding pastor Kong Hee, accused of misusing $50 million of church funds to boost the music career of Kong's wife, Ms Ho Yeow Sun, and covering up the misuse. The prosecution believes that all of the accused, except Tan, channelled money from the church's building fund into sham bond investments in Xtron, which is Ms Ho's management company, and glass manufacturer Firna. Four of them, including Tan, then allegedly devised transactions to clear the sham bonds from CHC's accounts to throw auditors off the scent.

Friday's hearing has centred on the church's book-keeping, with Tan taking the stand for the tenth day. This is the third time she has broken down on the stand.

CHC finance manager asked about altered minutes for board meeting (CNA:26th Sept 2014)

SINGAPORE: City Harvest Church finance manager Sharon Tan broke down on Friday (Sep 26), her eleventh day on the stand.

The 39-year-old was being questioned by Chief Prosecutor Mavis Chionh about the minutes that she had recorded of a board meeting  on Sep 12, 2009.

The minutes stated that the board had considered and approved advance rental to be paid to Xtron Productions at a rate of S$7million per annum over eight years, so the production house could help the church secure a venue for its growing congregation. But Tan admitted that the figures had not been brought up at that meeting and was only reported to the board after Sep 12, 2009.

Ms Chionh had questioned why it was difficult for Tan to reflect decisions that were made at the meeting in the meeting's minutes: "Why do you have to go back in time to insert the information in an earlier set of minutes?"

To that, Tan replied that the board had been informed at the meeting of the plan for advance rental to be paid and that "in essence, it was the same".

Ms Chionh then pressed on: "If that's what they said from the minutes, that the auditors understand that the board approved S$7million a year for eight years on Sep 12, 2009, that understanding has to be false, because no such approval of those figures happened on Sep 12, 2009. Correct?"

Tan said she could not "agree fully", although the prosecution repeated the question a number of times. Presiding Judge of the State Courts See Kee Oon then intervened: "If I read that statement there, I would understand that those figures were approved on Sep 12, 2009. Does this help you to understand the question? So what is your answer?" That was when Tan conceded the point. 

The prosecution then put its case that Tan inserted the information to deceive the auditors. Tan said: "It might be seen that they (the auditors) are being deceived but it wasn't my intention."

Her voice then broke as she cried, and the court session was temporarily adjourned. Since taking the stand, this is the third time that Tan has broken down in tears.

After the break, the prosecution continued its cross-examination, claiming the church's board had not told about the full advanced rental arrangement, as well as other transactions during the board meetings.

It is the prosecution's case that Tan, together with three other accused, Chew Eng Han, Serina Wee and Tan Ye Peng, had conspired to devise the series of "round-tripping" transactions, creating the false impression that sham bonds in Xtron and Firna had been redeemed, to defraud auditors into believing that the bonds were not an issue.

The trial continues on Monday.

25 September 2014 – DPP cross-examined Sharon (Morning session) (MrsLightnFriends: 26th Sept 2014)

Advance Rental

This is another challenge for me to write in my blog. I will call it the “two plans running in parallel” challenge. If you have been following my blog I only wrote about Eng Han’s cross-examination of Sharon on Kong’s confession letter.

This page is about DPP’s cross-examination of Sharon on 24 and 25 September 2014 (Morning session) and Eng Han’s cross-examination of Sharon on 19 September 2014.

When Eng Han cross-examined Sharon, he asked Sharon to open an email dated on 24 April 2009, claimed by Sharon Tan that Eng Han is aware of the content of the email.

Sharon’s Evidence-in-Chief on 16 September 2014

I need to bring you back to what happened during Sharon’s EIC on 16 September 2014. Mr Ramesh brought up a new email evidence in court. This is an email dated on 25 April 2009 that Sharon sent to Pastor Tan and Jacqueline Tan and forwarded to Serina Wee.
 

The content of the email is about John Lim’s concerns after he attended EOGM. Sharon wrote from A to 0 (15 concerns).

