City Harvest Trial: $600,000 in another investment written off (ST: 30 April 2015)

MORE than $600,000 in investments and loans had to be written off or offset by City Harvest Church (CHC) after an investment it made in a church-linked company turned sour.

CHC's former investment manager Chew Eng Han pointed this out in court yesterday during his cross-examination of co-accused Serina Wee during the long-running City Harvest trial.

The duo and four others, including founding pastor Kong Hee, are accused of misusing church money to bankroll the career of Kong's wife Ho Yeow Sun.

They are charged with channelling $50 million from the church's building fund into sham bond investments and covering up the misuse.


Chew, 54, compared other investments made in 2005 and 2006 in Research University for Leadership (RUL) - a leadership training company where he was a director - to the purchase of Xtron bonds.

He was trying to prove that like the money pumped into RUL, church investments in Xtron - the company that managed Ms Ho's pop music career - were genuine ones with real contractual obligations. The prosecution says that the church's investments in Xtron bonds were a sham.

"If I remember correctly, none of these (RUL) amounts were repaid to the church. In other words, this investment went bad, right?" Chew asked.

Wee, 38, agreed.

He noted that the money had to be repaid to the church in the form of services rendered by RUL.

"Isn't this the same thing that happened with the Xtron bonds?" he asked, referring to how the bonds had to be offset by an advance rental licensing agreement.

Wee again said yes.

Later, Chew asked Wee about the Crossover, a project by the church to spread the Gospel through Ms Ho's music.

"Does it make any sense to you that we would want to cause loss to the church when there's no personal gain to us?" he asked.

Wee agreed that it did not make sense.

He noted that the only gain they had was the "satisfaction of fulfilling the vision of the church".

The trial continues on Monday.

29 April 2015 – Serina cross-examined by Defence Counsel (MrsLightnFriends: 29 April 2015)

Serina cross-examined by Kong Hee’s Counsel

Kong’s counsel didn’t have questions for Serina Wee.
保持沉默是以守为攻的上策吗?

Serina cross-examined by Sharon’s Counsel

Sharon’s perspective or recollection of events differs from Serina

Controversy 1
This is in relation to the letter from AMAC to Deutsche Bank to effect the drawdown of a $5million tranche of the first Bond Subscription Agreement (BSA).

The drawdown was signed by Aries Zulkarnain [Board member], Derek Dunn [Executive pastor of the church] and Ms Sharon Tan.

Sharon’s recollection is the instruction to sign the document was from Serina. But Serina says she don’t have this recollection.

Sharon’s EIC: Your Honour, during that time Serina Wee was still personally handling this investment so I recall that she came to me to tell me that this had been approved by the board and as well as during the July 2007 EGM. So I would need to sign this drawdown by Xtron.   I would sign based on what she had told me.

Sharon also recalled that Aries and Derek signed the drawndown before her.

The recollection from Serina (Sharon Tan cross-examined by SC Maniam)
SC Maniam: I know you have said you think Serina was the one who obtained the signatories, including yours, is it possible that Mr Chew Eng Han was the one who got your signature instead?

Sharon: Your Honour, as far as I can recall, it was Serina that I got the instruction from unless there are any documents that can jog my memory.

SC Maniam: Ms Tan I’m suggesting that to you simply because Serina’s recollection is that it may have been Eng Han instead.

Counsel Paul: Ms Tan clearly recalls that you passed a document to her and that the two other gentlemen’s signatures [Aries and Derek] were already there when you did. Could that have been possible?

Serina: Your Honour, I don’t have a recollection as per what Sharon remembers, because, based on my emails, I forwarded the draft of the letter to Deutsche Bank. I forwarded that draft to Eng Han to prepare, and what happened after that I do not remember. But I think it might be possible that I might have been the one to let Sharon sign the document as well.

Controversy 2
Sharon recalled it was Serina who told her that the board had approved the first BSA. But Serina says she don’t have this recollection.

