CHC trial: Wee's brother had highlighted concerns (TNP: 30th Aug 2014)

Even Serina Wee's brother was kept in the dark about her work.

In an e-mail presented by the prosecution yesterday, Wee said her brother, who was also a City Harvest Church (CHC) member, had highlighted concerns regarding the megachurch's transactions in March 2010.

This e-mail was shown to CHC founder Kong Hee during his cross-examination yesterday.

In the e-mail, Wee said her brother had asked how Xtron Productions, a music production firm she provided accounting services to, could have $6 million in capital.

"I couldn't tell him that XPL had taken a bank loan for the Riverwalk (property) purchase... so I told him it was from the shareholders," Wee said in the e-mail.

Kong then admitted during the cross-examination that the $10.7 million bank loan, which was granted in 2008 so that Xtron could buy the Riverwalk property for the church, was not revealed to church members or its board.

Instead, they were told the property was paid for using the bond money that CHC had invested with Xtron.

Deputy Public Prosecutor Christopher Ong then asserted that Kong and his co-accused had "deceived the board and executive members".

Said Mr Ong: "I put it to you that the reason you wanted to avoid disclosure of the Xtron bonds was because disclosure might lead to them being revealed as shams."

Kong said he disagreed.

ON TRIAL

Kong, Wee and four others are on trial for allegedly misusing more than $50 million of church funds.

Some of this money was allegedly used to fund the music career of Kong's wife, Ms Ho Yeow Sun, through two "shell companies" - Xtron and glass manufacturer Firna.

Mr Ong also pointed out in another e-mail that Firna's chief financial officer (CFO) did not know of the full details of the bonds that the firm signed with CHC. When asked if he was "surprised", Kong said he could not comment on the knowledge of Firna's CFO.

The trial will resume on Sept 8.

Even Serina Wee's brother was kept in the dark about her work.
In an e-mail presented by the prosecution yesterday, Wee said her brother, who was also a City Harvest Church (CHC) member, had highlighted concerns regarding the megachurch's transactions in March 2010.
This e-mail was shown to CHC founder Kong Hee during his cross-examination yesterday.
In the e-mail, Wee said her brother had asked how Xtron Productions, a music production firm she provided accounting services to, could have $6 million in capital.
"I couldn't tell him that XPL had taken a bank loan for the Riverwalk (property) purchase... so I told him it was from the shareholders," Wee said in the e-mail.
Kong then admitted during the cross-examination that the $10.7 million bank loan, which was granted in 2008 so that Xtron could buy the Riverwalk property for the church, was not revealed to church members or its board.
Instead, they were told the property was paid for using the bond money that CHC had invested with Xtron.
Deputy Public Prosecutor Christopher Ong then asserted that Kong and his co-accused had "deceived the board and executive members".
Said Mr Ong: "I put it to you that the reason you wanted to avoid disclosure of the Xtron bonds was because disclosure might lead to them being revealed as shams."
Kong said he disagreed.
ON TRIAL
Kong, Wee and four others are on trial for allegedly misusing more than $50 million of church funds.
Some of this money was allegedly used to fund the music career of Kong's wife, Ms Ho Yeow Sun, through two "shell companies" - Xtron and glass manufacturer Firna.
Mr Ong also pointed out in another e-mail that Firna's chief financial officer (CFO) did not know of the full details of the bonds that the firm signed with CHC. When asked if he was "surprised", Kong said he could not comment on the knowledge of Firna's CFO.
The trial will resume on Sept 8.
- See more at: http://news.asiaone.com/news/singapore/chc-trial-wees-brother-had-highlighted-concerns#sthash.AU2stGuV.dpuf

Wee 'deceived brother about church business' (ST: 30th Aug 2014)

She hid information on church finances: Prosecution

FORMER Xtron accountant Serina Wee deceived her own brother to hide what was really happening between her firm and City Harvest Church.

After church member Roland Wee asked her where Xtron's money came from, his sister wrote to two church leaders to warn that others may also start asking similar questions.

"He can see from the business profile search that Xtron has $6,000,006 share capital. Where did the money come from? This is a question anyone looking at the accounts will ask," Wee said in the 2010 e-mail to the church's deputy senior pastor Tan Ye Peng and its fund manager Chew Eng Han.

"I couldn't tell him that Xtron had taken a ($10.7 million) bank loan for the Riverwalk purchase and (the share capital) was what the bank wanted... so I just told him it was from the shareholders."

This e-mail, which was later forwarded to church founder Kong Hee by Tan, was revealed by the prosecution yesterday, as it tried to show how Wee and the others had deceived the church's board and executive members, or hid information from them, as part of a cover-up.

The four of them, along with two others, face various charges for their part in allegedly misusing some $50 million of City Harvest's money to fund the music career of Kong's wife Ho Yeow Sun, and to cover up the alleged misdeed.

Kong had told the church's executive members in 2008 that City Harvest would lend Xtron, a church-linked firm, $18.2 million so it could buy the Riverwalk property and rent it back to the church for meetings.

But Xtron had earlier already borrowed $13 million from the church to spend on furthering Ms Ho's music career.

When several of the accused realised that Xtron could not pay back the money in the two-year timeframe, they needed a way to change the loan's terms, said Deputy Public Prosecutor Christopher Ong.

So the accused allegedly came up with the $18.2 million Riverwalk deal, which was part of a revised loan agreement that subsumed the initial loan and gave Xtron 10 years to pay back everything.

The problem was that Xtron had spent most of it on Ms Ho's music and ended with only $8.5 million in new funds under the revised loan agreement.

That was not enough to buy the property.

So it took an additional bank loan of $10.7 million, even though church members were led to believe that the $18.2 million was enough for the property purchase, said Mr Ong.

"Looking at what Serina says (in her 2010 e-mail)... it appears that the bank loan had to remain a secret even 11/2 years after the Riverwalk purchase was first announced," he pointed out.

In a 2008 e-mail, Wee had also reminded several of her fellow defendants ahead of a meeting: "CHC cannot minute down anything about Xtron's bank loan as they are not supposed to be aware of this."

Kong yesterday admitted that the $10.7 million bank loan was not revealed to the church members. He also conceded that both the church's board and executive members were not told about a mortgage over the Riverwalk property which the bank had wanted as security for the loan.

He said he was not aware of the 2008 e-mail, which he did not receive, and could not comment on Wee's 2010 correspondence.

But the 50-year-old senior pastor added that "when it comes to the financing of Xtron, we would prefer to share as little as possible within the bounds of legality as advised by professionals".

If it was known that City Harvest was funding Ms Ho's secular music career, "it will affect her legitimacy", he explained.

The defence has consistently said Ms Ho's secular music was part of the church's Crossover Project to attract non-Christians to the church.

Kong also maintained that all of the church's loans to Xtron had been vetted by lawyers and auditors, who found nothing wrong.

The trial will resume on Sept 8 with Kong continuing to be cross-examined.

  *****************Background Story *****************

KEEPING SECRETS

He can see from the business profile search that Xtron has $6,000,006 share capital. Where did the money come from? This is a question anyone looking at the accounts will ask. I couldn't tell him that Xtron had taken a ($10.7 million) bank loan for the Riverwalk purchase and (the share capital) was what the bank wanted... so I just told him it was from the shareholders.
- Former Xtron accountant Serina Wee, in a 2010 e-mail to City Harvest Church's deputy senior pastor Tan Ye Peng and its fund manager Chew Eng Han

27 August 2014 – Was Kong conservative in his budgeting? (MrsLightnFriends: 1st Sept 2014)

It was established in court that Asian albums were money-losing.  Kong agreed that the P&L for the Xtron was money-losing.

Kong agreed he was more conservative in his approach to budgeting and was more conservative after the $13m bond had been entered.  Kong counsel has also put it to Wahju during Wahju’s evidence that there was no bottomless pit of money available to fund the project.

DPP showed an email to Kong.  This email is an exchange between Kong and Justin.  Kong wrote, “Please be bold with your budgeting.”

DPP produced another new evidence in court.  This email is from Kong to Tas and copied to Ye Peng.  Kong wrote, “Please aim as high as possible and spare no expense to take Sun all the way to…..”

DPP showed Kong another email.  In this email is from Tas to Kong, Ye Peng and Justine.  Kong wrote, “Please do whatever it takes to bring her to the top… money is not a consideration from the investors.”

DPP said, “So far, we have seen you use phrases “be bold”, “spare no expense” now “money is not a consideration”.  Do you still maintain that you were conservative in your budgeting of the Crossover Project, the US phase?”

Kong said,  “Your Honour, when we moved to albums, we are talking about multimillion dollars, from that point onwards, I became more and more conservative.”

DPP referred Kong to the “the sky is the limit” email. (Note this email was mentioned in court before) Kong gave the same reply as last week. “Let’s plan as if the sky is the limit” was a hyperbole that he used.

DPP circulated another new email to the court.  This is an email from Kong to Justin dated 15 May 2008.  DPP said that in May 2008 the entire $13m under the first BSA (Bond subscription Agreement) had been drawn down.

In this email to Justin, Kong wrote in this email, “Peng and I have been talking  ..….. since Wyclef Jean came into the picture, XPL would have plowed in $8m + $4.45m = $12.45m.  For us to recoup that would have to wait 6 years until 2014.”

