Former Xtron director admits he was not in control of his firm (CNA, 3 Sept 2013)

SINGAPORE: The trial of six leaders of City Harvest Church continued on Tuesday with a former Xtron Productions director admitting he was not in control of his firm.

Indonesian businessman Wahju Hanafi said he borrowed more than S$1.66 million from Xtron through third parties in 2007, at a time when he was still its director.

He explained that in late November 2007, his own business The First National Glassware -- also known as Firna -- ran into financial difficulties.
The court heard that in emails between the former Xtron director and the founder of City Harvest Church Kong Hee in late November 2007, the pastor decided to help Mr Hanafi.

Two loans amounting to more than S$1.66 million were made to Mr Hanafi via Xtron.

One set of loan amounted to more than S$674,000, where Mr Hanafi had to pay an interest rate of seven per cent, while the other loan came up to S$990,000.

Mr Hanafi said the loans were decided by Tan Ye Peng, who is on trial, along with Kong and four other church leaders.

When asked why Tan was the one who decided on the loan even though Mr Hanafi was at that time the company's director, the witness said it was Tan's choice.

The prosecutor then pointed out that by then, Mr Hanafi had no control over Xtron even though he was its director.

To this, the witness said: "As I said again, at the end of the day, whatever decision he made on Xtron, and if Xtron were to lend me money back to me there's nothing wrong about it because I have personal guarantee in that company."

The prosecution also noted that these loans were made in 2007, at a time when Xtron needed funding for the Crossover Project.

The Crossover Project is part of the church's aim to reach out to the secular world through singer Sun Ho's music.

The prosecution argued that Xtron, which used to manage singer Sun Ho, was meant to be a vehicle for the accused to commit round-tripping via "sham bond investments".

Besides charges relating to the misuse of church funds, four of the accused are also alleged to have tried to cover this up through "sham bond investments".

On Tuesday, Mr Hanafi also testified that his firm, Ultimate Assets, was a shell company set up some time in early 2007 to act as a "financial vehicle" to lend money to his other company, Firna.

He told the court that Ultimate Assets eventually bought over Xtron.

The trial continues.