Counsel Paul: On a slightly different angle, do you recall ever telling Sharon that the first BSA had been approved by the board?

Serina: Your Honour, I also don’t have that specific recollection but it might have been possible. And if I had told her that the board had approved it. I wouldn’t have meant it in the sense of that specific approval was given, because that wasn’t my understanding that it was required, but I might have meant it that the board was aware of the BSA.

Controversy 3
This is in relation to the minutes of the investment committed meeting dated 29 July 08 [A-113] and the email exchanges between Serina, Eng Han and Sharon Tan.[E-253]

Sharon’s position is she had called Serina and with the answer from Serina, she inferred that she had to change the minutes date. But Serina cannot remember having this conversation with Sharon.

E-253
In this email Sharon wrote to Serina and Eng Han, and Serina replied to Sharon in blue. See my previous blog on Sharon’s evidence.

The recollection from Serina  (Sharon Tan cross-examined by SC Maniam)
SC Maniam: Ms Tan your evidence is that you spoke to Serina after seeing her reply and you asked her if Siow Ngea could be appointed later. Do you recall that?

Sharon: Yes, your Honour.

SC Maniam: My instructions from Serina are that she does not recall having such a conversation with you. She doesn’t think it took place, because she already told you Siow Ngea had been appointed officially on 29 July 2008.

Counsel Paul: Can I assume this is still your position that you cannot remember having this conversation with Sharon?

Serina: Yes, your Honour, that’s still my position.

Counsel Paul: Ms Wee, after seven year, memories fade, people recall different things; my client's recollection is that she called you and she spoke with you on this, and she says her memory is quite clear. One more time: your position is still that you cannot recall this conversation?

Serina: Yes, your Honour, I cannot recall this conversation.

Controversy 4
This is in relation to E-69 and Serina’s EIC on April 27. Sharon’s position is different from Serina’s evidence.

E-69 dated 25 September 2009
The subject is “Net Present Value”. This is an email from Sharon to Serina and Eng Han.

Sharon wrote:

Dear Eng Han and Serina,

Pastor Tan wants us to settle this within the next 1 week.   That means the following must be done:
1. Net Present Value
2. Contract
3. Whole XPL, Firna and CHC transaction.

Serina explained that point 3 is the plan for the redemption of the bonds. The plan involves the use of advance rental to redeem both the Xtron and Firna bonds. She had gotten the understanding from the conversation she had with Sharon at the period between 22 to 23 September 09.

Serina’s EIC on 27 April 2015
Serina: Your Honour, Sharon explained about Pac Rad, Pacific Radiance, will give the funds to Firna to enable them to redeem the bonds and also that the church will be giving advance rentals to Xtron. Xtron will offset the S21.5million ABSA with the advance rentals, and then after that, Xtron would purchase bonds in Firna.
 
SC Maniam: Did Sharon say anything about what Firna would use the bond proceeds for after Xtron purchased bonds in Firna?
 
Serina: Your Honour, I can’t remember if she said specifically, but my understanding, based on the initial plans in E-502, was that Firna will continue to support the Crossover.

Counsel Paul: My client’s position [refers to Sharon], Ms Wee is that she would not be in a position to say anything about the funding or support of the Crossover Project because she was not part of the Crossover team, and she did not know the details of how the Crossover Project was funded through Firna. Is that something you can agree with?

Serina: Your Honour, I think Sharon would be familiar that Firna is involved in the crossover and Wahju is involved in funding of the Crossover, but I can agree that she may not be familiar in the sense of telling me this portion, because I also stated that I cannot remember specifically if she told this to me.

Serina’s EIC inconsistent with Sharon’s evidence

City Harvest Church’s style of recording minutes
The prosecution’s case is that the official board minutes of meetings reflect a false version of what happened at board meeting.

Sharon’s EIC said that it was Serina’s practice when she first started attending the meetings. Sharon says, “… the finalized minutes did not reflect everything that was discussed, but only key points.” and Serina agreed with her.

