When the accused were told that Xtron Productions would not be able to pay up when the bonds that it issued City Harvest matured in August 2008, the five extended the bond term from two to 10 years. They also tried to “manipulate the earnings of Xtron Productions from the church” to ensure that the interest liability could be met, Deputy Public Prosecutor Christopher Ong argued yesterday.
Prosecutors yesterday charged that Chew and his alleged co-conspirators hid their scheme of using church funds to invest in sham bonds, including a S$13 million bond issued by Xtron Productions, to boost the music career of Ms Ho Yeow Sun, the wife of founding pastor Kong Hee.
Chew and Kong are among six church leaders being prosecuted for misusing more than S$50 million in church buildings funds to finance Ms Ho’s foray into the United States. The church had sought to use Ms Ho’s pop music to evangelise through what it called the Crossover Project.
The prosecution believes S$24 million in church building funds were used to buy sham bonds in two companies, including Xtron Productions.
Another S$26.6 million was then allegedly circulated through complex transactions to cover up the first sum.
To prove his point that five of the accused, and not Xtron Productions’ directors, called the shots in the firm, DPP Ong presented pre-signed bond certificates with neither the values nor dates filled in.
The firm’s former director Wahju Hanafi had previously testified that those were “blank cheques” that allowed for drawdowns without any permission needed from the directors.
Chew’s defence was that the measures were simply part of what he called a “contingency” plan.
DPP Ong further contended that Chew, 54, tried to cover this up when presenting investment updates to the church’s board members, despite knowing full well that the bond would not be repaid in time.
Pointing to a series of minutes taken at meetings, DPP Ong told the court that Chew, in his attempt to keep the sham under wraps, instead attempted to reinforce the belief that the corporate bonds were good investments at the time.
Rejecting the proposition, Chew said he did not tell the board because “it didn’t strike me as something very important or that is going to shock them … There was trust in Kong Hee and the Crossover team”.
There was also no definite plan as to when proceeds would come in, he added.
Dismissing Chew’s reasons as “absurd and disingenuous”, DPP Ong countered that Chew and his co-accused had intentionally kept the board in the dark so that the sham would not be exposed.
The trial continues on March 16.
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