DPP asked, “Knowing that it would take six years, until 2014, for the project to recoup, are you saying that you never asked Ye Peng, Serina or Eng Han, Hey by the way, you know those 13 million bonds that Xtron owes to the church? When do we need to pay them back because we are only going to recoup everything in 2014?”

Kong replied, “Your Honour, by 14 May, if your Honour would look at E-361, there had been budgets already. If we could just look at E-361.”

DPP said, “No, Witness, answer my question first. Knowing what you knew, as reflected in this email that I’m showing you and not some other email that you want to jump to, did you ever ask Ye Peng, Sharon or Eng Han when Xtron would need money to repay the bonds? Surely, that plays a part in your budgeting.  You must know whether Xtron has some obligations coming up that may put a crimp on your ability to spend the money on the Crossover Project.”

Kong replied, “Your Honour, up to this point in time, I didn’t know there was a two-year maturity date, but the reason I wanted to show E-361 was because the budget by then would have shown that within five years, within seven years Xtron will be able to pay everything back, principal and interest.  So if we just have a look at just E-361.”

DPP said, “Witness, can you answer my question first?…. did you ever ask Ye Peng, Serina or Eng Han when the bonds needed to be repaid….”

Kong replied, “Up to this point in time, in May 2008, I didn’t know, and I have not asked.”

<…some questions and answers..,>

Kong said, “…. I was told that that is not a problem because Eng Han, our fund manager, said that you can always re-issue the bonds and extend the maturity date.”

<…some questions and answers…>

DDP said, “I put it to you that when you were budgeting you had no consideration for whether Xtron could repay the bonds because there was no intention on the part of you, Serina, Eng Han, Ye Peng and John Lam that Xtron would actually be responsible for paying the bonds.”

Mr Sreeni stood up, “…… I don’t think the put should include the intention of other parties.”

DPP said, “… his team actually intended, he can answer the question, your Honour.”

Mr Sreeni, “Your Honour, I don’t think you can put the intention of another accused to one accused… it doesn’t mean anything.”

DPP, “… if two people are charged with murdering somebody is a conspiracy, surely one can be asked.  The two of you went with the intention of killing the victim.  It cannot be that if one of the elements of the charge is that there was a collective intention that such a question cannot be put.”

Judge said, “Yes, it is an element of your charge, so please go ahead.”

DPP repeated the put statement to Kong and he disagreed.

Church leaders hid from board Xtron’s bank loan to buy property (Today: 30 Aug 2014)

SINGAPORE — When rumours began swirling online after City Harvest Church had bought a multimillion-dollar stake in Suntec Singapore Convention and Exhibition Centre, accountant Serina Wee’s brother voiced his concerns to her after he had read a blog post in March 2010.

In an email to co-accused Tan Ye Peng and Chew Eng Han about her brother Roland’s concerns, Wee — who is among six church leaders on trial for misusing church funds — said her brother was raising questions he felt any financially-trained person would have asked.

Mr Wee had asked about church-linked entity Xtron Productions, which had previously helped acquire property for the church. He said anyone looking at Xtron’s accounts would have asked where its S$6 million share capital had come from.

Wee wrote in her email to Tan and Chew that she could not tell her brother that Xtron had taken a bank loan to purchase a property, The Riverwalk, and that it was the bank that wanted Xtron to have a certain amount in capital.

Yesterday, prosecutors grilled defence witness and church founder Kong Hee on why he and his co-accused had failed to tell the church board and executive members about Xtron’s bank loan of S$10.7 million to buy Riverwalk in late 2008 and the mortgage taken on the property. The board and members were instead told that the S$17.55 million Riverwalk purchase was funded by bonds Xtron issued to the church, when it was, in reality, funded by both the bank loan and bond proceeds.

Deputy Public Prosecutor Christopher Ong argued that the accused persons had wanted to conceal the fact that Xtron had already used S$13 million of the bond proceeds for the church’s Crossover Project, through which Kong’s wife Ho Yeow Sun embarked on a pop music career to reach out to non-Christians.

However, Kong denied the charge. He said he preferred to share as little as was legally possible about the Xtron bonds and how they were used to finance the Crossover because he did not want to affect Ms Ho’s legitimacy as a secular pop singer.

He also said he did not know why Wee could not tell her brother about the 2008 bank loan — one-and-a-half years after it had taken place.

The six church leaders face three to 10 charges each for using S$24 million of church building funds to invest in sham bonds in Xtron and Indonesian company PT The First National Glassware (Firna), before misusing another S$26.6 million to cover up the first amount.

The prosecution also sought to show that Kong, Wee, Tan and Chew had controlled when and how proceeds from the Firna bonds would be used. Emails produced showed Kong’s frustration when fund transfers to pay for the Crossover were held up in Firna owner and church member Wahju Hanafi’s bank account. Kong told Wee in an email in November 2008: “We really must impress upon (Mr Hanafi) the urgency of returning the money!”
("returning"? wait. whose money is it?)

The trial resumes on Sept 8 with Kong continuing to be cross-examined.

CHC board never told S$13m of bonds were for funding Crossover Project: Prosecution (CNA: 29th Aug 2014)

SINGAPORE: Prosecutors have charged that the six City Harvest Church leaders accused of misusing church monies "intentionally deceived" the management board and its executive members. They alleged that this was done by deliberately concealing information about the bond transactions to disguise the fact that they channelled money from the church's building fund.

The prosecution said the church board and its members were never told that the S$13 million in Xtron bonds were meant to finance the church's Crossover Project. The project is the church's way of evangelising through secular pop music, and is fronted by Kong's wife Sun Ho. Xtron was Ms Ho's artiste management firm at the time.

Kong said his team may not have shared the information about the bond proceeds being used to finance the Crossover Project because they did not see a need to. He said he would have if he knew of any "legal obligations" to do so, adding that "whether we share it or we didn't share it, all financial transactions between City Harvest Church and Xtron must be legal and legitimate".

The prosecution added that Kong and his deputies had also hidden from the church board and executive members the true purpose of a S$21.5 million amended bond subscription agreement, which the church entered into with Xtron in 2008. This was a way to buy Xtron more time to repay the bonds, and to cover up the fact that the original S$13 million had already been spent on the Crossover Project, the prosecution charged.

Prosecutors said the church board and members were given the false impression that Xtron would use the entire bond proceeds from the amended agreement to buy a Riverwalk property that would then be leased to the church.

In reality, because the S$13 million had already been spent, Xtron only received a fresh injection of S$8.5 million from the church. That meant it had to take a loan for the remainder of the purchase price of the Riverwalk property.

The prosecution then pointed to an email from Mr Roland Wee - brother of the church's former finance manager and accused Serina Wee - as evidence of how the church had been kept in the dark about this even up till 2010. Mr Wee had highlighted some concerns about Xtron's financials, which Serina Wee then forwarded to her co-accused - deputy senior pastor Tan Ye Peng, and the church's former investment manager Chew Eng Han - saying: "I couldn't tell him that Xtron Productions had taken a bank loan for the Riverwalk purchase."

The prosecution also turned to the church's investment in bonds issued by Firna - a glassware company owned by Indonesian businessman and longtime church member Wahju Hanafi. It charged that the Firna bonds were - like the Xtron bonds - a sham to channel the church's building fund monies to finance the Crossover Project, and that Mr Hanafi was simply acting as a "conduit".

Deputy Public Prosecutor Christopher Ong charged that it was Kong and his team who controlled the drawdown of the bonds and how the proceeds would be used. Mr Ong pointed to the emails which he said reflected Kong's frustration with the delay in his instructions regarding various payments being carried out. "Mr Hanafi had no control over the proceeds of the bonds, except for the parts that were allocated for his own use," he charged.

Kong refuted this, saying the funds had been "earmarked" by Mr Hanafi under the Firna bonds, to be used for the Crossover Project: "Wahju had pledged them for the Crossover album production and that's why we held him accountable to the commitment." He added that the Firna bonds were not a sham and that its structure would never have been carried out without the sanction of lawyers and auditors.

The hearing will be resuming on Sep 8, when Kong will continue to be cross-examined. After that, his co-accused and the church's finance manager Sharon Tan is expected to take the stand.

$2m to Xtron for 'legitimate services' (ST: 29th Aug 2014)

Pastor denies church money was slated to help music firm pay off loans

CITY Harvest founder Kong Hee insisted that there was nothing fishy about plans to pay Xtron $2 million of the church's money to fund, among other things, a promotion blitz for the American album of his wife, Ms Ho Sun Yeow.

But the prosecution suggested yesterday that this was just one of several schemes hatched by Kong and his deputies in a bid to use church funds to help the production firm pay its debts.

"We have, in fact, seen how... retainers would be adjusted, rental increased or expenses re-allocated to ensure that Xtron's cash flow was solved," Deputy Public Prosecutor Christopher Ong put it to Kong during cross-examination.

The senior pastor and five others face various charges for their part in allegedly misusing some $50 million of church funds to boost Ms Ho's music career and to cover up the misdeed.

In 2007, the church agreed to a deal to buy $13 million of Xtron bonds to help finance her debut American album. Xtron had two years to repay the money, along with interest.

But in a 2009 e-mail, church finance manager Sharon Tan told Kong that the church would need to pay Xtron $401,000 more in retainer fees. This was to make up for a reduction in the rent City Harvest paid Xtron for a property.