Counsel Paul: Would this be an accurate way of describing how CHC’s minutes were generally done up during your time?

Serina: Yes, your Honour. This is based on what I learned from Foong Ming, who prepared minutes before me.

Counsel Paul: You just told us this is a practice you inherited from Ms Wong Foong Ming?

Serina: Yes. [The evidence adduced by counsel in court on 16 April 2015]

Serina said this practice of only minuting key points was not something she or Sharon came up with.

Counsel Paul: In fact, it would be fair to say that this had been the practice of how CHC minutes were taken for many years before Ms Sharon Tan took over the minute taking?

Serina: Yes

Counsel Paul Seah read Pastor Tan’s evidence of 30 Mar 2015.

DPP: Can you clarify something you said just now? You told us that what is told to the board might not always appear in the board minutes of meeting. If we understand you correctly, you are saying that we cannot trust the board minutes of meeting because they don’t tell us the whole truth about what happens at board meetings. Is that your position?

TYP: Your Honour, my explanation is that the board minutes does not record everything that is discussed. it’s not that the board was not told the truth in board meetings.

DPP: What you are saying is that the board minutes don’t necessarily reflect the accurate and full picture of what happens at board meetings?

TYP: Your Honour, the board minutes may not reflect everything that is discussed.

DPP: So some things might be left out of the board minutes of meeting?

TYP: Your Honour, the board minutes were recorded in a way that reflects what was eventually happened. And, your Honour with the benefit of hindsight, that maybe we should have typed the board minutes verbatim, and a lot of this procedures and processes are already done in the church today. But at the point in time when we were board members, we didn’t type it down verbatim, the discussions that were going on, and eventually, what was captured in the board minutes was eventually what happened.

DPP: What does that mean, “the board minutes were recorded in a way that reflects what eventually happened”?

TYP: Your Honour, what I meant I shouldn’t use the word ‘decided’, but may be discussed in the board meeting about doing A and then eventually we end up doing B, so what was minuted would be B instead of the discussion that we had earlier on, which was A.

DPP: So if the board discussed A at the meeting but eventually B was what happened, the board meetings would not reflect A and would only reflect B?

TYP: Your Honour, then A is usually reflected in the handwritten notes, was what was discussed, but B eventually ended up in the typed-out notes of the meeting.

Counsel Paul: Do you agree with that?

Serina: Your Honour, I do agree that sometimes there were this kind of situation where there was a further discussion, and then the minutes were updated, but when the board members resigned the minutes again, they were giving their approval. It’s a form of ratification to the minutes being taken that way.

Court evidence CH-3 and 9 April meeting with Mr. Sim
This is in relation to the meeting with Mr Sim Guan Seng [Prosecution’s witness] on 9 April meeting. Serina and Eng Han were not at the meeting.  John Lam, Pastor Tan and Sharon and Ms Lai Baoting [Prosecution’s witness] were at the meeting with Mr Sim. In the course of these proceeding, Mr Sim’s evidence has become a matter of some controversy, particularly whether he had given the church the impression that he wanted the bonds off the church’s books.

Sharon’s position is that, at that meeting with Mr Sim he wanted the xtron bonds off the books.

In Serina’s EIC, she said that Sharon updated her about the meeting and told her that Mr Sim did not like the bonds because he found the bonds and the valuation process complicates the audit. Serina also said that Sharon told her that Mr Sim hopes to not see the bonds on the church’s books by the next financial year.

Counsel Paul: If I recall correctly, what you told the court in your evidence was that later on you thought the church also wanted to clear the Firna bonds because they would attract the valuation issues that disturbed Mr Sim?

Serina: That’s correct.

Counsel Paul: As far as you can remember, when did Sharon update you on what Mr Sim said during this meeting?

Serina: Your Honour, my impression is that it’s quite close to the meeting itself.

Counsel Paul: Thank you. Did anyone else you spoke to reinforce what Sharon said?

