SINGAPORE — In the two months before Commercial Affairs Department investigations into their alleged misdeeds started in 2010, City Harvest Church leaders now on trial appeared to be frantically sourcing for loans, even those that came with interest rates of up to 16 per cent.
The purpose of the loans was unclear, but documents tendered in court showed multiple discussions on funds-sourcing from late-March 2010 involving four of the accused – church co-founder Kong Hee, Tan Ye Peng, Chew Eng Han (who has since left the church) and Serina Wee Gek Yin.
In a Blackberry discussion on March 30, 2010, Kong had asked church pastor Aries Zulkarnain — who is not among the accused — and Chew if they had time to “plug the hole” should an extraordinary general meeting be called on April 18. Chew replied that “it is too tight if we want actual funds to have been paid”, and later mentioned several possible lenders.
Among those asked for loans was Indonesian businessman Wahju Hanafi, who took the witness stand for the fifth day today.
On Apr 2, 2010, he had emailed Kong and Tan Ye Peng to express his joy at securing a US$21.75 million loan from CIMB bank. The money was to redeem the bonds his company PT The First National Glassware (Firna) had issued to Xtron Productions, to buy over his father-in-law’s remaining stake in Firna and for capital expenditure, Mr Hanafi told the court.
In his reply the next day, Kong asked if “we” could borrow US$5 million from Mr Hanafi. The loan request was increased to US$8 million later that day.
The search for funds continued into May that year, with another Blackberry discussion among Chew, Kong, Wee, Tan Ye Peng, Mr Zulkarnain and Xtron director Choong Kar Weng. Chew sketched out a scenario with loans taken from his friend and Mr Zulkarnain’s friend at 16 per cent interest. He said these would help repay Firna’s loan from CIMB whilst “we” chalk up returns from investing other individuals’ money.
Kong said to “activate” Chew’s friend. “We need to act fast. This is urgent!!!” he wrote.
Mr Hanafi was also shown an email he had written to his wife on March 26, 2010, saying “they want to find quick cash to pay us so I can pay back (Firna’s) bond issued to (Xtron)”. “They” referred to Chew, Wee, Mr Choong and former Xtron director Koh Siow Ngea, he told Deputy Public Prosecutor Tan Kiat Pheng.
This funds search was prompted by an anonymous person who had “(threatened) to open up all our connection w/ Xtron n Sun’s project etc”, Mr Hanafi wrote to his wife. He told DPP Tan he had probably heard this from others in church.
Earlier today, DPP Tan had questioned Mr Hanafi on negotiations that took place for Firna bonds issued to Xtron. The bond service agreement was drafted by law firm Rajah & Tann. Mr Hanafi said two to three rounds of negotiations took place, each lasting about 30 minutes, on interest rates and other details. Shown an email by Chew to Wee and her employee that said he would leave the interest rate up to them, Mr Hanafi said it was up to him whether to accept the rate.
The S$11.455 million used by Xtron for the Firna bonds is allegedly part of S$26.6 million “round-tripped” by the accused, to show sham bond investments purportedly redeemed, but in reality using the church’s own funds, prosecutors charge.
Mr Hanafi will be cross-examined by defence lawyers tomorrow (Sept 6).
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