"What Sharon is really describing is (the church) taking with the right hand but giving back with the left hand to Xtron, and that doesn't make commercial sense from CHC's point of view," said Mr Ong.

In an e-mail a year earlier, former Xtron accountant Serina Wee had also referred to the $2 million payment as one way to help Xtron if it could not recoup enough from Ms Ho's album sales.

Kong said yesterday the $2 million was part of "tentative provisions" to finance a slew of events to show the church's support for the album. But he said the payment would have been legitimate as the church would have got extra services from Xtron.

"During the run-up of the album launch all the way to the actual launch (in 2009), there would have been many, many events that the church would get into. It was much like what had happened in Asia for (Ms Ho's) Asian album launches," he said. The events included outreach concerts in the US and Asia, and "a lot of gospel events".

The money would have paid for the "real, legitimate and commercially viable" services needed to organise the events, said the 50-year-old.

He also again rejected the prosecution's allegation that he and his deputies were the ones who were secretly in control of Xtron, enabling them to rubber-stamp sham deals and illegally funnel church funds into Ms Ho's career.

Mr Ong yesterday pointed out that Kong, Tan, Wee and deputy senior pastor Tan Ye Peng were the ones involved in e-mail discussions about how Xtron could meet its loan obligations, even though none of them belonged on its management.

But Kong said he and the others were "partners working with Xtron's management" on the Crossover Project, a church project which used Ms Ho's secular music to evangelise. "Ultimately, the Xtron directors have to look at all the plans, and they have to authorise it on their end."

WanBao (28th Aug 2014)

Kong Hee emailed American producer: regardless of cost, make the album
Kong Hee once said "money is not an issue" and the album must be produced regardless of cost.
in today's proceeding, prosecution brought up a few emails between Kong Hee and the american producer.
when discussing the budget for the album, kong hee said "please do your best to make Sun Ho a top singer, money is not an issue for the investor."
he also said that no cost is too great in creating the album.
prosecution pointed out that various evidence prove that kong hee is not as conservative in controlling the budget as he is claiming.
kong hee rebutted that the only reason he said those things was the understand what is the cost required to make a best selling album.
but the prosecution continued to bring out evidence to show that while kong hee was busying doing the budgeting for the album, he did not check with his team when the Xtron bonds were due.
prosecution claimed that the fact that kong hee was not concerned with the redemption of the bonds was because xtron never intended to pay CHC back for the bonds.

prosecution submitted evidence revealing that Sun Ho's album cost $10million in 5 years
the chinese and english albums released by Sun Ho cost more than $10 million in 5 years! and to reduce the losses, Sun's agent sold the albums to CHC at more than twice the cost price.
prosecution continued to give evidence that Sun's music career was losing money, and kong hee knew from the start that the church has invested in sham bonds that would never be redeemed.
evidence presented shows that between 2003 and 2007, Sun's agent, Xtron lost $9.62million.
additionally, the album released by Sun in 2002, Sunday, lost $690,000.
in 2007, Serina and Tan Ye Peng also discussed in an email to sell the spare stock of "Lonely Travel" to the church.
Serina revealed that each album costs $4.50, but after discussion with Xtron, each album will be sold to CHC at $13.50.
Serina explained that this is to allow Xtron to have enough cash flow to repay some of its debts, including the loans she and kong hee personally gave to Xtron.
prosecution accuse kong hee of knowing sun ho's albums were losing money before the church invested in Xtron bonds.
prosecution also exposed that although publicly it was said that sun's album sales was estimated at 1.5million, in reality, kong hee's team was only estimating the sales to be around 200,000.
according to this estimate, Xtron would not be able to pay CHC back when the bond were due in 2 years. in fact, Serina calculated that it would take up to 10 years to repay the bonds.

Chew Eng Han and Tan Ye Peng's statement:
Moving fund to support Sun Ho
Bonds were not real investments.

Chew and Tan already admitted when questioned that the bonds were not "real" investments, and Xtron was just a means for the church to transfer money to the Crossover project.
Cross examination revealed that Chew has told the CAD that the bonds were not genuine investments.
he said that the church invested in Xtron to ensure that Xtron has enough funds to support Sun Ho's music career, but he also added that the Crossover is supported by the members of the churhc.
Tan's statement also revealed that he told the CAD investigators that the church was making use of Xtron as a means to transfer funds to support Sun Ho's music career.
But Kong Hee disagreed with this.

Album cost: $4.50
Church paid: $13.50

prosecution said that Sun Ho's album costs $4.38 each, but the church bought it at $13.50 because Kong Hee and Serina Wee lent money to Xtron for the publicity of the album.
yesterday afternoon, prosecution brought up an email sent from Serina to Tan Ye Peng which mentioned that the church intends to pay $13.50 to buy each copy of "lonely travels".
email also revealed that church spent $447,000 to buy 32,500 copies of the album.

Kong Hee admitted to 3 things
1. he admits that he wants church members to go to the stores to buy the albums to boost sales. prosecution showed an emailed written by Kong Hee, the reason for that is because he wants to use the royalties from the album to build a school in China.
Kong Hee also estimated that for Xtron to break even, between 13,000 and 28,500 copies of the album needs to be sold.
Kong Hee hopes to sell 20,000 copies, but said that there were only 3,000 copies in the market. Kong Hee expressed his concern, because he hopes the members can buy the album from the stores instead of ordering it from the CHC warehouse in order to boost the charts.
2. he admitted yesterday that there are no records showing the board either discussed or approved the purchase of the first set of Xtron bonds.
Kong Hee explained that the investments do not require the approval of the committee because the committee has given Chew Eng Han's investment company the authority to invest up to $25million
3. prosecution said that Sun Ho's albums were losing money and needed external funding to sustain the Crossover. Kong Hee admitted that becaue the publicity costs were high, the album was not self-sustainable, and needed external sources of funding, including allowing Xtron to provide services to teh church to raise the required funds.

prosecution accused kong hee and the rest of repeatedly checking with Foong in order to check if there are any loopholes in the lies so that they would be able to answer any queries raised by the auditors. but kong hee rebutted that if the house is dirty, why would he invite guests?
kong hee said he and his team would usually ask for foong's opinion, because foong was also a respected elder and understood the vision of the church.
but the prosecution brought out emails that showed that there is a reason why kong hee insisted that his team check with foong when he knew that the auditor in charge was someone else. prosecution thinks thats kong hee wanted to check foong's reaction, and what questions foong would raise so that kong hee and his team knows how to prepare for the actual audits.
kong hee disagrees. he asked if the prosecutors are accusing foong of being part of the conspiracy?
kong hee gave the analogy of the house, saying "if i knew my house was dirty, and there was someone watching me, why would i invite the person in so that he can find out where the dirty spots are? of course i would stay as far from him as possible."

,

even though he has been on the stand for 12 days, it is estimated that he would be required to be there for at least another week.
today is the 12th day Kong Hee is on the stand.
today is also the 5th day prosecutors have been cross-examining him since they began last tuesday afternoon. prosecution said that they are unlikely to finish the cross examination by this week.
this case will take a break next week and the prosecution stated that they should not take too much time in the next tranche questioning kong hee but will not say exactly how much more time they would require.

pastors also require high end clothes?
an email sent by kong hee to foong revealed a discussion on how much kong hee spends on clothes.
kong hee said in the email that he knew foong met up with serina and tan ye peng, discussing kong's finances and wanted to explain a few items.
kong hee said that the expenditure on clothes was high because Sun needed to perform on stage and to meet with the press.
"my many suits are for tv recordings, because i have to record programs 7 days a week, and these programs are telecast in 12 channels shown all over asia and australia."
but kong hee did not reveal the actual figures in the email. however he told foong that if foong had any issues, he would be willing to accomodate.

prosecutors pointed out that kong hee and the rest didn't ask the auditors if the bond investments were legal. kong hee stressed many times that he and his team asked the auditors' and the lawyers' opinion to ensure the investment was appropriate.
but the emails showed that kong hee and team only asked the auditors which at the items that they are quired to disclose. for example, can they only show that the funds are transferred to AMAC but not where the funds eventually end up?
prosecution claimed that kong hee and team did not ask the auditor if the bonds were legal, similarly, no such questions were asked in the emails between kong hee and his lawyer.
prosecution believes that because it is too obvious to directly transfer the money, kong hee and team thought of using bonds to fund the crossover to prevent revealing too much to the public.
kong hee disagrees.

Kong Hee twice said John Lam didn't act appropriately.
when he was on the stand, John Lam said that he didn't do his homework when purchasing the Xtron bonds because he believed the Kong Hee's project will succeed. to that, Kong Hee said that regardless or whether John Lam believes in him, John La, should have done his homework.
Lam previously admitted that he would take notes during board meetings, and he did backdate certain meeting minutes. to this kong hee said that lam should not have done that, but kong believes that the meetings were real, because lam would not do anything to deceive the auditors.

Kong ‘updated on bond repayment as he helped create sham’ (Today: 28th Aug 2014)

SINGAPORE — City Harvest Church (CHC) founder Kong Hee was kept updated on the repayment of an investment in a church-linked entity, because he was among five leaders who “created” the problem of a sham investment in the first place, the prosecution argued yesterday.

Kong was kept updated by three other church leaders — Serina Wee, Tan Ye Peng and Chew Eng Han — on how audio-visual firm Xtron Productions was going to repay the church for a bond investment, Kong told deputy public prosecutor Christopher Ong.

