Church leaders hid from board Xtron’s bank loan to buy property (Today: 30 Aug 2014)

SINGAPORE — When rumours began swirling online after City Harvest Church had bought a multimillion-dollar stake in Suntec Singapore Convention and Exhibition Centre, accountant Serina Wee’s brother voiced his concerns to her after he had read a blog post in March 2010.

In an email to co-accused Tan Ye Peng and Chew Eng Han about her brother Roland’s concerns, Wee — who is among six church leaders on trial for misusing church funds — said her brother was raising questions he felt any financially-trained person would have asked.

Mr Wee had asked about church-linked entity Xtron Productions, which had previously helped acquire property for the church. He said anyone looking at Xtron’s accounts would have asked where its S$6 million share capital had come from.

Wee wrote in her email to Tan and Chew that she could not tell her brother that Xtron had taken a bank loan to purchase a property, The Riverwalk, and that it was the bank that wanted Xtron to have a certain amount in capital.

Yesterday, prosecutors grilled defence witness and church founder Kong Hee on why he and his co-accused had failed to tell the church board and executive members about Xtron’s bank loan of S$10.7 million to buy Riverwalk in late 2008 and the mortgage taken on the property. The board and members were instead told that the S$17.55 million Riverwalk purchase was funded by bonds Xtron issued to the church, when it was, in reality, funded by both the bank loan and bond proceeds.

Deputy Public Prosecutor Christopher Ong argued that the accused persons had wanted to conceal the fact that Xtron had already used S$13 million of the bond proceeds for the church’s Crossover Project, through which Kong’s wife Ho Yeow Sun embarked on a pop music career to reach out to non-Christians.

However, Kong denied the charge. He said he preferred to share as little as was legally possible about the Xtron bonds and how they were used to finance the Crossover because he did not want to affect Ms Ho’s legitimacy as a secular pop singer.

He also said he did not know why Wee could not tell her brother about the 2008 bank loan — one-and-a-half years after it had taken place.

The six church leaders face three to 10 charges each for using S$24 million of church building funds to invest in sham bonds in Xtron and Indonesian company PT The First National Glassware (Firna), before misusing another S$26.6 million to cover up the first amount.

The prosecution also sought to show that Kong, Wee, Tan and Chew had controlled when and how proceeds from the Firna bonds would be used. Emails produced showed Kong’s frustration when fund transfers to pay for the Crossover were held up in Firna owner and church member Wahju Hanafi’s bank account. Kong told Wee in an email in November 2008: “We really must impress upon (Mr Hanafi) the urgency of returning the money!”
("returning"? wait. whose money is it?)

The trial resumes on Sept 8 with Kong continuing to be cross-examined.