Edwin Tong, lawyer for Kong Hee, spent most of the morning session on 30 January 2015 cross-examining Chew Eng Han. These were some of the topics raised:-
- Relationship between CHC and Xtron
- Chew’s role in the Crossover Project
- Buyback of CDs
Relationship between CHC and Xtron
Tong asked Chew about an artiste management agreement that Chew had signed on behalf of Xtron with Sun Ho during his time as an Xtron director in 2003/2004.
Tong: …when you signed the artiste management agreement, you are ensuring, number one, that Xtron’s interests are protected and advanced by reason of that agreement; and, number two, that it also fulfills and is consistent with CHC’s interests. Right?
Chew: Your Honour, when I signed on behalf of Xtron, honestly, in my mind, the number one primary importance is the interests of CHC and how do I reconcile that with my position as a director. As a director of Xtron, I owe a fiduciary duty towards the company not to put the company into losses, reckless losses, as well as not to do anything that’s illegal. And I see that as totally consistent with my primary duty towards CHC, that if Xtron doesn’t lose money that’s good, then CHC won’t lose money, because the money comes from CHC. If Xtron doesn’t do anything illegal, that’s good for CHC.
But primary in my mind, really, is CHC and not Xtron, because, like I said yesterday, Xtron in essence was a trust with an invisible trust instrument and, in fact, there’s already evidence in court that Kong Hee was invisible in the board meetings of Xtron and Suraj was a ghost director. That’s the invisible trust instrument I’m talking about.
Chew’s role in the Crossover Project
Tong: Even before the structuring of the bonds in 2007, would it be fair to say that, in your capacity as a director — first as a director of Xtron and then, second, as a contributor or a donor to the Crossover, you had certain roles in relation to the raising of funds for the Crossover Project, right?
Chew: If you are referring to my own sponsorship of Xtron, yes.
Tong: First in your capacity as a director of Xtron, having signed Sun Ho as an artiste and, therefore, needing to ensure that there were funds for her to be promoted and albums made; that’s one aspect. Another aspect, of course, is, as you say, as a direct donor yourself. Do you agree?
Chew: I agree with the second aspect, but, for the first aspect, the fact that I signed the artiste agreement between Sun Ho and Xtron didn’t mean that I then had a duty or the role to go and look for funds for her, because the fact is that after that, in 2003, when Xtron was set up, it was really Serina Wee and Tan Ye Peng and Kong Hee that were speaking to individuals to put in monies.
Chew also told the court that while he was involved in advance rental proposals and a property project in 2006, he was not involved in other areas such as the retainer and extra income that Xtron would earn from CHC.
Buyback of CDs
Tong presented a 15-page document in court, of which 7 are Chinese music charts that Sun Ho’s albums/singles were number one.
Sun*day album
Tong: I understood your evidence to be that the buyback of albums contributed to the success of the album, and, therefore, the success of the album is not real. Did I paraphrase you correctly?
Chew: My evidence, your Honour, was that, when I look at the sales, and the sales are very high, and yet there are losses, then I infer that the reason why there are losses and the expenses are much higher than the sales is the possibility that — because the expenses included a lot of buybacks.
Tong: So you are inferring but you don’t know for sure and you are not asserting it, are you?
Chew: I can’t assert because I don’t have all the evidence, your Honour. I’m just making a logical conclusion.
Tong: I’d like you to look at the bundle I have handed up, page 1. I’m not sure if you are familiar with the Recording Industry Association Chart, also known as the RIAS Chart.
Chew: I have heard of it.
Tong: You will see that “Sun*day” is listed as number 1 on these charts. These charts are not influenced by any buybacks whatsoever. Do you agree, or do you know?
Chew: I’m not sure whether it goes by sales.
Tong: In fact, you see that, at number 6, it is Jacky Cheung. Surely he is not involved in a scheme, or, in your words, a scam to buy back CDs so as to promote his album sales, right?
[Mrs Light's comment: At this point, a loud laughter was heard from the prosecution.]
Chew: I don’t understand the logic, your Honour. Could you explain?
Tong: These charts would be a fair and accurate reflection of the popularity of the albums released around that time?
Chew: I need to know, your Honour, how these charts rank the singers, whether it’s by album sales.
Tong: If it is by album sales, even if is it by album sales, the date of these charts, if you look slightly above in the grey shaded area, 30 November 2002 to 6 December 2002, right for the week of that period. This would be about one year before E-116, where the buybacks were even contemplated. So there’s no correlation between what you see at the RIAS charts here and E-116, correct?
Chew: Yes, because E-116 relates to a future time, yes.
Lonely Travel album
Tong: I know this document is in Chinese, but I’m told that this is the Taiwanese album charts, and, at number 1, you see Sun Ho’s “Lonely Travel” album. Correct?
Chew: I’m not good at Chinese. Is that “Lonely Travel”?
Judge: Mr Tong, I was about to comment as well: if you are not providing a translation of what these charts mean, then if your only purpose is to show that the albums went to number 1 on certain charts, that’s fine. I think you could arguably still put these in, but I don’t know what else these will stand for.
Tong: All right. I will at least use that for that purpose. The dates here would be October 2003, and, to make the same point as before, the email that you had referred to, to make the point about the buybacks of the “Lonely Travel” album, is dated August 2004.
Chew: Yes, your Honour.
Tong: Again, at least on the face of these charts, there’s no correlation between the contents of E-128 and chart success. Right?
Chew: Yes, your Honour.
Tong: In relation to this buyback, I think you mentioned that at the time you were on the board and the board had considered this buyback, right?
Chew: Yes, your Honour.
Tong: And approved it?
Chew: Yes.
Tong: In fact, it was also something that was discussed and cleared with the auditors. Were you aware?
Chew: Yes, your Honour.
Tong then presented an email exchange between Tan Ye Peng, and Foong Daw Ching and Joseph Toh of Baker Tilly in September 2004. Tan is consulting the auditors on the purchase of the Lonely Travel CDs and Toh informs:
Gain album
Tong: Cast your eye over E-537, which is dated 9 May 2007. I’m going to make the same point as you, that E-537, which is about a year after the release, has no correlation with the fact that “Gain” made it to number 1 on the Taiwanese album charts, which is something that you can find at page 13 of the bundle. Can you quickly look at it and confirm for me?
Chew: You are asking me to confirm that Ho Yeow Sun is at number 1, right?
Tong: That the date of these charts would be June 2006. The date of E-537, which you relied on, is May 2007 and by June 2006, 16 to 22 June, that chart, “Gain”, is at number 1 on these charts. That’s all I need.
Chew: Yes.
Tong: So would you accept that E-537 has nothing to do with the chart success, at least based on what you see at page 13 of this bundle?
Chew: In other words, you are saying that she already hit number 1 before the exercise was done to buy the CDs?
Tong: Yes, that’s correct.
Chew: Yes, your Honour.
Tong: In fact, that’s the case for all three albums, right?
Chew: All three albums.
Tong: Yes, thank you. You can put that away — actually, I’d like you to look at one more page, page 14 of the same bundle. This is the MediaCorp Radio charts, and this is based on airplay, I’m told. The chart is dated 2 July 2006, and this, again, is about ten months prior to E-537. It is also number 1 on these charts, correct?
Chew: Yes, your Honour.
Judge: Is this an album or a song?
Tong: Yes, your Honour, I’m checking. Your Honour, this is a single from the album; it’s a song. It’s based on airplay.
[Mrs Light’s comments: Are the charts wholly indicative of the albums’ success? And how about the other emails brought up by Chew?]
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