The prosecution has been trying to show that Wahju’s personal guarantee (PG) was a sham.
Chew had told investigators from the Commercial Affairs Department that the back-to-back guarantee was merely to satisfy Wahju Hanafi’s request.
Mr Sreenivasan pointed out that the position taken by Wahju Hanafi, who is a prosecution witness, is in direct contradiction to DPP’s position.
The judge commented that the argument should be left for submission.
DPP Ong produced an email to proof that the PG and the back-to-back guarantee in 2010 were not actually drafted by lawyers. The 2 personal guarantees were actually drafted by Serina Wee.
DPP asked: “Before you signed the personal guarantee, didn’t you ask any member of your team whether they had checked with lawyers and auditors about this particular document that you were signing?”
Kong replied: “Not that I could recall, your Honour.”
DPP moved on to question Kong about the Firna bond subscription agreement. He opened another email that was written by Kong.
Kong wrote to Serina and copied to Ye Peng.
Dear Na Wee,Is there an acceptable dateline for Wahju’s banker to sign before we pull the plug and accept that this Wahju route is aborted?
DDP: “Witness, I put it to you that this email, is yet another piece of evidence that the Firna bonds were just a sham and that Wahju was simply a conduit for the Church Building Fund to be used to finance the Crossover Project.”
Kong replied: “Your Honour, I disagree, because if the Firna bonds were just a sham, it certainly was not flagged out to any of us, least of all to me, by the auditors, by the lawyers from Drew & Napier, by the lawyers from Rajah & Tann.”
DDP: “I put it to you that in the same way when it came to filling the hole Wahju and the supposed personal guarantee were just a conduit for funds to be put back that you had taken previously to fund the Crossover Project.”
Kong replied: “Your Honour, I disagree. Wahju’s guarantee was real. We do not deny the fact that it was formalized only at the end of March 2010. And Wahju had made good his word, and the church had not lost money.”
ALRA was formally terminated on 31 March 2010. DPP established that the termination of the ALRA flows from the purchase of Suntec as well as Kong’s concerns over the bloggers. Kong agreed that the debts incurred through the Xtron and Firna bonds with the church had moved on to the ALRA.
So for Kong to pay back the amount used on Crossover expense, he has to first pay back the ALRA so that the money can go back into the Building Fund.
Filling the hole means to pull back all the Crossover expenses and restore the Building Fund to what it ought to have been before it had gone into the Xtron and Firna bonds.
DPP Ong produced an email from Serina to Kar Weng on 14 April 2010.
The table shows a plan to pay off the album expenses
DPP Ong produced some emails and blackberry messages to show that it was Kong and his team planned to plug the hole and not Wahju himself to make good on his personal guarantee.
One of the blackberry messages Kong wrote to Ye Peng, Jacqueline and Kar Weng on 14 April 2010
Dear Ye Peng and Jacqueline,
I am thinking that once the hole is plugged we should get Kar Weng and Wahju to meet up with the following people casually to let them know the investors in the Crossover Project.
XPL Staff
Jimmy
Foong Daw Ching
Unusual
DPP suggested to Kong: “What you intended was to make the sham that Wahju and Kar Weng had been investors all along more convincing by trotting them out to meet all these various people, just as you always say that Wahju really met Justin Herz, therefore everything must be genuine.”
DPP: “I put it to you that you didn’t consult lawyers and auditors for this transaction because you didn’t want to reveal to them that there was a hole at all, just as you wanted to fill the hole before the authorities did anything.”
Kong: “Your Honour, I disagree… because the ARLA was drafted by Rajah & Tann, top lawyers in a top legal firm, who would be aware that if Xtron could not fulfill the obligation, the ARLA would have to be rescinded. At the same time, the auditors were aware that the ARLA would be used to redeem the bonds, so they would know, at least for the auditors, that part of the amounts that went to ARLA would have been used. So if the ARLA is rescinded, they wouldn’t be surprised that there will be a deficit in Xtron, and Xtron would somehow have to make good the deficit.”
<… questions and answers …>
Then DPP showed Kong the transcript of the Special Meeting on 28 March 2010.
In this meeting Kong supposed to address concerns that the members might have about Xtron. But Kong did not tell the executive members (EMs) that the $13m of church money had been spent on the Crossover Project.
Kong said: “Your Honour, I am not trying to hide things from my executive members. We are faced with a barrage of emails, hate mails from the blogs, from social media, but I am very alive to one thing. Whatever I share to my EMs, very quickly enters the public domain.
I wanted to protect the Crossover Project. I want to protect the church from unnecessary issues. Those were the things in my consideration at that point in time. I was not trying to hide things from my executive members whom I believe the majority would support. I just didn’t want unnecessary issues that would distract the church from the mission that God had given to us.”
DPP tendered a new exhibit in court. This email was from Ye Peng to Kong with a file attachment. The funding for Sun’s project was reflected in this email.
Kong said: “Your Honour, to the best of my recollection, the purpose of this writeup was for Ye Peng and I to send to Wahju and Roy to give them the history, like the learned DPP had said of Xtron.”
When asked who was involved in drafting the document. Kong said: “I wouldn’t know who drafted it…. I do not know whether is it Pastor Tan or Serina or Eng Han or a combination. I wouldn’t know.”
DPP read the highlighted portion of the attached document.
“By 2008, the production and marketing costs of Sun’s music albums have reached $18,658,419… but Mr Wahju,, the head of the Hanafi Family, had signed an undertaking to Xtron on 15 August 2007 to personally finance all the expenses and/or losses incurred from Sun’s project.”
DPP questioned: “But this email is dated 24 May 2010, so this would have been after you would have been told in 2010 that Eng Han’s plan was to get a PG signed to justify Wahju paying back the Crossover expenses. And prior to that, you have told us you were relying on the verbal guarantee given in 2002, so surely you would have been surprised to see it indicated here that there was an undertaking signed in 2007. Correct?”
Kong replied: “No, your Honour. At that point in time, I wouldn’t be surprised, because to me when Eng Han suggested about getting a PG signed, perhaps I was too simplistic, but as a pastor in my mind, I thought okay, that was something needed to effect his guarantee. I didn’t realize that at that point in time. So when I read this, I also wouldn’t know was there another document in 2007 that was signed, or the number of documents that were signed, because I was not involved in the terms of the BSA, or the documentation surrounding it.”
<..some questions related to this documentation and lunch break..>
DPP tendered another new exhibit. This is an email from Kong to Ye Peng. At the bottom of the attached document, the author of this document wrote.
How Xtron Plans to Return the Loans
1. Sponsorship from Mr Kong Hee $10,000,000
2. Sales of homes owned by Mr Kong Hee $3,100,000
3. Royalties from sales of Mr Kong Hee’s products $1,750,000.
4. Income from album sales & concert performances $3,920,000
5. Sponsorship from individuals $11,189,239
Total $29,959,239
DPP: “Where was this sponsorship of $10m going to come from?”
Kong: “I was planning to work very hard, your Honour, to double my speaking engagements. Over five years…”
….
DPP: “Well, if you look at how Xtron plans to return the loan, there’s no mention there of Wahju, himself, repaying the loans.”
<… some questions and answers related to this document…>
Kong said: “Your Honour, I am not the author of this document. Perhaps it could be better expressed, because I think the thinking at that point in time would be Wahju and others are also going to help out. But at the end, I know in actuality the last line was paid by Wahju.”
DPP: “Well, you have vetted this document, so are you saying you didn’t realize that was inaccurate?”
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