Serina: Your Honour, I can’t recall speaking to anyone else about this.

Counsel Paul: Do you think that Sharon relating what has happened in this meeting would have any reason to lie to you about this, that the impression she got was that Mr Sim wanted the Xtron bonds off the books?

Serina: Your Honour, Sharon has no reason to lie about this.

Counsel Paul: As far as you know, is this something that your co-accused Pastor Tan, Mr Chew Eng Han and Ms Tan really believed, that Mr Sim preferred the bonds off the books?

Serina: Yes, your Honour, this would be something they really believed.

Counsel Paul: Let me come right out and ask you this question: was there a conspiracy between the four of you, Mr Chew, Pastor Tan, Sharon and yourself, to clear the bonds and falsify the church accounts because you were afraid that the auditors would find out that these bonds were sham bonds?

Serina: Your Honour, there is no conspiracy. The auditors already know what the bonds are used for. They know about the bonds since the first BSA. So there’s no conspiracy to prevent them from finding out anything.

Court evidence CH-50b [Sharon’s handwritten notes for a board meeting of CHC on 12 September 2009 and E-683
There is a controversy over Sharon’s handwritten notes, whether or not her notes accurately reflects what was told to the board and the bond redemption plan.

Sharon’s position is her notes accurately set out what was told to the board.

Serina was not at this board meeting but she had a meeting with Sharon on 29 September 09.

Let’s see the evidence adduced by the counsel.

The board meeting is on 12 September 2009.

Counsel directed Serina to open another evidence E-683. The bottom on the email is from Sharon to Pastor Tan and copied to Derek Dunn.

Sharon reported what happened in the audit committee meeting that the church had with Mr Sim and his staff on 22 September 09. This email is on 23 September 09 and audit committee meeting was the day before, on 22 September 09.

E-683 dated 23 September 2009
At the point 2 of this email Sharon was telling Pastor Tan and Pastor Derek Dunn that
2) Redemption of bonds
John mentioned about XPL’s intention of redeeming the bonds and our arrangement of giving advance rental. He gave a comment that he would not interfere with how our church works and will just ensure that the accounting entries are done properly! Wow… I was quite shocked by his response! [There is a smiley face]

Please keep board meeting date 12 September 2009 and the audit committee meeting with Mr Sim date on 22 September 2009 in mind.

Counsel Paul went on to read Serina’s EIC of 28 April 2015.

SC Maniam: 2 October 2009 would correspond with the first payment into the SOF in connection with the redemption plan. If you can keep that date in mind, 2 October 2009 what did you think the church board knew about the redemption plan before it was implemented?

Serina: Your Honour, on the 29 September 2009 meeting, when Eng Han drew the whole diagram of the redemption plan, I remember that I asked Sharon if the board knows about it and Sharon said the board is aware. And I also asked her, “Are the auditors okay with this ARLA offsetting the bonds, because it’s a direct account entry?” And she said that the auditors are aware.

SC Maniam: Look at the chart 3D-5, which we have been looking at for reference. Can you tell me, for the Xtron audit of FY2008, what does the chart show as the start date for the aduit?
 

Serina: 7 September 2009 and the audit partner for the audit is Mr Sim.

Counsel Paul: If I understand your evidence correctly, you are saying that Ms Tan had told you on 29 September 2009, one, the church board was aware of the redemption plan, and, two, the auditors were aware that ARLA would be used to offset the Xtron bonds.

Serina: Yes, that’s correct.

Counsel Paul: This would be consistent with what we have seen in CH-50b and E-683?

Serina: Yes, it would be consistent.

Counsel Paul: Thank you. Did you think that Sharon was lying to you about the board being aware and the auditors being aware of the set-off?

Serina: No, your Honour, she has no reason to lie to me.

Is there a criminal conspiracy between Serina and the co-accused?
In Serina’s EIC of 28 April 2015, she referred to an email that she sent to Sharon and Eng Han. In that email, she said that she would be away for holiday and Angie Koh [prosecution’s witness] would help her to liaise with Wahju side.
 

