Advance Rental
This is another challenge for me to write in my blog. I will call it the “two plans running in parallel”
challenge. If you have been following my blog I only wrote about Eng
Han’s cross-examination of Sharon on Kong’s confession letter.
This page is about DPP’s
cross-examination of Sharon on 24 and 25 September 2014 (Morning
session) and Eng Han’s cross-examination of Sharon on 19 September 2014.
When Eng Han cross-examined Sharon, he
asked Sharon to open an email dated on 24 April 2009, claimed by Sharon
Tan that Eng Han is aware of the content of the email.
Sharon’s Evidence-in-Chief on 16 September 2014
I need to bring you back to what
happened during Sharon’s EIC on 16 September 2014. Mr Ramesh brought up a
new email evidence in court. This is an email dated on 25 April 2009 that Sharon sent to Pastor Tan and Jacqueline Tan and forwarded to Serina Wee.
The content of the email is about John Lim’s concerns after he attended EOGM. Sharon wrote from A to 0 (15 concerns).
Sharon said that at that point in time,
she was the finance manager of CHC and she should be concerned with
matters relating to the finance or the accounts. But in terms of
investment and bonds, she was not involved in structuring it or planning
it and so she brought up to the respective persons to find a solution for what was listed in the email.
When Mr Ramesh asked her who are those respective persons? Sharon said it would be Pastor Tan, Serina and Eng Han.
Judge asked: “Sorry, Ms Tan, before we
move on to that. Your last answer, you said that it would be Pastor Tan,
Serina and Eng Han.”
Sharon: “Yes”
Judge: “Is Eng Han copied in this email?”
Sharon: “No, your Honour, but at that point in time I was aware that this matter was brought it up to him.”
Sharon’s EIC said that scenario 2 (See the table below) was a secondary consideration because of John Lim’s email.
Eng Han’s cross-examination of Sharon Tan on 19 September 2014
Note the sequence of events Eng Han brought Sharon through
1. Email dated 9 April 2009 sent by Sharon Tan to Ye Peng and John Lam.
One of the point in this email is Mr Sim Guan Seng hopes to see this Xtron issue being solved in this FY.
2. Sharon had the strong impression given by Mr Sim Guan Seng, that he wants the bonds off the book.
3. This audit issue related to valuation of the bond. Sharon conveyed “Mr Sim Guan Seng wants the bonds off the book” to Eng Han.
4. Email dated on 25 April 2009 sent by Sharon to Pastor Tan and Jacqueline Tan and forwarded to Serina Wee. (John Lim’s 15 concerns)
The following email events triggered after 25 April 2009
| Email Date | Property of Interest | Eng Han’s involvement | Who was involved in the planning |
| 25 April 2009
E-501 |
Advance Rental with scenario 1 and scenario 2 For Riverwalk (Sharon Tan said typo error should be Expo) | Not in the loop | Sharon Tan, Jacqueline TanTan Ye Peng |
| 2 May 2009 E-502 | Advance Rental for Suntec | Eng Han suggested upfront rental to buy shares in JV Co which will buy Palm Oil (Suntec) | Sharon said EH spoke to her on the phone and she typed out Eng Han’s suggestion. Sharon sent to John Lam and Serina Wee.Then on 2 May 2:58pm Serina Wee sent to EH |
| 2 May 2009, 2:58pm E-59 | Advance Rental with scenario 1 and scenario 2 and scenario 3 For Riverwalk and Expo (Sharon Tan said typo error should be Expo) | Not in the loop | Serina to Sharon Tan. What Pastor Tan asked for |
EH: “So E-502 has to do with the Palm
Oil deal. At the same time, this E-59 has to do with the Expo Riverwalk
advance rental. Correct?
Sharon: “Yes, your Honour.”
EH: “So, really, there were two plans running in parallel at almost the same time. Correct?”
Sharon: “Yes, your Honour.”
<….questions and answers…>
Sharon: “Your Honour, that was why Eng
Han’s solution was adopted in the end, because I am only a finance
manager, Pastor Tan was only a pastor…”
EH: “Let’s move on to email E-57, just
the first page, point number 1. This is sent from Serina Wee to yourself
again. Serina Wee is asking: “Do we still want to go ahead with the scenarios we worked out to advance rental for Expo to redeem the Xtron bonds?”
So here is 14 May 2009, and Serina Wee is requesting do you go ahead
with the scenarios that you have planned. And now it still involves
advance rental for Expo. There is no Palm Oil being mentioned. Right? So
this has to do with the alternative plan that’s running in parallel. Right?”
Sharon: “Yes”
<…. questions and answers…>
EH: “So it is clear to you that, in my communications with you, the ALRA was to be done only if we had a property acquisition?”
Sharon: “Yes, your Honour”
DPP’s cross-examination of Sharon Tan on 24 – 25 September 2014 (morning session).
Now we see what is the Deputy Public Prosecutor’s (DPP) position.
DPP opened the minutes that were
recorded of the discussion with Mr Sim that he was concerned about
finding out what the commercial rationale of the Amended Xtron Bond.
There is no record of “Mr Sim wants to see the Xtron bonds redeemed and
cleared from the books by the end of this financial year”.
DPP: “I put it to you, Ms Tan, that is a
lie because your own counsel has not put to Mr Sim that he said to all
of you at this meeting very clearly to clear the bonds off the book of
CHC. It is just another lie that you have come up with in your
evidence.”
