Kong knew Xtron would not be able to redeem bonds from church: Prosecution (Today: 26th Aug 2014)

SINGAPORE — Even before they bought bonds from a church-linked entity, City Harvest Church leaders knew they would not be seeing returns when the bonds were due, argued prosecutors trying to nail six leaders for misuse of church funds today (Aug 26).

The church bought bonds worth S$13 million issued by Xtron Productions — which managed the pop music career of Ms Ho Yeow Sun, wife of church founder and accused Kong Hee — from August 2007. But a month before that, three of the accused persons, Serina Wee, Tan Ye Peng and Chew Eng Han, discussed how projected sales of Ms Ho’s debut English album in the United States would only generate a fraction of the revenue needed for Xtron to redeem the bonds.

The 200,000 copies expected to be sold would yield only S$2.17 million, and Xtron finance manager Wee said it would take 10 years to redeem the bonds. Under the agreement, the bonds were due to be redeemed in Aug 2009.

The prosecution’s case is that the Xtron bonds are a sham through which the church funnelled money to fund Ms Ho’s career, also known as the Crossover Project, which used pop music to evangelise.

There was no reasonable prospect of returns when the Xtron bonds matured, and Kong knew it, argued Deputy Public Prosecutor Christopher Ong. He argued that Kong must, in fact, have provided the sales projection, given his role in budgeting for the United States Crossover.

But under cross-examination today, Kong maintained he did not know about this “conservative” figure and insisted the projected sales at the time was 1.5 million copies, which would enable Xtron to repay its loans with money to spare by end-2008. Only Wee could explain the projected sales figure she had used, he said.

DPP Ong also tried to show today that the church helped Xtron’s bottomline even in the earlier, Mandopop phase of Ms Ho’s career: An April 2007 email among Kong, Tan and pastors and staff discussed the number of CDs church members would need to buy for Xtron to break even for the album Embrace. Kong explained that they were “working on the premise...that nobody outside of our church will buy it”, and added that members were not forced to buy her album.

The six church leaders — who also include John Lam and Sharon Tan — face criminal charges for misusing another S$11 million on sham bonds, and a further S$26.6 million to cover up the first amount.

The prosecution continues to cross-examine Kong tomorrow.