Counsel Paul: It seems to me, at least from the email, that you had no issue with involving Angie Koh in the redemption exercise while you were away?

Serina: Yes, your Honour, I had no issues with that.

Counsel Paul: To do this, to get her involved, you would, of course, have to share correct me if I am wrong the details and the process of redemption plan and the timelines with her?

Serina: Correct. I did share with Angie.

Counsel Paul: In fact, we have seen it in a few documents. I don’t need to bring you there. But you had no issue with her knowing the details and the process?

Serina: Yes, there’s no issue Angie knowing.

Counsel Paul: You had no fear of her raising alarm bells because what you were doing was wrong?

Serina: No, your Honour. I did not think that anything was wrong.

Counsel Paul: So you were actually quite happy to go off on a holiday and leave the administration of the redemption of the bonds to Angie Koh?

Serina: Yes

Counsel Paul: From what my client tells me that you are a careful and conscientious person and if this was a criminal conspiracy you would not want to go away but take care of every detail. Is that a correct characterization of your personality?

Serina: Your Honour, firstly, I won’t be involved in a criminal conspiracy, but I am a very careful person.

Counsel Paul: When you said that Angie was going to liaise with Wahju while you were away, did either Sharon or Eng Han voice any issues?

Serina: No, your Honour. They did not say that there were any issues.

Counsel Paul: Did either of them say, “We’d better keep this process a secret between ourselves and not involve an outsider”?

Serina: No

Counsel Paul: Last questions, as far as you know, from your interactions with Sharon and Eng Han, did either of them show any signs that they thought that this whole process, the details of the redemption, was wrong or illegal?

Serina: No, your Honour. They did not show any signs that they thought anything was wrong. It’s just a normal transaction.

Counsel Paul: Thank you very much. Ms Wee, that’s all the questions I have for you.

28 April 2015 – Serina’s EIC (MrsLightnFriends: 28 April 2015)

Serina Wee has completed her Examination-In-Chief (EIC) today. She is one of the three accused faces with ten charges.

The first six charges are conspiracy to commit Criminal Breach of Trust (CBT). Part of the prosecution’s case is that the 6 accused were dishonest and, in that context, prosecution says that they knew that what they were doing was illegal.

The 1^st 2 charges relate to the first $13 million in Xtron bonds. [All the 6 accused]

The 3^rd charge concerns the $11 million in Firna bonds, which was purchased by the church. [All the 6 accused]

The 4^th and 5^th charges relate to the Special Opportunities Fund (SOF) tranches 10 and 11. [Sharon Tan, Chew Eng Han, Tan Ye Peng and Serina Wee]

The 6^th charge concerns some $14 million paid as advance rental by the church to Xtron. [Sharon Tan, Chew Eng Han, Tan Ye Peng and Serina Wee]

The 7^th and 8^th charges relate to the SOF payments. The prosecution says that the accused instructed Lai Baoting to make an entry describing a payment of $5.8 million and $5.6 million, as SOF was not an investment. [Sharon Tan, Chew Eng Han, Tan Ye Peng and Serina Wee]

The 9^th charge relates to false entry in CHC’s account. The prosecution says that the accused instructed Lai Baoting to make an entry describing a set-off amounting to $21.5 million in favour of Xtron Productions Pte Ltd as ‘Redemption of Xtron Bonds’ in CHC’s accounts, when the said set-off of $21.5 million was not a redemption of bonds. [Sharon Tan, Chew Eng Han, Tan Ye Peng and Serina Wee]

The 10^th charge relates to false entry in CHC’s account. The prosecution says that the accused instructed Lai Baoting to make an entry describing a payment of $15,238,936.61 made to Xtron Productions Pte Ltd as ‘Advance Rental with Xtron’ under the accounts name ‘Prepayments’ in CHC’s accounts, when the said payment of $15,238,936.61 was not advance rental. [Sharon Tan, Chew Eng Han, Tan Ye Peng and Serina Wee]

Administrative Matters
 

The defence counsel and Mr Chew will start to cross-examine Serina Wee tomorrow. The prosecutor will start his cross-examination on May 4.