But Kong, 50, flatly denied the investment in Xtron was a sham. The church leaders were working on the repayment of the investment, complete with interest, because they were partners with Xtron, he said. Xtron managed the pop music career of Kong’s wife Ho Yeow Sun. Her music was part of the Crossover Project, a church-approved bid to spread the gospel.

Kong and five other church leaders — including Wee, Tan and Chew — are accused of misusing S$24 million of church building funds on sham bond investments in Xtron and Firna, an Indonesian firm owned by a church member. They then allegedly misused another S$26.6 million to cover up the first amount.

Pointing to BlackBerry messages and emails where the accused discussed discounts on interest charged to Xtron and adjustments to retainer fees CHC would pay Xtron, DPP Ong argued they were able to manipulate transactions between the church and Xtron and manage Xtron’s finances.

Kong replied that the emails were merely proposals that required the approval of Xtron directors. The prosecution had previously argued that the Xtron directors rubber-stamped decisions made by the accused.

Mr Ong also questioned why Kong wanted to know in March 2010 the amount of investment profits earned by the church outside of the Xtron and Firna bonds — described by Tan Ye Peng as “actual money … from the ‘world’” — when he tasked co-accused and the church’s former finance manager Sharon Tan to find out.

“I put it to you that the reason you discounted the investment profits from the Xtron and Firna bonds is because you knew that it was really just a case of church money being cycled through particularly Xtron to pay the interest back to the church,” Mr Ong said.

Kong disagreed and said Xtron could have earned revenue through various means, including projects unrelated to the church. He denied any “sinister slant” in Tan Ye Peng’s words.

Xtron was 'shell company' controlled by Kong: Prosecutors (CNA: 28th Aug 2014)

SINGAPORE: In the ongoing City Harvest Church trial, the prosecution has alleged that founder Kong Hee and his deputies manipulated transactions between the church and Xtron Productions, to ensure Xtron was able to meet its financial obligations.

It is the prosecution's case that Xtron was a shell company controlled by Kong, used to channel church monies in the form of sham bonds to finance the secular music career of Kong's wife, Sun Ho. Xtron was the artiste management firm for Ms Ho.

SOLVING XTRON'S CASHFLOW DEFICITS

The prosecution said the accused discussed how to move money "from the right hand to the left hand" to solve Xtron's cashflow deficits. For example, upping retainer fees the church paid to Xtron when it suffered a loss of income in another area.

The church had proposed upping the retainer fees it paid to Xtron, to "cover up" a decrease in the rental income Xtron would earn from the church on its Riverwalk property. "Doesn't it suggest that whatever savings were being made from the reduced Riverwalk rental were actually being put back into Xtron by way of the increased retainer?" asked Deputy Public Prosecutor (DPP) Christopher Ong. But Kong denied this, saying that even with the increased retainer, the fees charged by Xtron were "still within the bounds of reason" and "commercially justifiable".

It also produced emails to show how some of the accused had devised ways to inject funds into Xtron. One example was using money from the drawdown of the bonds to help pay the S$4 million in bond interest owed to the church.

"So Xtron was going to borrow more money from CHC, to pay CHC interest, according to this plan," said DPP Ong. Kong said this was proposed with the view that Ms Ho's album would yield profits when launched. "Ultimately the album profit will be sufficient to pay off all the principal and interest of the bonds," he added.

XTRON'S FINANCIAL PROPOSALS NEEDED HIS APPROVAL, ADMITS KONG

The prosecutor questioned Kong as to why it was his team members planning how Xtron would repay the bond interest, to which Kong replied: "I think we've established from Day One that myself, the leader of the Crossover Project, Pastor Tan (Ye Peng), and Serina Wee, we were partners working with Xtron's management ... and we work together in partnership with them for the Crossover Project, especially the US album production."

Kong emphasised that the church worked as "partners" within the scope of what the Xtron directors knew and allowed. But he admitted that proposals for how Xtron would meet its financial obligations would not "start to move ahead" without his approval.

Kong said his team would run plans past him, as he was the senior pastor and leader of the church. But he qualified that the plans would have to "ultimately" pass muster with professionals like lawyers and auditors, and then be finally approved by the relevant boards or directors.

The prosecution said that the reason Kong's deputies kept him updated on plans for how the bonds and the interest would be repaid was because this was a problem they had created by entering into the sham transactions in the first place."

Serina Wee projected $9.5 million loss from Sun Ho’s album (TNP: 27th Aug 2014)

Music production firm Xtron was bleeding heavily from funding singer Sun Ho's albums and singles.

It suffered losses of $9.5 million in the four years after its incorporation in 2003, based on a document shown by the prosecution yesterday.

The prosecution continued its case that City Harvest Church (CHC) founder Kong Hee and five other church leaders had used Xtron as a "shell company" to enable the misuse of church funds. (See report above.)

Kong, who is on the stand, had maintained that investing into a $13 million Xtron bond in 2007 would bring "good returns".

But Deputy Public Prosecutor Christopher Ong sought to prove Xtron, which was Ho's artiste manager from 2003 to 2008, was not as "commercially viable" as Kong had claimed it to be.

For example, an e-mail sent by former CHC finance manager Serina Wee projected a $9.5 million loss from Ho's Asian albums and US singles between 2003 and 2007. Kong said he was aware of this.

"I knew that we needed millions of dollars by the end of 2006. I knew that we needed to have a loan."

Mr Ong also presented e-mails sent in July and September 2007 by Wee, who also provided accounting services to Xtron.

Wee had projected that Xtron would take 10 years - eight more than the agreed maturity date of two years - to repay the $13m bond given its financial situation. "We based our projection on 200,000 copies of (Ho's) English album sold which would yield $2.17m, hardly enough to pay off the $13m," Wee wrote in the July 2007 e-mail.

"So we will need 10 years as previously discussed assuming no new unbudgeted expenditure."

The original $13m Xtron bond subscription agreement, which was signed in July 2007, stated the money was to be repaid to CHC after two years.

It was revised in August 2008, and amended for a total of up to $25 million. But Kong said that before the bond agreement was signed in July 2007, he did not know Xtron wouldn't be able to pay back the initial $13 million to CHC.

He also claimed Wee's projection of 200,000 copies was a "worst-case" scenario.

The actual projection that he had budgeted for was 1.5 million copies, he said.

"I know that Serina is taking an ultraconservative projection, because... the last budget that she worked together with me in the month of May (2007)... shows that the budget was rather healthy."

But Mr Ong asserted that Serina had written in one of the e-mails that her projection was what she intended to present to Kong.

'WILDLY FLUCTUATING'

He also said it was "unbelievable" that Wee's projection would differ greatly as Kong was the "primary source for projections" concerning the budget for his wife's English album.

"Isn't it very odd to have such wildly fluctuating cash flow going around and being presented to you if it ought to be clear that the estimate should be based on 1.5 million sales?"
Kong replied: "This is a question that only Serina could answer."

Mr Ong said: "I put it to you that by entering into this transaction despite knowing that there was no reasonable prospect of return, you entered into a sham transaction."

Kong said he disagreed.

Mr Ong also presented an e-mail showing that Kong had instructed his church members to buy Ho's fifth Mandarin album, Embrace.

"Anything less than (13,000 copies) shows that our members don't get it but I guess that is the rock bottom line so if we could do 20k or more," wrote Kong.

In the e-mail, Kong had also called for the members to purchase the CDs directly from stores. He explained yesterday that it was to help push Ho's album "up the charts".

"We were working on the premise... that nobody outside of our church will buy it. But, at the end of (the) day, it's up to the members."

The trial continues today.

Kong 'did not care' about recovering church loan

Kong told Sun Ho's album producers to plan 'as if the sky's the limit': Prosecutors (CNA: 28th Aug 2014)

SINGAPORE: In the ongoing City Harvest Church trial, the prosecution charged that founder Kong Hee and his deputies controlled when to draw down Xtron bonds, and how these funds would be used. It said the bonds were simply a sham mechanism to tap on the church's building fund to obtain money whenever needed to finance the church's Crossover Project.

Kong and his five deputies are in the dock for allegedly using millions of the church's money to buy sham bonds. The project, fronted by Kong's wife Sun Ho, is a way of evangelising through secular pop music.

The court heard that even before the church entered into the bond transactions with Xtron - Ms Ho's artiste management firm - Kong had made decisions concerning the financing of her music career - before getting the approval of Xtron directors.

S$300,000 "UNANTICIPATED PAYMENT"

The prosecution produced a 2006 email where Kong approved a S$300,000 "unanticipated payment" to an American music producer as an example. These included expenses for a party in the Hamptons - a popular seaside resort in the US with some of the most expensive residential properties. It was estimated that this would cost between S$70,000 and S$150,000 to have a "name celebrity" host the party.

Kong admitted that there was no standing instruction that Xtron directors should be informed about the ad-hoc payment as soon as possible. He said he would usually approach his co-accused Serina Wee, who was then managing Xtron accounts about such ad-hoc payments, and she would let him know if there was any leftover in Xtron's budget for the Crossover Project.

In the case of the S$300,000, the payment was later given the green light by the Xtron directors when the budget for the next phase of the project was approved. He added that there were times he would be "scolded" by one of the directors Wahju Hanafi for "overspending the money."

