CHC trial: Transaction with Xtron ‘accurately recorded’ (Today: 24 Jan 2014)

SINGAPORE — Between April and October 2009, when City Harvest Church was looking at properties to acquire, its investment manager Chew Eng Han — one of six church leaders facing criminal charges for misappropriation of funds — looked at seven properties, including the Singapore Flyer, Capitol Theatre, the future SportsHub and the then-defunct Hollywood Theatre beside Lion City Hotel.

Along the way, he had difficulty getting financing from banks, showed emails tabled yesterday by his lawyer, Senior Counsel Michael Khoo.

These were events leading up to the church entering into a S$46 million advance rental agreement with audio-visual firm Xtron Productions in October 2009. The church had intended for some of the funds to be used by Xtron to secure a property on its behalf.

Mr Khoo was trying to show that reasons for entering into the advance rental agreement were genuine in his cross-examination of prosecution witness and Baker Tilly auditor Sim Guan Seng yesterday.

The prosecution’s case is that the agreement was a sham and that S$12 million paid by the church under the agreement was “round-tripped” — used to buy bonds from Indonesian firm PT The First National Glassware, which then used it to repay a previous loan from investment firm AMAC Capital Partners, which is owned by Chew. The money was then allegedly used by AMAC to redeem an investment made earlier by the church.

Four of the six accused church leaders — Serina Wee, Tan Ye Peng, Sharon Tan and Chew, who has left the church — are charged with criminal breach of trust and falsification of accounts for S$26.6 million of allegedly misappropriated church funds, which includes the S$12 million.

Yesterday, defence lawyer N Sreenivasan, who represents Tan Ye Peng, sought to show there was no falsification of accounts. When questioned by Senior Counsel Sreenivasan, Mr Sim agreed that when Xtron redeemed bonds worth S$21.5 million issued to the church via the advance rental agreement, the transaction was “truly, fairly and accurately” reflected by removing the bonds from the church’s accounts and entering the sum as an asset — the prepayment of rental. The defence’s position is also that no money related to the criminal charges was lost.

Mr Sim also agreed with Mr Sreenivasan that some emails among Wee, Sharon Tan and Tan Ye Peng discussing transactions would not have been submitted to auditors for audit purposes. The prosecution had earlier shown some of these emails to Mr Sim and the auditor said they would have raised red flags, had he been privy to the information.

The prosecution re-examines Mr Sim today.