For the defence witness, none of them are calling any witness, except Mr Chew. I estimate Sun Ho, 1^st day on the witness stand would be on May 18-19. The other two witnesses would be after her.

Recount of Serina’s oral evidence

1^st 2 Charges
Serina: Your Honour, in relation to the first $13m bonds, I did not think that I was doing anything illegal, because prior to the bonds, I know that Eng Han and Pastor Tan had checked with Mr Foong and he had said that it’s okay for the church to buy bonds in Xtron. And even for Xtron to support the Crossover, he was aware of that. And, your Honour, this $13m bonds, it is also done by the lawyers, by Drew & Napier. I did not think that there was any possibility this thing could be illegal.

3^rd Charge
Serina: Your Honour, for the Firna bonds, I also did not think that I was doing anything illegal. Likewise, the lawyers, Rajah & Tann this time, they were involved, and from the big resolution [refers to E-633 and E-634 which the lawyers drafted but was eventually not passed], I saw that Christina was aware the funds were used to support the Crossover. The Firna bonds had genuine obligation, genuine returns. I did not think there was anything illegal about this, and we had also went to talk to Mr Foong about this prior to the bonds.

4^th and 5^th Charges
Serina: Your Honour, my only involvement was in stating those transactions inside the Excel schedule that I prepared together with Sharon. [Serina was overseas from 4-12 October 09]

6^th Charge
Serina: I did not think that I was doing anything illegal in relation to the ARLA. It was a genuine advance rental. There are obligations by Xtron to fulfill under the ALRA, and the ARLA was done by Rajah & Tann. I thought that the whole board was aware of it.

For 4^th, 5^th and 6^th charges the prosecution says that monies were misappropriated for the purpose of generating the false appearance that certain purported investments in PT The First National Glassware bonds had been redeemed, which was not an authorized purpose of the said funds.

SC: Did you think the Firna bonds had been redeemed or not?

Serina: Your Honour, the Firna bonds had been redeemed.

SC: Did you think a false appearance had been created that the Firna bonds had been redeemed when, in fact, they had not?

7^th and 8^th charges
Serina: Your Honour, I believe how CHC recorded the entry is in accordance to the nature of the entry. It is an investment. It is genuine, with genuine returns, and it was recorded accordingly.

9^th charge
SC: From your perspective, Serina, were the Xtron bonds redeemed or not redeemed by way of the set-off?

Serina: Your Honour, the Xtron bonds were already redeemed by this set-off.

SC: But did you think it was false accounting to describe the set-off as a redemption of Xtron bonds?

Serina: No, your Honour, it is recorded according to what the transaction actually is, a redemption.

10^th charge
SC: Did you think that payment was or was not advance rental?

Serina: Your Honour, I thought that was advance retnal.

SC: Was there anything false in describing it as prepayment?

Serina: Your Honour, it is not false. It’s recorded according to what it is, and advance rental, which is a prepayment.

Serina’s EIC closing speech
Your Honour, I just want to say that I’ve been in City Harvest 20 years and when I first came to the church, God was very real to me and I made a decision to give my life to Jesus. And as a young Christian, I desired in my heart that one day I can become a church staff and serve God full-time after I graduated, and when I had the change to do so, it was like a dream come true to me. And all those years when I was a church staff, and even after I started Advante, my company, all I wanted to do was to serve God. And I’m not a pastor, I’m not a preacher, but there’s one thing that I really enjoy doing and I thought that I could do reasonably well, is to do accounts. And I took my work seriously. Whatever I did, I did to the best of my abilities. And I just wanted to play a part, to help my church fulfill the call of God that he has given to the church. Your Honour, I love my church a lot and I would not do anything illegal to put my leaders, my church family and myself at risk. I felt assured that whatever that was done was above board and I trusted in Eng Han’s financial expertise. Advice was sought from the lawyers, from the auditors at various points. It never crossed my mind that whatever that we were doing could possibly be violating the law.