DPP went through the same emails (John Lim’s concerns email, E-501, E502, E-59) with Sharon
DPP: “From what we see then, Ms Tan, isn’t it clear that you, Serina and Ye Peng were planning scenarios 1 and 2 from the perspective of Xtron raising enough funds to redeem the Xtron bonds and not from the perspective of the church deciding on an appropriate length of Expo lease to pay advance rental for?”
Sharon replied was she just worked out with Serina the visibility on the cashflow. She is not able to answer for Pastor Tan.
DPP: “You were not just being asked to act like a human calculator by Pastor Tan, right?……. So you are not just inputting figures, there is actually substantive thinking on your part as well, because that is what you were asked to do by Tan Ye Peng. Right?”
Sharon: “Your Honour, I really didn’t put in any substantive thinking when the scenarios were given to me.”
<…. some more puts and answers….>
DPP: “I put it to you, Ms Tan, that again, you are not telling the truth about your involvement scenario planning, and you are trying to minimize your role in the scenario planning.”
Sharon: “Your Honour, I disagree.”
In addition to the emails (John Lim’s
concerns email, E-501, E502, E-59), the DPP brought up some Blackberry
messages discussions, which Eng Han was involved.
The blackberry message dated 10 April 2009 (Eng Han sent to Ye Peng)
Eng Han wrote:
I have thought through the RTO vehicle plan. I think we can clear the bonds in Firna and Xtron. However for Xtron case we need the deposit from CHC for renting palm oil to help clear the big amount of crossover debts of $13m, as well as profit from selling Riverwalk to the RTO vehicle.
Other Blackberry messages were discussed.I have thought through the RTO vehicle plan. I think we can clear the bonds in Firna and Xtron. However for Xtron case we need the deposit from CHC for renting palm oil to help clear the big amount of crossover debts of $13m, as well as profit from selling Riverwalk to the RTO vehicle.
<…. some puts and answers….>
DPP: “I put it to you, Ms Tan, that you
took part in the scheme together with Ye Peng, Serina and Eng Han to
create the appearance that the Xtron and Firna bonds had been redeemed
early because you wanted to avoid disclosure and valuation issues in
relation to these bonds, and also possible consolidation of the CHC and
Xtron accounts in subsequent audits.”
DPP: “I put it to you, Ms Tan, that you
took part in the scheme together with Ye Peng, Serina and Eng Han to
create the appearance that the Xtron and Firna bonds had been redeemed
early because you wanted to avoid disclosure and valuation issues in
relation to these bonds, and also possible consolidation of the CHC and
Xtron accounts in subsequent audits.“
DPP: “I put it to you that that is why
you have lied to the court that it was Mr Sim who told you all to clear
the bonds off the books. You lied because you want to hide the fact that
it was you, Ye Peng, Serina and Eng Han who planned to remove these
bonds from the books, to avoid disclosure, valuation and consolidation
issues.”
DPP brought up another email dated 2 July 2009 that involved Serina Wee, Sharon Tan and Ye Peng.
In this email they were planning to redeem the $21.5m Xtron bonds using the following three methods:
1. Increase Expo rental to $35k per usage
2. Prepay Expo rental for 6-years
3. Sell Riverwalk
Other methods were discussed as followed:
1. General Funds to donate to other organization, which in turn engage Xtron services.
2. Increase retainer.
3. CHC to engage more services from Xtron.
DPP: “I put it to you, first of all,
that what this email shows is that as far as you and Serina were
concerned in doing this planning, what you wanted to make sure was
simply that Xtron got enough money to redeem the Xtron bonds before the
financial year end. So this advance rental payment was just a coverup
story that was going to be used to justify pumping a lot of money into
Xtron. Do you agree or disagree?
Sharon: “Your Honour, I disagree.”
<….questions and answers…>
Sharon confirmed that she was involved
in coming up with the proposals but she cannot confirm with the DPP that
the idea was from her.
DPP: “… you are evading the questions,…I
will repeat it. Whether or not the idea spelt out … originated from
you, the fact of the matter is you adopted it as part of the analysis
you intended to send Pastor Tan as the plan for redemption of the Xtron
bonds. Do you agree?
Sharon: “Your Honour, I never disagree
that I adopted it as part of the analysis for me to send to Pastor Tan.
But it is not just solely for the redemption plan without holding Xtron
to it liability.”
DPP: “With the $10.7m, Xtron would not
have been able to fulfill the rental obligations to the church for the
full advance rental period of six years. Correct?”
Sharon disagreed with explanation.
DPP asked a similar question again
getting Sharon to confirm what she wrote on the spreadsheet Xtron with
$10.7m would only pay for 2.9 years of Expo rental.
Sharon replied: “Your Honour, based on
simple math, yes. Only $10.7m will be left in terms of case in Xtron’s
book. But your Honour, my understanding was Xtron must continue to earn
income in order to fulfill the advance rental agreement.
Judge:
Ms Tan, the question is simple and very straightforward. It is simply
to ask you to confirm what you have said in that email, which is the
cash will only last 2.9 years of Expo rental, and that is $10.7m. So
whether it is simple maths or more complicated maths, I don’t understand
why you can’t just address the question directly.
Sharon apologized and agreed that the $10.7m would only last 2.9 years.
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