The prosecution pointed out that the Xtron directors were not involved in the decision-making over what to spend the drawn down funds on, and that they were just "rubber stamps" for the expenses. Kong refuted this, saying the Xtron directors would have seen and approved a comprehensive budget.

"PLAN AS IF THE SKY'S THE LIMIT"

"The prosecution also said that Kong had not been as conservative in his budgeting for Ms Ho's US album as he had claimed. It produced emails from Kong to American music producers in which he told them to plan as if the sky was the limit, and to "spare no expense."

Deputy Public Prosecutor Christopher Ong charged that Kong's lack of consideration in budgeting in May 2008 - especially with a two-year maturity date on the Xtron bonds approaching - showed that he was "unconcerned" with repaying the bonds. This despite the knowledge that the project would now take five to seven years to break even, rather than two years as initially projected.

"Didn't you hesitate and wonder, hang on, does Xtron need to repay the bonds before that? This would be a major change in the circumstances of the project budget," asked Mr Ong. Kong denied this, saying he had not been aware of the two-year maturity date, and that the budget had been crafted with recoverability in mind.

Mr Ong refuted this, saying: "You had no consideration for whether Xtron could repay the bonds because there was no intention on the part of you, Serina (Wee), (Chew) Eng Han, (Tan) Ye Peng and John Lam, that Xtron would actually be responsible for paying the bonds." He added that the repayment of the bonds was "just another cash-flow deficit" that Kong and his deputies would solve, to keep the Crossover Project going.

NO EVIDENCE OF PERSONAL GUARANTEE

Kong has also on a number of occasions told the court that he relied on a personal guarantee from Xtron director and Indonesian businessman Wahju Hanafi, to underwrite any losses from the production of Ms Ho's album. Mr Hanfi is also a long-time member of the church.

However, the prosecution said that there was no evidence that such a guarantee existed, and that Mr Hanafi and his glassware company Firna were simply a "conduit" for funds to be channelled to the Crossover Project. It pointed to an email exchange between Mr Hanafi, Chew Eng Han, and Serina Wee dated October 2008, where Mr Hanafi asked if Firna was "only helping to pass through the money".

Chew responded: "Firna 'pays' but of course, in the end it is us, who will take care of the repayment of the bonds when it matures ... just as for the Crossover costs."
Mr Ong added that when the church entered into the first bond subscription agreement with Xtron, it was "not working on the belief that Wahju Hanafi would be responsible for covering the losses if Xtron defaulted."

City Harvest trial: Kong 'did not care' about recovering church loan (ST: 28th Aug 2014)

When $300,000 was needed for, among other things, a party in the upmarket Hamptons area in New York to promote his wife's music career, City Harvest founder Kong Hee gave the go ahead.

But when it came to keeping tabs on how to repay the church loan that helped pay for it, Kong admitted in court yesterday that he lacked full knowledge.

He did not, for instance, realise Xtron Productions, which managed his wife Ho Yeow Sun's pop career, had just two years to repay the $13 million it borrowed from the church.

He also did not know that his deputy John Lam Leng Hung, the church's then investment committee chairman, failed to vet the loan to ensure the church's interests were protected.

All this showed how little Kong cared about how the church would get its money back, even as he was planning to spend it on his wife's singing career, Deputy Public Prosecutor Christopher Ong said yesterday.

"Let me be clear," said Mr Ong. "You didn't care about having to repay (the money)."

Lam had called a meeting to assess if amending the loan's terms would enable the church to recover its money only almost a year after the loan was finalised, when auditors started asking questions, said Mr Ong.

He added that the meeting's minutes were then backdated to make it seem as if the due diligence was done before the auditors raised their concerns.

Mr Ong also argued Kong was in control of Xtron.

Kong said none of this was true, and that he trusted his deputies to do the right things.

He said: "I trust my team. I trust John and that he wouldn't do anything deceptive... I don't believe he would do anything to deceive the auditor."

Kong, Lam and four others face various charges for their part in allegedly misusing some $50 million of church funds to boost Ms Ho's career, and then covering up the alleged misuse.

Kong said while he was only generally aware of the terms for the $13 million loan, he relied on others more involved in the transaction to alert him to any problems.

He denied he was in charge of Xtron, insisting its directors had the final say on the overall budget for Ms Ho's planned United States debut album, which the church loan had helped finance.

For his part, he said he had been careful in his budgeting of the album. Relying on projections that it would sell at least 1.5 million copies, he believed Xtron would eventually be able to repay the church. "At the end of the day, there was always recoverability intended, genuine recoverability that was projected by top professionals from America," Kong said.

Another key reason for his confidence, he said, was the guarantee given by long-time church member and Indonesian businessman Wahju Hanafi to underwrite losses from the church's Crossover Project, which used Ms Ho's secular music to evangelise.

Kong said Mr Hanafi gave him a verbal guarantee in 2002, and then put it in writing in 2010.

But Mr Ong argued that the verbal agreement was not included in the Xtron bond contract, or in the minutes of the meeting to discuss the loan. He also produced e-mail to show that Mr Hanafi himself faced financial trouble during the loan period.

But Kong said he was not concerned by this: Like "most millionaires I have met, (Mr Hanafi) is asset-rich and cash-poor... in my limited exposure to millionaires".

Kong Hee knew reality of bonds: prosecution (BT: 27th Aug 2014)

But he says he was not aware of Xtron cashflow projection

EVEN before City Harvest Church (CHC) entered into the S$13 million bond subscription agreement with events management firm Xtron Productions, the church founder and four of his deputies knew that there was no reasonable prospect of return, charged the prosecution.

On Tuesday, the court was shown an e-mail dated July 3, 2007 (sent about a month before the first drawdown of the S$13 million Xtron bonds), which was correspondence between three of the six accused: Chew Eng Han, Tan Ye Peng and Serina Wee.

The trio had discussed in a Xtron cashflow projection how the sale of 200,000 copies of singer Sun Ho's United States albums would bring in revenue of S$2.17 million. In the e-mail, Wee told Chew and Tan that this was "hardly enough to pay off the S$13 million" by 2009 and that it would take Xtron 10 years to redeem all the bonds from the church.

Church founder Kong Hee, 50, told the court that Wee, who came up with the projection, was being "ultra-conservative". He testified that he was not aware of the July projection and that he was not involved in that discussion.

Referring to a scenario planning dated May 9, 2007, Kong said it was the last scenario planning that his team shared with him before the Xtron bond subscription agreement was entered into in late July 2007.

The May projection, based on a 1.5 million album sale, showed that by about 2008 or 2009, Xtron would have a surplus of S$1.2 million after paying off a loan of about S$10 million.

Prosecutor Christopher Ong then grilled Kong on why Wee would suddenly do a projection that was 1.3 million copies less than the May 2007 estimates.

Kong said: "I don't know. She was probably being conservative, as advised by (American music producer) Justin Herz in November 2006, perhaps."

Referring to the statements of Chew, Tan and Wee to the authorities, Mr Ong noted that the trio stated that Kong was kept in the loop about their July 2007 projections.

But Kong said he could not recall being told of this by the three before the church entered into the first bond subscription agreement.

Citing two other e-mails sent by Wee in August and September 2007, Mr Ong pointed out that it was "odd" for Wee to have "such wildly fluctuating cashflows". He added that Wee said in her September e-mail that she was to present to Kong the July 2007 projections.

To this, Kong said: "Your Honour, this is a question that only Serina could answer."

The court also heard that the auditor of both Xtron and the church, Sim Guan Seng, was "never informed" of the July 2007 projection.

The founder agreed, but stressed that he was not involved in that.

Earlier in the day, Mr Ong also accused Kong of lying to the church's executive members in the latter's description of how AMAC Capital, owned by Chew, was chosen to be the church's fund manager.

Kong and five deputies are accused of misusing millions of the church's building fund monies to boost Ms Ho's career through "sham bond investments" in Xtron and glassware manufacturer Firna. Four of the six are also fighting allegations of round-tripping that the prosecution said was used to cover up the misuse.

City Harvest trial: Church 'invested $13m though album unlikely to succeed' (ST: 27th Aug 2014)

City Harvest founder Kong Hee knew that his wife's American album was not going to amount to enough - with a projected sale of just 200,000 copies.

But that did not stop him and several of the other accused from "investing" $13 million of the church's money into the project, the prosecution alleged yesterday.

They went ahead and bought bonds in Xtron, which managed Ms Ho Yeow Sun's pop career, despite knowing that too few albums would be sold for the church to recoup its money in time, the court was told.

"You knew... there was no reasonable prospect of success... Nevertheless, you and (several other defendants) went ahead with this (purchase of bonds)," Deputy Public Prosecutor Christopher Ong put to Kong.

"By entering into this transaction... you entered into a sham."

If just 200,000 albums were sold, Xtron would take 10 years to repay the money, instead of the two years as required by the bond agreement, he added.

The pastor, however, insisted that he was not told of the discussions about the "200,000" projection and was working on an estimated sale of 1.5 million copies of his wife's album.

Since the prosecution began its cross-examination of Kong on Tuesday last week, DPP Ong has tried to establish several key points.

One was that Kong oversaw the production of Ms Ho's album in the United States and how much was being spent on it.

Another was that the 50-year-old, along with his deputies, controlled the strings at church-linked companies such as Xtron, which was set up to disguise the church's financing of Ms Ho's music career.