Your Honour, I saw how my pastors, they love God and how they are always constantly thinking about the church. Your Honour, I can never imagine that they would do anything illegal to put this church that they love so much and they have built all these years and do any harm to it.

Your Honour, I just want to say, lastly, that I will not be in this predicament today if not for the vision of City Harvest Church, but when I think about the many lives that were touched because of City Harvest, because of the Crossover, I’m just thankful that I had a part to play in it.

That’s all, your Honour. Thank you very much.

Ex-finance manager stresses Xtron was independent of church (ST: 28 April 2015)

SERINA Wee, former finance manager of City Harvest Church (CHC), maintained yesterday that the church did not control Xtron, the company that managed singer Sun Ho, wife of church founder Kong Hee.

She told the court she was only CHC's accountant and felt that there should be a representative of Xtron at a meeting with the church's auditors.

Wee, who was dressed in a black dress and green cardigan in court yesterday, said this was because she did not want it to seem like the church had control over Xtron.

It was Wee's third day on the stand in the long-running City Harvest trial.

Wee, 38, is one of six people accused of misusing church monies to bankroll Ms Ho's music career, and the last to take the stand. The six are charged with misusing $50 million of church funds to boost Ms Ho's music career, and then 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 Wee, then allegedly devised transactions to clear the sham bonds from the church's accounts, to mislead auditors.

Wee's lawyer, Senior Counsel Andre Maniam, had referred the court to an e-mail exchange between his client and co-accused Tan Ye Peng, in which Tan had suggested the meeting.

In the June 2009 e-mail, Tan, the church's deputy senior pastor, told Wee that he wanted concerns about a Xtron audit report highlighted to church auditor Foong Daw Ching.

"I think we should really meet Brother Foong to make our request known to him for all the points we are not comfortable about," wrote Tan. Wee had earlier sent Tan and fellow accused John Lam a draft for Xtron's 2007 audit report.

Lam raised concerns about it - including references to the church that showed "so explicitly the relationship with CHC".

The defence has repeatedly maintained that Xtron had operated independently of the church and, yesterday, Wee again stressed this.

Earlier in the day, Mr Maniam, in his examination of his client, had referred to several e-mail exchanges where church leaders asked how much money was owed to them by Indonesian tycoon and church member Wahju Hanafi.

The sum amounted to about $4 million, which Mr Hanafi had "loaned" to Ultimate Assets, a company he owned, which took over from Xtron the management of Ms Ho's music career.

Several times, Mr Maniam asked Wee who exactly was being "owed" the money.

Each time, Wee replied that this was the Crossover Project - the church vehicle which aimed to spread the Gospel through Ms Ho's music.

Wee said that as Mr Hanafi had already pledged this money to the Crossover, church leaders were merely taking "ownership" of it as part of this vehicle.

The trial continues today.

CHC Trial – Serina’s husband Kenny Low (16 April 2015) (20 April 2015: MrsLightnFriends)

Serina is the last defendant on the stand to provide more dots for us to form the picture.  Do you selective choose to join the dots?

As of 17 April 2015, there are more than 1000 dots for us to join. I believe there are two groups of people looking at the case. Be it insider [City Harvester or X-City Harvester] or outsider, all may or may not have the same brush stroke. I suggest to you, whatever picture you draw, please keep your tongue from evil.

Let’s see this dot – Serina’s husband, Kenny Low, was Sun’s first dance instructor and he travelled with her in all the gospel outreach concerts as a dancer. (Serina’s EIC of 16 April 2015)

If you can recall in one of Pastor Tan Ye Peng’s cross-examination. Kenny Low was mentioned in the court. This is in relation to the official minutes of the EOGM in August 2010.