Sharon said that at that point in time, she was the finance manager of CHC and she should be concerned with matters relating to the finance or the accounts. But in terms of investment and bonds, she was not involved in structuring it or planning it and so she brought up to the respective persons to find a solution for what was listed in the email.

When Mr Ramesh asked her who are those respective persons? Sharon said it would be Pastor Tan, Serina and Eng Han.

Judge asked: “Sorry, Ms Tan, before we move on to that. Your last answer, you said that it would be Pastor Tan, Serina and Eng Han.”

Sharon: “Yes”

Judge: “Is Eng Han copied in this email?”

Sharon: “No, your Honour, but at that point in time I was aware that this matter was brought it up to him.”

Sharon’s EIC said that scenario 2 (See the table below) was a secondary consideration because of John Lim’s email.

Eng Han’s cross-examination of Sharon Tan on 19 September 2014

Note the sequence of events Eng Han brought Sharon through

1. Email dated 9 April 2009 sent by Sharon Tan to Ye Peng and John Lam.

One of the point in this email is Mr Sim Guan Seng hopes to see this Xtron issue being solved in this FY.

2. Sharon had the strong impression given by Mr Sim Guan Seng, that he wants the bonds off the book.

3. This audit issue related to valuation of the bond.  Sharon conveyed “Mr Sim Guan Seng wants the bonds off the book” to Eng Han.

4. Email dated on 25 April 2009 sent by Sharon to Pastor Tan and Jacqueline Tan and forwarded to Serina Wee. (John Lim’s 15 concerns)

The following email events triggered after 25 April 2009

Email Date	Property of Interest	Eng Han’s involvement	Who was involved in the planning
25 April 2009 E-501	Advance Rental with scenario 1 and scenario  2 For Riverwalk (Sharon Tan said typo error should be Expo)	Not in the loop	Sharon Tan, Jacqueline TanTan Ye Peng
2 May 2009 E-502	Advance Rental for Suntec	Eng Han suggested upfront rental to buy shares in JV Co which will buy Palm Oil (Suntec)	Sharon said EH spoke to her on the phone and she typed out Eng Han’s suggestion. Sharon sent to John Lam and Serina Wee.Then on 2 May 2:58pm Serina Wee sent to EH
2 May 2009, 2:58pm E-59	Advance Rental with scenario 1 and scenario 2 and scenario 3 For Riverwalk and Expo (Sharon Tan said typo error should be Expo)	Not in the loop	Serina to Sharon Tan.  What Pastor Tan asked for

EH: “So E-502 has to do with the Palm Oil deal. At the same time, this E-59 has to do with the Expo Riverwalk advance rental. Correct?

Sharon: “Yes, your Honour.”

EH: “So, really, there were two plans running in parallel at almost the same time. Correct?”

Sharon: “Yes, your Honour.”

<….questions and answers…>

Sharon: “Your Honour, that was why Eng Han’s solution was adopted in the end, because I am only a finance manager, Pastor Tan was only a pastor…”

EH: “Let’s move on to email E-57, just the first page, point number 1. This is sent from Serina Wee to yourself again. Serina Wee is asking: “Do we still want to go ahead with the scenarios we worked out to advance rental for Expo to redeem the Xtron bonds?”
 

So here is 14 May 2009, and Serina Wee is requesting do you go ahead with the scenarios that you have planned. And now it still involves advance rental for Expo. There is no Palm Oil being mentioned. Right? So this has to do with the alternative plan that’s running in parallel. Right?”

Sharon: “Yes”

<…. questions and answers…>

EH: “So it is clear to you that, in my communications with you, the ALRA was to be done only if we had a property acquisition?”

Sharon: “Yes, your Honour”

DPP’s cross-examination of Sharon Tan on 24 – 25 September 2014 (morning session).

Now we see what is the Deputy Public Prosecutor’s (DPP) position.

DPP opened the minutes that were recorded of the discussion with Mr Sim that he was concerned about finding out what the commercial rationale of the Amended Xtron Bond. There is no record of “Mr Sim wants to see the Xtron bonds redeemed and cleared from the books by the end of this financial year”.