Yesterday, DPP Ong got Kong to concede that there was no record of the church's management board approving the purchase of the Xtron bonds. He also pointed to statements given by deputy senior pastor Tan Ye Peng and former church investment manager Chew Eng Han to the Commercial Affairs Department.

In these statements, both said that Kong knew of the 200,000 figure, which Xtron accountant Serina Wee had put forward.
Chew went so far as to say that the estimate had "probably" come from Kong himself.

DPP Ong suggested to Kong that Chew was right on this. "We have heard many times... that you were the one liaising with (American music producer) Justin Herz on the budget projections.

"So the source of information about budget projections, including expense and album sales, would be you, correct?"

Kong agreed that he was the "main liaison", but insisted that he knew nothing of the 200,000 figure. He pointed out that he was not included in an e-mail where Chew, Tan and Wee - who were all in the courtroom yesterday - discussed the projected album sales before Xtron issued its bonds in 2007.

He said he was also not a party to other e-mail in which the trio discussed how Xtron could take a 10-year loan to pay the church back, or in which Chew suggested issuing more bonds.

Kong also claimed that, as far as he knew, his wife's album was projected to sell at least 1.5 million copies. This also did not take into account revenue from tours and licensing, he said.

He added that he did not know how Wee came up with the 200,000 estimate. "My guess is that she was doing an ultra-conservative projection."

City Harvest founder Kong Hee knew that his wife's American album was not going to amount to enough - with a projected sale of just 200,000 copies.
But that did not stop him and several of the other accused from "investing" $13 million of the church's money into the project, the prosecution alleged yesterday.
They went ahead and bought bonds in Xtron, which managed Ms Ho Yeow Sun's pop career, despite knowing that too few albums would be sold for the church to recoup its money in time, the court was told.
"You knew... there was no reasonable prospect of success... Nevertheless, you and (several other defendants) went ahead with this (purchase of bonds)," Deputy Public Prosecutor Christopher Ong put to Kong.
"By entering into this transaction... you entered into a sham."
If just 200,000 albums were sold, Xtron would take 10 years to repay the money, instead of the two years as required by the bond agreement, he added.
The pastor, however, insisted that he was not told of the discussions about the "200,000" projection and was working on an estimated sale of 1.5 million copies of his wife's album.
Since the prosecution began its cross-examination of Kong on Tuesday last week, DPP Ong has tried to establish several key points.
One was that Kong oversaw the production of Ms Ho's album in the United States and how much was being spent on it.
Another was that the 50-year-old, along with his deputies, controlled the strings at church-linked companies such as Xtron, which was set up to disguise the church's financing of Ms Ho's music career.
Yesterday, DPP Ong got Kong to concede that there was no record of the church's management board approving the purchase of the Xtron bonds. He also pointed to statements given by deputy senior pastor Tan Ye Peng and former church investment manager Chew Eng Han to the Commercial Affairs Department.
In these statements, both said that Kong knew of the 200,000 figure, which Xtron accountant Serina Wee had put forward.
Chew went so far as to say that the estimate had "probably" come from Kong himself.
DPP Ong suggested to Kong that Chew was right on this. "We have heard many times... that you were the one liaising with (American music producer) Justin Herz on the budget projections.
"So the source of information about budget projections, including expense and album sales, would be you, correct?"
Kong agreed that he was the "main liaison", but insisted that he knew nothing of the 200,000 figure. He pointed out that he was not included in an e-mail where Chew, Tan and Wee - who were all in the courtroom yesterday - discussed the projected album sales before Xtron issued its bonds in 2007.
He said he was also not a party to other e-mail in which the trio discussed how Xtron could take a 10-year loan to pay the church back, or in which Chew suggested issuing more bonds.
Kong also claimed that, as far as he knew, his wife's album was projected to sell at least 1.5 million copies. This also did not take into account revenue from tours and licensing, he said.
He added that he did not know how Wee came up with the 200,000 estimate. "My guess is that she was doing an ultra-conservative projection."
- See more at: http://www.straitstimes.com/news/singapore/courts-crime/story/city-harvest-trial-church-invested-13m-though-album-unlikely-succe#xtor=CS1-10

City Harvest founder Kong Hee knew that his wife's American album was not going to amount to enough - with a projected sale of just 200,000 copies.
But that did not stop him and several of the other accused from "investing" $13 million of the church's money into the project, the prosecution alleged yesterday.
They went ahead and bought bonds in Xtron, which managed Ms Ho Yeow Sun's pop career, despite knowing that too few albums would be sold for the church to recoup its money in time, the court was told.
"You knew... there was no reasonable prospect of success... Nevertheless, you and (several other defendants) went ahead with this (purchase of bonds)," Deputy Public Prosecutor Christopher Ong put to Kong.
"By entering into this transaction... you entered into a sham."
If just 200,000 albums were sold, Xtron would take 10 years to repay the money, instead of the two years as required by the bond agreement, he added.
The pastor, however, insisted that he was not told of the discussions about the "200,000" projection and was working on an estimated sale of 1.5 million copies of his wife's album.
Since the prosecution began its cross-examination of Kong on Tuesday last week, DPP Ong has tried to establish several key points.
One was that Kong oversaw the production of Ms Ho's album in the United States and how much was being spent on it.
Another was that the 50-year-old, along with his deputies, controlled the strings at church-linked companies such as Xtron, which was set up to disguise the church's financing of Ms Ho's music career.
Yesterday, DPP Ong got Kong to concede that there was no record of the church's management board approving the purchase of the Xtron bonds. He also pointed to statements given by deputy senior pastor Tan Ye Peng and former church investment manager Chew Eng Han to the Commercial Affairs Department.
In these statements, both said that Kong knew of the 200,000 figure, which Xtron accountant Serina Wee had put forward.
Chew went so far as to say that the estimate had "probably" come from Kong himself.
DPP Ong suggested to Kong that Chew was right on this. "We have heard many times... that you were the one liaising with (American music producer) Justin Herz on the budget projections.
"So the source of information about budget projections, including expense and album sales, would be you, correct?"
Kong agreed that he was the "main liaison", but insisted that he knew nothing of the 200,000 figure. He pointed out that he was not included in an e-mail where Chew, Tan and Wee - who were all in the courtroom yesterday - discussed the projected album sales before Xtron issued its bonds in 2007.
He said he was also not a party to other e-mail in which the trio discussed how Xtron could take a 10-year loan to pay the church back, or in which Chew suggested issuing more bonds.
Kong also claimed that, as far as he knew, his wife's album was projected to sell at least 1.5 million copies. This also did not take into account revenue from tours and licensing, he said.
He added that he did not know how Wee came up with the 200,000 estimate. "My guess is that she was doing an ultra-conservative projection."
- See more at: http://www.straitstimes.com/news/singapore/courts-crime/story/city-harvest-trial-church-invested-13m-though-album-unlikely-succe#xtor=CS1-10

City Harvest Church financial oversight teams 'part of conspiracy' (ST: 26th Aug 2014)

CITY HARVEST TRIAL

They were supposed to act as checks and balances within City Harvest Church to prevent the misuse of church funds, but the oversight committees and the management board were run by founder Kong Hee and his alleged fellow conspirators.

Several of them had also kept information from fellow committee members not within the conspiracy, to prevent them from discovering the misuse of funds.

Deputy Public Prosecutor Christopher Ong made these points yesterday to rubbish Kong's claim that the church's "internal control bodies", such as the audit and finance committees, would have stopped the alleged sham transactions if they were really so.

Mr Ong added that, contrary to Kong's claims that auditors and lawyers had vetted the deals, the professionals had been given "an incomplete picture" by the defendants and therefore could not have detected the alleged misuse of funds.

Kong and five others face various charges for their part in allegedly misappropriating some $50 million of the church's funds to boost the music career of Kong's wife, Ms Ho Yeow Sun, and then covering up the misdeed.

The alleged sham transactions had taken place from 2007 to 2009.

Mr Ong showed that in 2007, Kong himself was president of the church's management board, while fellow defendants Tan Ye Peng and John Lam Leng Hung were treasurer and secretary, respectively.

There were seven other board members.

From September 2006 to June 2007, a few months before the first alleged sham transaction was carried out, four of the five finance committee members were those facing charges now.

They are Tan, Lam, Chew Eng Han and Serina Wee.

Lam was also chairman of the audit committee in 2007, while Tan and the sixth defendant, Sharon Tan, were members, said Mr Ong.

He added that in 2007 and 2008, Wee was the church finance manager until Sharon Tan took over.

Mr Ong also produced e-mail between Wee, Chew and Lam in 2007 to show that they had discussed hiding information from two other finance committee members.

Chew, the church's investment manager at the time, had asked Wee to withhold information about the alleged sham bonds from one of them "who is not 100 per cent with CHC".

Kong disagreed with Mr Ong's statement that Lam had been helping to hide the bonds' alleged sham nature so that the two members would not eventually question whether the bonds were genuine.

