The S$46 million lump sum City Harvest Church pumped into audio-visual firm Xtron Productions as “advance rental” in October 2009 was indeed intended for Xtron to secure a property for the church, said former church investment manager Chew Eng Han this morning (Jan 29).
“Never in my mind was advanced rental all about redemption (of the unquoted bonds),” Chew told the Court as he took the stand for the fourth day in the long-running trial.
He added that some of the funds were used to offset the bonds as a “natural consequence...based on accounting logic”.
Chew is among six church leaders accused of misusing S$24 million of church-building funds to buy sham bonds in Xtron and Indonesian firm PT The First National Glassware (Firna). Another S$26.6 million of church funds was allegedly circulated through complex transactions - a process the prosecution refers to as “round-tripping” - to create false appearances that the purported sham bonds had been redeemed.
Chew argued that the primary priority of the advance rent was to equip Xtron with financial capability to negotiate with bankers and vendors, so as to secure a suitable property for the church. Among the sites Chew was looking at include Capitol Theatre and the then-defunct Hollywood Theatre beside Lion City Hotel.
Redemption of bonds was secondary, he said, adding that he “saw no urgency” because “did not think they were sham bonds and thought album sales will eventually come in and the bonds will be redeemed”.
Contending the prosecution’s charge that accounts were falsified, Chew said that at the end of the “round trip”, there was neither gain not loss in CHC’s balance sheet but simply a restructuring of its investment assets.
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