$2m to Xtron for 'legitimate services' (ST: 29th Aug 2014)

Pastor denies church money was slated to help music firm pay off loans

CITY Harvest founder Kong Hee insisted that there was nothing fishy about plans to pay Xtron $2 million of the church's money to fund, among other things, a promotion blitz for the American album of his wife, Ms Ho Sun Yeow.

But the prosecution suggested yesterday that this was just one of several schemes hatched by Kong and his deputies in a bid to use church funds to help the production firm pay its debts.

"We have, in fact, seen how... retainers would be adjusted, rental increased or expenses re-allocated to ensure that Xtron's cash flow was solved," Deputy Public Prosecutor Christopher Ong put it to Kong during cross-examination.

The senior pastor and five others face various charges for their part in allegedly misusing some $50 million of church funds to boost Ms Ho's music career and to cover up the misdeed.

In 2007, the church agreed to a deal to buy $13 million of Xtron bonds to help finance her debut American album. Xtron had two years to repay the money, along with interest.

But in a 2009 e-mail, church finance manager Sharon Tan told Kong that the church would need to pay Xtron $401,000 more in retainer fees. This was to make up for a reduction in the rent City Harvest paid Xtron for a property.

"What Sharon is really describing is (the church) taking with the right hand but giving back with the left hand to Xtron, and that doesn't make commercial sense from CHC's point of view," said Mr Ong.

In an e-mail a year earlier, former Xtron accountant Serina Wee had also referred to the $2 million payment as one way to help Xtron if it could not recoup enough from Ms Ho's album sales.

Kong said yesterday the $2 million was part of "tentative provisions" to finance a slew of events to show the church's support for the album. But he said the payment would have been legitimate as the church would have got extra services from Xtron.

"During the run-up of the album launch all the way to the actual launch (in 2009), there would have been many, many events that the church would get into. It was much like what had happened in Asia for (Ms Ho's) Asian album launches," he said. The events included outreach concerts in the US and Asia, and "a lot of gospel events".

The money would have paid for the "real, legitimate and commercially viable" services needed to organise the events, said the 50-year-old.

He also again rejected the prosecution's allegation that he and his deputies were the ones who were secretly in control of Xtron, enabling them to rubber-stamp sham deals and illegally funnel church funds into Ms Ho's career.

Mr Ong yesterday pointed out that Kong, Tan, Wee and deputy senior pastor Tan Ye Peng were the ones involved in e-mail discussions about how Xtron could meet its loan obligations, even though none of them belonged on its management.

But Kong said he and the others were "partners working with Xtron's management" on the Crossover Project, a church project which used Ms Ho's secular music to evangelise. "Ultimately, the Xtron directors have to look at all the plans, and they have to authorise it on their end."