DPP: “I put it to you, Ms Tan, that is a lie because your own counsel has not put to Mr Sim that he said to all of you at this meeting very clearly to clear the bonds off the book of CHC. It is just another lie that you have come up with in your evidence.”

DPP went through the same emails (John Lim’s concerns email, E-501, E502, E-59) with Sharon

DPP: “From what we see then, Ms Tan, isn’t it clear that you, Serina and Ye Peng were planning scenarios 1 and 2 from the perspective of Xtron raising enough funds to redeem the Xtron bonds and not from the perspective of the church deciding on an appropriate length of Expo lease to pay advance rental for?”

Sharon replied was she just worked out with Serina the visibility on the cashflow. She is not able to answer for Pastor Tan.

DPP: “You were not just being asked to act like a human calculator by Pastor Tan, right?……. So you are not just inputting figures, there is actually substantive thinking on your part as well, because that is what you were asked to do by Tan Ye Peng. Right?”

Sharon: “Your Honour, I really didn’t put in any substantive thinking when the scenarios were given to me.”

<…. some more puts and answers….>

DPP: “I put it to you, Ms Tan, that again, you are not telling the truth about your involvement scenario planning, and you are trying to minimize your role in the scenario planning.”

Sharon: “Your Honour, I disagree.”

In addition to the emails (John Lim’s concerns email, E-501, E502, E-59), the DPP brought up some Blackberry messages discussions, which Eng Han was involved.

The blackberry message dated 10 April 2009 (Eng Han sent to Ye Peng)
 

Eng Han wrote:
I have thought through the RTO vehicle plan. I think we can clear the bonds in Firna and Xtron. However for Xtron case we need the deposit from CHC for renting palm oil to help clear the big amount of crossover debts of $13m, as well as profit from selling Riverwalk to the RTO vehicle.

Other Blackberry messages were discussed.

<…. some puts and answers….>

DPP: “I put it to you, Ms Tan, that you took part in the scheme together with Ye Peng, Serina and Eng Han to create the appearance that the Xtron and Firna bonds had been redeemed early because you wanted to avoid disclosure and valuation issues in relation to these bonds, and also possible consolidation of the CHC and Xtron accounts in subsequent audits.”

DPP: “I put it to you, Ms Tan, that you took part in the scheme together with Ye Peng, Serina and Eng Han to create the appearance that the Xtron and Firna bonds had been redeemed early because you wanted to avoid disclosure and valuation issues in relation to these bonds, and also possible consolidation of the CHC and Xtron accounts in subsequent audits.“

DPP: “I put it to you that that is why you have lied to the court that it was Mr Sim who told you all to clear the bonds off the books. You lied because you want to hide the fact that it was you, Ye Peng, Serina and Eng Han who planned to remove these bonds from the books, to avoid disclosure, valuation and consolidation issues.”

DPP brought up another email dated 2 July 2009 that involved Serina Wee, Sharon Tan and Ye Peng.

In this email they were planning to redeem the $21.5m Xtron bonds using the following three methods:
1. Increase Expo rental to $35k per usage
2. Prepay Expo rental for 6-years
3. Sell Riverwalk

Other methods were discussed as followed:
1. General Funds to donate to other organization, which in turn engage Xtron services.
2. Increase retainer.
3. CHC to engage more services from Xtron.

DPP: “I put it to you, first of all, that what this email shows is that as far as you and Serina were concerned in doing this planning, what you wanted to make sure was simply that Xtron got enough money to redeem the Xtron bonds before the financial year end. So this advance rental payment was just a coverup story that was going to be used to justify pumping a lot of money into Xtron. Do you agree or disagree?

Sharon: “Your Honour, I disagree.”

<….questions and answers…>

Sharon confirmed that she was involved in coming up with the proposals but she cannot confirm with the DPP that the idea was from her.

DPP: “… you are evading the questions,…I will repeat it. Whether or not the idea spelt out … originated from you, the fact of the matter is you adopted it as part of the analysis you intended to send Pastor Tan as the plan for redemption of the Xtron bonds. Do you agree?