"Even if John failed in his corporate governance duties, it doesn't change the fact that when professionals were consulted, they didn't say the transactions had a sham nature," Kong said.
Mr Ong then pointed to a 2007 e-mail where Wee had asked Tan Ye Peng if money used to buy Ms Ho's CDs in Taiwan could be "not captured anywhere and we don't need to justify to the auditors".
On Kong maintaining that he and his defendants had sought auditor Foong Daw Ching's advice on the allegedly suspect transactions, Mr Ong said: "You and your co-accused would... tell (Mr Foong) an incomplete picture."
Disagreeing, Kong said the defendants had gone to Mr Foong as they wanted genuine advice.
They had been "pretty detailed in what was being spelt out, the transactions, the steps", he said.
He added: "If I know that my house is dirty and that somebody is scrutinising my home, why would I invite him to come to my home and have the possibility of finding dirt?
"I would want to stay as far away from him as possible."
- See more at: http://news.asiaone.com/news/singapore/city-harvest-church-financial-oversight-teams-part-conspiracy?page=0%2C1#sthash.qUFquq2Q.dpuf

Kong Hee: I was just ignorant (TNP: 26th Aug 2014)

He had claimed he was only helping out with liaisons and negotiations.

Why then did City Harvest Church (CHC) founder Kong Hee ask for the title of managing director to be printed on his Xtron namecard? The prosecution yesterday argued that it showed Kong's control of the music production firm.

And that Xtron was a "shell company" used by Kong, Tan and four other CHC leaders for the funnelling of the megachurch's building fund.

Deputy Public Prosecutor Christopher Ong presented an e-mail sent in 2006 by Kong, who had asked then if his namecard could bear the title of managing director.

The prosecution team said the title meant decision-making capabilities - something that Kong claimed he did not have with the firm. Kong's request prompted his deputy, Tan Ye Peng, to dissuade him, saying it would cause issues with "related-party transactions". So why did he want the title?

Kong said it was to give him more credence for negotiations with the Americans on his wife's English album.

Kong had maintained throughout the proceedings that he only had "some control" and "some influence" over the firm. He also said yesterday that he was not, and did not want to be Xtron's managing director.

"I didn't work in the corporate world, so I guess as a pastor I was just ignorant when it comes to positions and titles," he said.

Mr Ong replied: "You have consistently told us... you have always been very conscious of the importance of directors (and) that decisions must be made by the directors of Xtron. So how could you possibly think that it's not a big deal?"

Mr Ong also presented other e-mails and said Kong had placed various church members in key positions in Xtron.

Kong disagreed and said he merely "nominated" them.

"It's up to them to decide if they want to be directors," he said.

WITHHELD INFORMATION

The prosecution is cross-examining Kong, who is the second accused to take the stand after former board member John Lam. Yesterday the prosecution also asserted that Kong and his co-accused had withheld information from auditors and their own committee members.

For example, Lam had said in an e-mail that he was doubtful of fellow investment committee member Charlie Lay and asked "to test him out while it's still early".

Said Mr Ong: "By keeping information about the bonds and about Xtron from his own investment committee members...(it would) avoid the possibility that they might ask more questions and eventually question the genuineness of the bonds."

It was the same for CHC's adviser, auditor Foong Daw Ching, said Mr Ong.

"You and your co-accused... would consistently go to Brother Foong, tell him an incomplete picture of what was going on between the church and Xtron... and you would use his responses to gauge ... whether the (auditor) would raise issues at the end of the year." Kong disagreed on both occasions.

The six accused are on trial for allegedly misusing more than $50 million of church funds.

Some of this money was allegedly used to fund the music career of Kong's wife, singer Sun Ho. (See report below.)

The trial continues today.

ABOUT THE CASE

City Harvest Church founder Kong Hee and five others are on trial for allegedly misusing church funds through sham bonds.

This includes $24 million to fund the music career of Kong's wife Sun Ho, and another $26.6 million to cover up the first amount.

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

Kong, former board member John Lam, finance manager Sharon Tan, ex-investment manager Chew Eng Han, deputy senior pastor Tan Ye Peng and former finance manager Serina Wee face charges of criminal breach of trust and/or falsifying accounts. Prosecutors had sought to show how Xtron and Firna directors had simply done the bidding of the accused.

The defence has argued that the transactions were legitimate, with the accused acting "in good faith" on the advice of lawyers and auditors.
- See more at: http://news.asiaone.com/news/singapore/kong-hee-i-was-just-ignorant#sthash.mcgtFkNh.dpuf

He had claimed he was only helping out with liaisons and negotiations.
Why then did City Harvest Church (CHC) founder Kong Hee ask for the title of managing director to be printed on his Xtron namecard? The prosecution yesterday argued that it showed Kong's control of the music production firm.
And that Xtron was a "shell company" used by Kong, Tan and four other CHC leaders for the funnelling of the megachurch's building fund.
Deputy Public Prosecutor Christopher Ong presented an e-mail sent in 2006 by Kong, who had asked then if his namecard could bear the title of managing director.
The prosecution team said the title meant decision-making capabilities - something that Kong claimed he did not have with the firm. Kong's request prompted his deputy, Tan Ye Peng, to dissuade him, saying it would cause issues with "related-party transactions". So why did he want the title?
Kong said it was to give him more credence for negotiations with the Americans on his wife's English album.
Kong had maintained throughout the proceedings that he only had "some control" and "some influence" over the firm. He also said yesterday that he was not, and did not want to be Xtron's managing director.
"I didn't work in the corporate world, so I guess as a pastor I was just ignorant when it comes to positions and titles," he said.
Mr Ong replied: "You have consistently told us... you have always been very conscious of the importance of directors (and) that decisions must be made by the directors of Xtron. So how could you possibly think that it's not a big deal?"
Mr Ong also presented other e-mails and said Kong had placed various church members in key positions in Xtron.
Kong disagreed and said he merely "nominated" them.
"It's up to them to decide if they want to be directors," he said.
WITHHELD INFORMATION
The prosecution is cross-examining Kong, who is the second accused to take the stand after former board member John Lam. Yesterday the prosecution also asserted that Kong and his co-accused had withheld information from auditors and their own committee members.
For example, Lam had said in an e-mail that he was doubtful of fellow investment committee member Charlie Lay and asked "to test him out while it's still early".
Said Mr Ong: "By keeping information about the bonds and about Xtron from his own investment committee members...(it would) avoid the possibility that they might ask more questions and eventually question the genuineness of the bonds."
It was the same for CHC's adviser, auditor Foong Daw Ching, said Mr Ong.
"You and your co-accused... would consistently go to Brother Foong, tell him an incomplete picture of what was going on between the church and Xtron... and you would use his responses to gauge ... whether the (auditor) would raise issues at the end of the year." Kong disagreed on both occasions.
The six accused are on trial for allegedly misusing more than $50 million of church funds.
Some of this money was allegedly used to fund the music career of Kong's wife, singer Sun Ho. (See report below.)
The trial continues today.
ABOUT THE CASE
City Harvest Church founder Kong Hee and five others are on trial for allegedly misusing church funds through sham bonds.
This includes $24 million to fund the music career of Kong's wife Sun Ho, and another $26.6 million to cover up the first amount.
They are said to have done this through music production firm Xtron and glass manufacturer Firna, which are run by long-time supporters of the megachurch.
Kong, former board member John Lam, finance manager Sharon Tan, ex-investment manager Chew Eng Han, deputy senior pastor Tan Ye Peng and former finance manager Serina Wee face charges of criminal breach of trust and/or falsifying accounts. Prosecutors had sought to show how Xtron and Firna directors had simply done the bidding of the accused.
The defence has argued that the transactions were legitimate, with the accused acting "in good faith" on the advice of lawyers and auditors.
- See more at: http://news.asiaone.com/news/singapore/kong-hee-i-was-just-ignorant#sthash.mcgtFkNh.dpuf

Auditors got 'incomplete picture' of transactions (MyPaper: 26 Aug 2014)

SINGAPORE - They were supposed to act as checks and balances within City Harvest Church (CHC) to prevent the misuse of church funds, but the oversight committees and the management board were run by founder Kong Hee and his fellow conspirators.

Several of them had also allegedly kept information from fellow committee members not within the conspiracy, to prevent them from discovering the misuse of funds.

Deputy Public Prosecutor (DPP) Christopher Ong made those points yesterday to rubbish Kong's claim that the church's "internal control bodies", such as the audit and finance committees, would have stopped the alleged sham transactions if they were really so.

DPP Ong added that, contrary to Kong's claims that auditors and lawyers had vetted the deals, the professionals had been given "an incomplete picture" by the defendants and so could not have detected the alleged misuse.

Kong and five others face various charges for their part in allegedly misappropriating some $50 million of the church's funds to boost the music career of Kong's wife, Ho Yeow Sun, and then to cover up the misdeed.

The alleged sham transactions had taken place from 2007 to 2009. DPP Ong showed that, in 2007, Kong was president of the church's management board, while fellow defendants Tan Ye Peng and John Lam Leng Hung were treasurer and secretary, respectively. There were seven other board members.

From Sept 2006 to June 2007, a few months before the first alleged sham transaction was carried out, four of the five finance committee members were those facing charges now - Tan, Lam, Chew Eng Han and Serina Wee.

Lam was also chairman of the audit committee in 2007, while Tan and the sixth defendant, Sharon Tan, were members, said DPP Ong. He added that, in 2007 and 2008, Wee was the church finance manager until Sharon Tan took over.

