Hearing adjourned last week for parties to discuss evidence tendered
THE lead Commercial Affairs Department (CAD) officer in the probe
against six City Harvest Church figures for alleged fraud is expected to
take the stand tomorrow.
The hearing was stood down last Friday after barely two hours as
parties sought an adjournment to iron out administrative matters.
Under discussion were exhibits - understood to be mostly e-mail
involving the accused - to be tendered as evidence in court through the
CAD officer.
Pastor Kong Hee and five others are contesting charges of criminal
breach of trust and falsifying accounts by misappropriating $24 million
in bogus bond investments and another $26.6 million to throw auditors
off their scent.
In the third tranche of the trial, which started two weeks ago, Baker
Tilly assurance partner Tiang Yii and managing partner Sim Guan Seng
have testified as prosecution witnesses.
Ms Tiang led the church's audit as engagement partner from January 2006
to June 2007, and did the same for church-linked music production firm
Xtron in 2006 and 2007.
Mr Sim then took over, presiding over the church's audit in financial years 2008 and 2009, and Xtron in 2008.
He had repeatedly raised the red flag about church money going to
Xtron, saying that it was "not exactly the most financially healthy
company".
The audit manager for the two Baker Tilly partners' respective audit
years, Ms Foong Ai Fang, is expected to testify as a prosecution witness
following the CAD officer.
The defence has argued that Baker Tilly, as a firm, would have been
well aware of the transactions entered into by the church during the
material period.
Some information in documents and e-mail shown by the prosecution to Mr
Sim - who said he was seeing them for the first time - had long existed
in Baker Tilly's archives.
The City Harvest leaders were communicating with the firm's
then-managing partner Foong Daw Ching, a long-time churchgoer
endearingly known to them as "Bro Foong". They would have expected him
to pass on the information, defence counsel argued.
E-mail presented in court have shown at least one "off-the-record" meeting with Bro Foong.
Mr Sim said an auditor's key role was not to detect fraud, and he had deemed the accounts intact when he signed them off.
Defence lawyers have also argued that church leaders only entered into
the transactions on the advice given by Mr Sim to "keep it simple",
saying that this impression precipitated the early redemption of bonds
so they would no longer appear on the books.
Mr Sim said: "I did not tell the client that I wanted the bonds off the books."
Asked to confirm if several entries in the church books, recorded as
"investments", were accurate and not misleading or false, Mr Sim said
"yes".
But he added a caveat during re-examination that the answers were based on what he knew when he signed off the audits.
He said an auditor's role was not to detect fraud, and if privy to
documents and e-mail that may suggest that the transactions were
"actually not real investments", he would not have agreed to the
classification.
"The way it is recorded is actually the client's responsibility," he
said. "If it's supposed to be a transaction done to hide something,
obviously they will not record it properly."
On the point that the money was eventually repaid with interest, the
prosecution asked: "If the return on investment is, in fact, paid with
the investors' own money, would that be considered a genuine return on
investment?"
Mr Sim replied: "No."
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