Sharon: “Your Honour, I never disagree that I adopted it as part of the analysis for me to send to Pastor Tan.  But it is not just solely for the redemption plan without holding Xtron to it liability.”

DPP: “With the $10.7m, Xtron would not have been able to fulfill the rental obligations to the church for the full advance rental period of six years.  Correct?”

Sharon disagreed with explanation.

DPP asked a similar question again getting Sharon to confirm what she wrote on the spreadsheet Xtron with $10.7m would only pay for 2.9 years of Expo rental.

Sharon replied: “Your Honour, based on simple math, yes.  Only $10.7m will be left in terms of case in Xtron’s book. But your Honour, my understanding was Xtron must continue to earn income in order to fulfill the advance rental agreement.

Judge: Ms Tan, the question is simple and very straightforward. It is simply to ask you to confirm what you have said in that email, which is the cash will only last 2.9 years of Expo rental, and that is $10.7m. So whether it is simple maths or more complicated maths, I don’t understand why you can’t just address the question directly.

Sharon apologized and agreed that the $10.7m would only last 2.9 years.

City Harvest Church leaders tried to "bamboozle" auditor: Prosecution (CNA: 26th Sept 2014)

SINGAPORE: At the City Harvest Church trial on Thursday (Sep 25), the prosecution said finance manager Sharon Tan was not the "innocent follower" that she tried to paint herself as, when it came to plans to use church funds to redeem sham bonds.

Tan was taking the stand for the tenth day. She is one of six church leaders who are accused of using millions of dollars from the church's building fund to buy sham bonds in two companies, Firna and Xtron.

Lead prosecutor for the case, Mavis Chionh, showed the court messages between Tan and co-accused Chew Eng Han, in which Tan proposed using a third party to redeem the Firna bonds. She had proposed using Pacific Radiance, a company linked to member John Lam who is one of those on trial.

In one message, Tan said that even if church auditor Mr Sim Guan Seng suspected that church monies were used to redeem the bonds, "he can't fault or pinpoint". The prosecution accused Tan and Chew of trying to "bamboozle" Mr Sim and not let him find out that church funds were used to redeem the Firna bonds.

Tan disagreed and said that she was worried about "disclosure" as she had the understanding that the drawdown from the Firna bonds would be used to support the Crossover Project, which involved church co-founder Sun Ho recording and launching secular music albums.

Finance manager accused of lying: City Harvest trial (ST: 25th Sept 2014)

Auditor didn't recommend purging of accounts: DPP

CITY Harvest Church (CHC) finance manager Sharon Tan was yesterday, in her eighth day on the stand, accused of lying in the trial involving alleged wrongdoing by church officials and staff.

The prosecution said Tan lied when she claimed it was an outsider - an auditor - who had recommended that the church purge its books of its bonds in music production company Xtron.

Tan is one of six people, including founding pastor Kong Hee, accused of misusing $50 million of church funds to boost the music career of Kong's wife, Ms Ho Yeow Sun, and covering up the misuse.

The prosecution said all the accused, except Tan, channelled money from the church's building fund into sham bond investments in Xtron - which manages Ms Ho's career - and glass manufacturer Firna. Four of them, including Tan, then allegedly devised transactions to clear the sham bonds from CHC's accounts to throw auditors off the scent.

Earlier in the trial, Tan had said the source of the transactions was the church's auditor, Mr Sim Guan Seng, who said at a meeting in April 2009 that he "doesn't like the bonds" and they should be cleared off the church's books.

But Deputy Public Prosecutor Mavis Chionh challenged this, pointing out that it was not recorded in the minutes that he had said this at the meeting with deputy senior pastor Tan Ye Peng and board member John Lam.

Tan admitted it was not in the minutes, but maintained that Mr Sim had said this to her after the pastor and Lam left the meeting, and that she told them in an e-mail shortly after.

But DPP Chionh questioned how Mr Sim would have the power over church management to make this suggestion just because he did not like the bonds. Tan replied that, at the time, the mindset was to do what the auditors wanted.