DPP Ong also produced e-mail messages between Wee, Chew and Lam in 2007 to show that they had discussed hiding information from two other finance committee members. Chew, the church's investment manager at the time, had asked Wee to withhold information about the alleged sham bonds from one of them "who is not 100 per cent with CHC".
Kong disagreed with DPP Ong's statement that Lam had been helping to hide the bonds' alleged sham nature so the two members would not eventually question whether the bonds were genuine.

"Even if John failed in his corporate governance duties, it doesn't change the fact that when professionals were consulted, they didn't say the transactions had a sham nature," Kong said.
DPP Ong then pointed to a 2007 e-mail message in which Wee had asked Tan Ye Peng if money used to buy Ms Ho's CDs in Taiwan could be "not captured anywhere and we don't need to justify to the auditors".
On Kong maintaining that he and his defendants had sought auditor Foong Daw Ching's advice on the allegedly suspect transactions, DPP Ong said: "You and your co-accused would... tell (Mr Foong) an incomplete picture."

Disagreeing, Kong said the defendants had gone to Mr Foong as they wanted genuine advice. They had been "pretty detailed in what was being spelt out, the transactions, the steps", he said.

He added: "If I know that my house is dirty and that somebody is scrutinising my home, why would I invite him to come to my home and have the possibility of finding dirt? I would want to stay as far away from him as possible."
(not if you wanted to make use of him, and his trust in you, to put on a show to convince everyone that you are clean)

City Harvest trial: Prosecution says Xtron bonds were a sham (CNA: 26 Aug 2014)

SINGAPORE: In the high-profile City Harvest Church trial, the prosecution sought to prove that church founder Kong Hee gave the nod for the church to invest S$13 million in Xtron bonds, despite knowing that there was no reasonable prospect of financial returns from the investment.

The prosecution is aiming to show that the bonds were a sham, and simply a vehicle for Kong and his deputies to funnel church monies into funding the secular music career of his wife Sun Ho.

Between 2003 and 2007, Ho's Asian albums and US singles led to an almost S$10 million-dollar combined net loss for Xtron Productions, her artiste management firm. The prosecution said that to inject capital into Xtron, sponsors were approached, or the church would simply buy up her CDs as "evangelical tools".

Despite this, Kong told the church's executive members in 2007 that it was investing in Xtron bonds to maximize returns. He added that the church entered into bonds not just for investment purposes, but for the secondary purpose of funding the Crossover Project - the church's way of evangelising through secular pop music, and fronted by Ms Ho.

But the prosecution charged that the church entered into a transaction that was projected to fail, unless steps were taken to extend the maturity period for the bond. "By entering into this transaction, despite knowing that there was no reasonable prospect of returns, you entered into a sham transaction," said Deputy Public Prosecutor Christopher Ong.

ALBUM SALES

Emails revealed that several of the accused persons knew that projected revenue from the sale of 200,000 copies of Ms Ho's albums would not be enough to repay the bond on its two-year maturity date. In fact, it would take 10 years to repay the bond. Nevertheless, they went ahead with the transaction. The bond was later re-issued, and the maturity period extended, under an amended bond subscription agreement. 

The prosecution also charged that the auditor for the church and Xtron, Mr Sim Guan Seng, never knew about the circumstances surrounding the first Xtron bond transaction. "Don't you agree that if the church had entered into a bond which was known to be not repayable upon maturity, and that would require some kind of rolling over - that this is something that the auditors ought to have been told about?" asked Mr Ong.
Kong said he did not recall being told this, and that the church went ahead with the transaction based on projected sales of at least 1.5 million albums. He said that the church's former finance manager Serina Wee had just been "conservative" in her estimate of the 200,000 album sales. "As far as my state of mind was concerned, when the Xtron bond was executed, even though I didn't know the two-year maturity date, I had no problem believing that by the end of 2008, Xtron would be able to have commercial returns enough to pay off loans and have a net profit," he added.

KONG 'NOT SKILLED WITH FINANCIAL INSTRUMENTS'?

Kong said he left it to several of his deputies to resolve any issues before the church entered into the first bond transaction with Xtron, and one reason he did so was because he was not skilled in financial instruments.

When asked by the prosecution how it was possible that his deputies would have entered into the transaction without telling him that the bonds could not be repaid on time, Kong said: "I told them check with the lawyers, auditors, and check with the management board. And it's consistent with this idea that I left it to them to solve whatever problems that they needed to solve, and, if they cannot solve it, they would highlight to me or alert me." He added that no one had raised any red flags to him during the relevant period.

Earlier, the prosecution sought to prove that the church's fund manager AMAC Capital Partners, which was set up by co-accused Chew Eng Han, was just a tool for the church to carry out the sham transactions. It pointed to an email Kong wrote to the chuch's deputy senior pastor Tan Ye Peng, in which he wanted to offer salaries to Chew and his wife after Chew left his banking job to set up AMAC.

Kong wrote: "Can he (Chew) look for another job when he is helping us with AMAC? If he can't, in a sense, we do owe him his livelihood." Kong denied this, saying he was just trying to offer help as he was concerned that Chew was facing a "financial crunch" at the time.

Kong knew Xtron would not be able to redeem bonds from church: Prosecution (Today: 26th Aug 2014)

SINGAPORE — Even before they bought bonds from a church-linked entity, City Harvest Church leaders knew they would not be seeing returns when the bonds were due, argued prosecutors trying to nail six leaders for misuse of church funds today (Aug 26).

The church bought bonds worth S$13 million issued by Xtron Productions — which managed the pop music career of Ms Ho Yeow Sun, wife of church founder and accused Kong Hee — from August 2007. But a month before that, three of the accused persons, Serina Wee, Tan Ye Peng and Chew Eng Han, discussed how projected sales of Ms Ho’s debut English album in the United States would only generate a fraction of the revenue needed for Xtron to redeem the bonds.

The 200,000 copies expected to be sold would yield only S$2.17 million, and Xtron finance manager Wee said it would take 10 years to redeem the bonds. Under the agreement, the bonds were due to be redeemed in Aug 2009.

The prosecution’s case is that the Xtron bonds are a sham through which the church funnelled money to fund Ms Ho’s career, also known as the Crossover Project, which used pop music to evangelise.

There was no reasonable prospect of returns when the Xtron bonds matured, and Kong knew it, argued Deputy Public Prosecutor Christopher Ong. He argued that Kong must, in fact, have provided the sales projection, given his role in budgeting for the United States Crossover.

But under cross-examination today, Kong maintained he did not know about this “conservative” figure and insisted the projected sales at the time was 1.5 million copies, which would enable Xtron to repay its loans with money to spare by end-2008. Only Wee could explain the projected sales figure she had used, he said.

DPP Ong also tried to show today that the church helped Xtron’s bottomline even in the earlier, Mandopop phase of Ms Ho’s career: An April 2007 email among Kong, Tan and pastors and staff discussed the number of CDs church members would need to buy for Xtron to break even for the album Embrace. Kong explained that they were “working on the premise...that nobody outside of our church will buy it”, and added that members were not forced to buy her album.

The six church leaders — who also include John Lam and Sharon Tan — face criminal charges for misusing another S$11 million on sham bonds, and a further S$26.6 million to cover up the first amount.

The prosecution continues to cross-examine Kong tomorrow.

City Harvest Trial: No record of church management approving initial bond buy, admits Kong Hee (ST: 26th Aug 2014)

SINGAPORE - City Harvest founder Kong Hee admitted on Tuesday that, as far as he knew, there was no record of the church's management board approving a $13 million investment into Xtron Productions, the firm that managed his wife Ho Yeow Sun's music career.

In fact, the investment was "not an actual investment" at all, according to Chew Eng Han, the church's fund manager at the time.

Chew had told investigators from the Commercial Affairs Department that the transaction was simply to make sure Xtron had enough money for Ms Ho's career, since her secular music was part of a church-approved project to evangelise to non-Christians.

These revelations came to light on Tuesday as the prosecution sought to show that the $13 million Xtron bonds which the church invested in in 2007, were nothing more than shams to enable the misuse of church funds for Ms Ho's career.

Kong, Chew and four others face various charges for their part in allegedly cooking up sham deals to funnel $24 million out of the church's coffers, and then misusing another $26.6 million to cover up the first amount.

The prosecution has tried to prove that Kong and his deputies controlled Xtron through puppet directors who were also church members, and also held key positions in City Harvest's oversight committees such as its audit and finance committees. This enabled them to rubberstamp the sham deals, alleges the prosecution.

Deputy Public Prosecutor Christopher Ong zeroed in on the Xtron bonds yesterday, which were the first in the series of alleged suspect transactions. He called the bonds "just an excuse to transfer the church's building fund to Xtron".

Kong had insisted that the church board approved the bonds, but conceded in court that there was no record of this. He said he had trusted two fellow defendants, Chew and deputy senior pastor Tan Ye Peng, to seek the board's approval.

"They didn't highlight anything negative to me or raise any issues, so I assumed all necessary approval was given," he said.

Mr Ong had also put to Kong that Chew set up investment firm AMAC Capital Partners and was appointed the church's fund manager to help carry out the sham deals. He produced an e-mail in which Kong had offered $5,000 salaries to Chew and Chew's wife after Chew left his banking job to set up AMAC.

Kong disagreed strenuously and said he had offered the salaries because Chew was "having a difficult time" after leaving his job. "It was brought to my awareness that he was facing a financial crunch so I just wanted to help him," Kong said. He also stressed that the bond investment was genuine as it offered good returns at 7 per cent per year.