In the latest turn of events in the ongoing trial of
Singapore's City Harvest Church, auditor Sim Guan Seng had asked
for the prospectus and valuation of a fund that City Harvest Church had
pumped S$11.4 million in, but did not receive any.
Yesterday, Baker Tilly auditor Sim Guan Seng said the money appeared to
have made the rounds via a series of transactions, creating the impression that the church’s investment had
been redeemed.
Sim, a prosecution witness taking the stand for the third day yesterday
in the trial of six City Harvest Church leaders, was shown a table on
the movement of funds that was shared in emails in October 2009 among
three of the accused, Serina Wee, Sharon Tan and Chew Eng Han, who has
since left the church.
Chew’s company, AMAC Capital Partners, was the church’s investment
manager. The other accused are church co-founder Kong Hee, his deputy
Tan Ye Peng and former board member John Lam.
It is the prosecution’s case that in addition to funnelling S$24
million of church building funds into sham bonds, the accused
“round-tripped” another S$26.6 million to cover up the initial amount
and throw auditors off the scent of the bogus bonds. The S$11.4 million
was part of the “round-tripping”, where investments were purportedly
redeemed by moving money among various entities.
Sim said that from the table on the movement of funds, it appeared the
money was invested in AMAC Capital Partners’ Special Opportunities Fund
and then loaned to Indonesian company PT The First National Glassware
(Firna) to redeem allegedly sham bonds it had issued to the church. In
other words, the church seemed to have used its own money to repay
itself for the bonds bought.
Advance rentals paid to audio-visual firm Xtron Productions appeared to
have been used to redeem the church’s Firna bonds and then to redeem
the Special Opportunities Fund investment. “So, the money has gone one
round,” said Sim.
If he had been privy to this information earlier, he would have
questioned if the accused were hiding something and if the Special
Opportunities Fund was really for investment purposes.
The court heard yesterday that Chew, in an email to Sharon Tan a day
before some church staff and board members met Sim and his colleague on
December 31, 2009, had said to ask Lam to “try to steer away from the
topic of what (the Special Opportunities Fund) invests in”.
Sim was the lead auditor for Xtron in 2008 and for City Harvest from
that year. He also testified yesterday that the S$46 million advance
rental agreement between the church and Xtron made no commercial sense
and that he had never heard of parties paying eight years of rental in
advance. The rent charged each year for the Expo hall leased by Xtron
was S$7 million and Wee had indicated in an email that the rate was
“just an arbitrary figure”.
Sim — who had been called “difficult” by some of the accused in emails —
told the court that Baker Tilly, where he is managing partner, has
resigned as auditors of both Xtron and the church.
The firm resigned as the church’s auditor last October as “we have not
been able to get any satisfactory answers” from the church’s board on
issues raised. “We felt that we were unable to discharge our duty as
auditors given the circumstances,” Sim said.
As for Xtron, it was the concern over the nature of transactions, given its part in the ongoing trial, he added.
He will be cross-examined by the defence today.
Kong Hee and five of his deputies are accused of misusing millions of
dollars belonging to the church, between January 2007 and October 2008.
Kong Hee, John Lam, Chew Eng Han, Tan Ye Peng and Serina Wee are
accused of channelling S$24 million into two companies - Xtron
and PT the First National Glassware (Firna) - to boost singer
Sun Ho’s career.
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