DPP Chionh noted, however, that her e-mail to Tan Ye Peng and Lam did not mention that Mr Sim had told them to clear the bonds - further proof that she was lying about what the auditor had said.

Tan disagreed, pointing out how her e-mail stated that Mr Sim hoped to see "this (Xtron) issue being solved in this financial year". She said the statement referred to the Xtron bonds.

DPP Chionh said: "You are indulging in creative misinterpretation of the plain words of even your own e-mails in order to escape the lies that you have told about what Mr Sim supposedly said."

The DPP also repeatedly questioned Tan about why she would not admit to being the main contact for the audit team.

Auditors Foong Ai Fang and Mr Sim had testified that Tan was the point of contact when she took over as finance manager from co-accused Serina Wee. But Tan insisted that Mr Sim did not work with the audit team and had wrongly assumed she was the contact person.

DPP Chionh argued there was no reason for Mr Sim and Ms Foong to lie, and that Tan was simply trying to avoid being accused of more lies.

24 September 2014 – DPP cross-examined Sharon (MrsLightnFriends: 25th Sept 2014)

I find it a challenge to report what is happening in the court. The hearings seem to be going around in a circle. (I may write about the second half court’s session, related to advance rental after hearing more evidences.)

Today’s morning questioning is back to the 3 August 2008 Board minutes and the 5 August 2008 (the back dated 27 July 2008) Investment Committee minutes.

I summarized what was argued this morning related to para 4.6 of the board’s minutes.
 

Para 4.6 It was noted that the Investment Committee reviewed and approved that along with the bond agreement with Xtron (total of S$18m, 10 year convertible bonds) CHC have an option to buy Riverwalk at original cost.

Dates	DPP’s position	Sharon’s evidence	John Lam’s evidence
3 Aug 08 – Board meeting	When the board meeting was held, the IC had not yet met to review and approve the Xtron ABSA ($18m bond).	The IC meetng was present in the same meeting together with the board.  The board approved the bond agreement.	John Lam’s evidence on 15 July 2014 the paragraph 4.6 was a mistake. What was recorded in para 4.6 did not happen on 3 Aug 08.
5 Aug 08 –Investment  meeting	This meeting IC then reviewed and approved the Xtron ABSA.	Sharon asserted that the Investment Committee met on 5 Aug with the intention to assess the recoverability of the $13m, including the new Xtron ABSA.

DPP: “I suggest to you that, when we look at the email trial and we see how your falsely backdated investment committee minutes were vetted by John Lam, sent to Serina and then further sent by her to Ye Peng and Eng Han before they were provided to the auditors, these other persons also had the same intention as you, to give the auditors the impression that the church had already assessed the bonds to be a good investment even before the auditors raised queries. Do you agree or disagree?”

Sharon: “Your Honour, I disagree.”

Who were in control of how much and when to draw down on the Xtron and Firna bonds?

Sharon shifts position in answering to the DPP questions.
 

1. Yesterday’s evidence was Kong Hee, Ye Peng and Serina are the ones deciding when to draw down on the Xtron bonds because they know when money was needed for the Crossover.
 

2. Today’s evidence was the Crossover team decides when drawdowns have to be made, according to the funding needs of the Crossover, and after they have made the decision the Xtron and Firna directors are asked to sign, to approve the drawdown.

When being pressed further questions by DPP she said Serina told her that the Xtron and the Firna directors are actually the ones who approve each drawdown of the bonds.

DPP: “Ms Tan, from the emails and the BlackBerry messages that you have been shown, including (listed the email exhibits and Blackberry exhibits number) that the people who were in control of how much and when to draw down on the Xtron and Firna bonds were the people in charge of the Crossover Project, namely Kong Hee, Tan Ye Peng and Serina?”

Sharon asserted that the decisions to use the bond proceeds for the Crossover were independent decisions of the Xtron and Firna directors.

The DPP proved otherwise by retrieving the evidences from all the three Xtron directors.
 

All the three Xtron directors gave evidence in this trail that they were not in control of the drawdown on the bonds.

