Xtron had 'little say' in Crossover project (ST: 31 March 2015)

DPP says power lay with church leaders, including Kong Hee and his deputy

THE directors of a company that supposedly managed pop singer Ho Yeow Sun did not actually have control nor the power to make decisions about the budget for her US album.

That power lay with the leaders of City Harvest Church (CHC), including senior pastor Kong Hee, who is Ho's husband, and his deputy Tan Ye Peng, alleged Deputy Public Prosecutor Mavis Chionh yesterday as she continued her cross-examination of the deputy senior pastor.

Though Xtron was set up to seem independent, in reality, its directors approved budgets that Kong thought were needed by the so-called Crossover project and had little say of their own.

Tan disagreed, and said Xtron directors such as Mr Wahju Hanafi trusted Kong as a "visionary", and that they deferred to his opinions on budgeting decisions because he had experience dealing with music producers in the United States.

But they did not blindly follow Kong's instructions, Tan insisted.

"Wahju is a businessman. I believe that when he signs any contract, he will apply his mind; he would not have signed any contract blindly or without asking questions," he said.

But DPP Chionh charged that Tan was "desperate to avoid having to concede that Kong Hee was the one controlling and making decisions about the budgeting for Sun Ho's album project".

"... you are trying to maintain the story that the Xtron directors made these decisions independently, and that that, therefore, means the Xtron (bond sharing agreement) was an arm's length commercial transaction," said DPP Chionh as she grilled Tan, 42, during his fifth day on the stand.

He is one of six church leaders charged with misusing $50 million of church funds to boost Ho's music career, and covering up the misuse.

The prosecution believes that five of the accused channelled money from the church's building fund into sham bond investments in Xtron and glass manufacturer Firna.

Four of them, including Tan, then allegedly devised transactions to clear the sham bonds from CHC's accounts to mislead auditors.

Tan has repeatedly told the court that church leaders acted only on the advice of lawyers and auditors in structuring the funding of the Crossover project, a church vehicle to evangelise through Ms Ho's secular music.

Later in the day, DPP Chionh highlighted how Mr Wahju's $1.27 million donation to Xtron - seed money for the Crossover project - had actually come from a refund for a prior donation he had made to CHC's building fund.

When asked, Tan said this was neither told to church members nor the church's auditors.

Two of the accused, Kong and Chew Eng Han, had also withdrawn their funds from the building fund and made donations in a similar fashion.

DPP Chionh alleged that this was arranged so the church's building funds could be channelled to fund Crossover album expenses.

Tan again disagreed, arguing that once the donations had been refunded, they ceased to belong to the church.

But DPP Chionh objected to his reasoning.

She noted that while the "form of the transaction" would look like the individuals withdrawing monies and then voluntarily re-gifting it to Xtron, the substance of the transaction is "a loan of the building fund to the Crossover".

The trial continues in its 109th day today.