Kong ‘updated on bond repayment as he helped create sham’ (Today: 28th Aug 2014)

SINGAPORE — City Harvest Church (CHC) founder Kong Hee was kept updated on the repayment of an investment in a church-linked entity, because he was among five leaders who “created” the problem of a sham investment in the first place, the prosecution argued yesterday.

Kong was kept updated by three other church leaders — Serina Wee, Tan Ye Peng and Chew Eng Han — on how audio-visual firm Xtron Productions was going to repay the church for a bond investment, Kong told deputy public prosecutor Christopher Ong.

But Kong, 50, flatly denied the investment in Xtron was a sham. The church leaders were working on the repayment of the investment, complete with interest, because they were partners with Xtron, he said. Xtron managed the pop music career of Kong’s wife Ho Yeow Sun. Her music was part of the Crossover Project, a church-approved bid to spread the gospel.

Kong and five other church leaders — including Wee, Tan and Chew — are accused of misusing S$24 million of church building funds on sham bond investments in Xtron and Firna, an Indonesian firm owned by a church member. They then allegedly misused another S$26.6 million to cover up the first amount.

Pointing to BlackBerry messages and emails where the accused discussed discounts on interest charged to Xtron and adjustments to retainer fees CHC would pay Xtron, DPP Ong argued they were able to manipulate transactions between the church and Xtron and manage Xtron’s finances.

Kong replied that the emails were merely proposals that required the approval of Xtron directors. The prosecution had previously argued that the Xtron directors rubber-stamped decisions made by the accused.

Mr Ong also questioned why Kong wanted to know in March 2010 the amount of investment profits earned by the church outside of the Xtron and Firna bonds — described by Tan Ye Peng as “actual money … from the ‘world’” — when he tasked co-accused and the church’s former finance manager Sharon Tan to find out.

“I put it to you that the reason you discounted the investment profits from the Xtron and Firna bonds is because you knew that it was really just a case of church money being cycled through particularly Xtron to pay the interest back to the church,” Mr Ong said.

Kong disagreed and said Xtron could have earned revenue through various means, including projects unrelated to the church. He denied any “sinister slant” in Tan Ye Peng’s words.