On 21 May 2013, Mr Koh Siow Ngea said “the church” made the decision to drawdown of the Xtron ABSA.

On 26 Aug 2013, Mr Choong Kar Weng said once the overall budget has been approved he leave it to Serina.
 

On 3 Sep 2013, Mr Wahju said the drawdown of the Xtron bonds, he leave it to Choong Kar Weng.

DPP: “Ms Tan, I put it to you that what the evidence I have taken you through show, clearly, is that the decisions as to how and when the bond proceeds were to be drawn down and used was left not to the independent decisions of the Xtron and Firna directors but were instead decided by the Crossover team of Serina, Ye Peng, Kong Hee and Eng Han. You can agree or disagree, and explain why you do so.”

Sharon disagreed and explained that her knowledge came from Serina.

Does AMAC need the approval of the board to invest in Firna bonds?

DPP: “Can AMAC go ahead to invest the church’s monies in Firna bonds without the board’s approval?”

Sharon: “Your Honour, technically, yes, but like what I said, AMAC has remained accountable when it comes to Xtron and Firna bonds, and there were approvals given.”

DPP: “What do you mean by “technically” AMAC has discretion to invest the church’s monies in Firna without the board’s approval?”

Sharon: “Based on the contract that CHC has with AMAC, that AMAC has the full discretion to invest, your Honour.”

DPP: “But what does the board require? What is the board’s understanding? Is AMAC permitted to go and invest $24.5m of the church’s monies in Firna bonds (Wahju) without the board giving it’s approval?”

Sharon: “Your Honour, I can’t speak for the board but this was how it has been when I worked with the board, your Honour.”

DPP: “Can I put it to you, Ms Tan, that your evidence in the last few minutes has been an example of disingenuous shifting of position, and it is because you are trying to cover up the fact that you are lying when you say that the board was told about, discussed and approved the Firna bonds in August or September.”

DPP: “Incidentally, Ms Tan, you claim that, actually, Mr Chew Eng Han has discretion to invest in Firna bonds without board approval. But when Mr Chew cross-examined you and he put it to you that he only has discretion to invest the remaining balance of monies in the Deutsche bank account that is not set aside for Xtron and Firna bonds, you agreed with him. So, again, that is an example of how you shift position in your evidence, depending on what position you think is favourable to you at the time. Correct?”

Sharon disagreed.

I shouldn't have backdated minutes: Finance Manager (ST: 24th Sept 2014)

Called by the prosecution, City Harvest Church (CHC) finance manager Sharon Tan yesterday admitted she should not have backdated the minutes of a church board meeting.

But she insisted it was never her intention to trick auditors.

Tan is one of six accused, including CHC founder Kong Hee, facing charges of misusing church funds.

The claims include the church making sham investments worth millions in Xtron, an artist management firm, so the money could be used to illegally fund the secular music career of Kong's wife Ho Yeow Sun. As part of its case, the prosecution is trying to show that CHC was in control of Xtron, though Tan insisted they were independent of each other, even though she was involved in compiling the salaries of the firm's staff.

Deputy Public Prosecutor Mavis Chiong presented to court the minutes of a 2008 CHC investment committee meeting, at which church memeber and Xtron director Koh Siow Ngea was present. Tan had, earlier in the trial, given evidence that she changed the date of the meeting so that it would have seemed to have taken place before Mr Koh got his position at Xtron.

"You are perfectly willing to falsify documents that you know are going to be shown to the auditors, if you think it is necessary to achieve a certain purpose," Ms Chiong put it to Tan.

She disagreed initially, before telling the court, "At that point in time, I was overly paranoid over the conflict of interest. Yes, Your Honour, in hindsight, I shouldn't have done it, but it was never my intention to defraud the auditors."

Ms Chiong also asked Tan why she had said in her statement to the Commercial Affairs Department that Xtron directors did not make major decisions, and were only "consulted". Tan claimed she expressed herself wrongly, due to her poor command of English.

Several times yesterday, Ms Chiong accused Tan, whose cross-examination continues today, of being untruthful, of not making sense and giving excuses.