In this EOGM, Kenny proposed that it would be good for CHC to be able to put the church resources, to fully support the Crossover Project.

I notice something interesting. The DPP put it to Pastor Tan that Kenny [Serina’s husband] was under the impression that Xtron had had to look for its own financing for the Crossover. Pastor Tan deliberately did not disclose that Xtron and Firna bonds, the Crossover had already been supported by the church’s Building Fund to Kenny.

A brief recap of Pastor Tan’s cross-examination on 14 April 2015
 

DPP: In your answer to Mr Chew’s cross-examination, you [Pastor Tan] said that Kenny is trying to say for the church to fund the Crossover since it’s a mission objective of the church, instead of having Xtron to have to deliver the results and still find financing. So it’s clear that you understood Mr Kenny Low to be under the impression that Xtron was having to find its own financing for the Crossover all this while. Right?

TYP: …. The impression I get was that he was talking about Xtron bearing the risk, because he was not just talking about Xtron; he was also talking about his own experience, he’s managing the City College and he’s also talking about his own difficulty in raising funds to achieve the church’s objective. That means, in other words, shouldering the burden of this project, which is actually a mission project of the church.

DPP read Kenny’s comment “… isn’t that very challenging and a little bit unacceptable? is there a way for us to put our resources, where our money is, where our heart is to look into how we can really support the Crossover…”

DPP: Isn’t it clear from what Kenny says to you at this EOGM that he was under the impression that, all this while, Xtron had to find its own financing for the Crossover?

TYP: Your Honour, … there is a part where he says, “Of course, to a certain extent, we don’t want to subject building funds to risk and all that”.. In other words, the context is that he already know that the church has invested the Building Fund into Xtron for the Crossover. He is more saying that this is the interesting position where if we don’t help Xtron, they have to shoulder the burden for the project, which is a church project, and they still have to go and find funds for themselves…. isn’t this very challenging and a little bit unacceptable for Xtron?”

DPP: Where has he said anything that amounts to saying that he understands that the church, in the past, has already invested the Building Fund into Xtron for the Crossover?

……

TYP: No, your Honour, it is not said anywhere that Kenny knows, but this is a reflection of the EM’s heart, that now that they know that the church has invested in Xtron, they are very supportive. In fact, they feel that it is not right if the church is actually not funding the Crossover Project, when this is a mission project of the church.

DPP: I’m putting it to you, Mr Tan, that it’s clear from what Kenny says that you would have understood and realized that prior to Mr Kong telling him for the first time at this EOGM, Kenny was under the impression that Xtron had been having to look for its own financing for the Crossover all this while.

TYP: No, your Honour, that is not what Kenny is saying.

DPP: …. When you made that response to Kenny, I’m putting it to you that you made it with the awareness that he thought Xtron had been finding its own finances for the Crossover all this while and you deliberately did not disclose that, in fact, with the Xtron and Firna bonds, the Crossover had already been supported by the church’s Building Fund for some time.

CHC Trial – No Problem or Big Problem? (Serina’s EIC) (MrsLightnFriends: 19 April 2015)

Serina’s examination-in-chief(EIC) of 16 April 2015
This post follows on the previous post CHC Trail – No Problem or Big Problem?
Serina said the cashflow problem in May or July 2006, had been resolved.

In relation to email E-855 dated 2 May 2006
This is an email from Pastor Kong dated 2 May 2006 to Justin Herz, copied to Serina and Pastor Tan. The subject is “budget”.

Dear Justin
No problem, I will wire another US$250,000 to you by tomorrow.
Would that be enough?
Regards
Kong

After the “Regards Kong” there is another sentence Kong wrote.

Peng, as Serina Wee is on maternity, can you please get Sharon to wire the money over this afternoon, if possible.

SC: Were you involved in the making of the payment that is under discussion in these emails, US$250,000 to Justin Herz on or around 2 May 2006?

Serina: I wasn’t involved in the making of the payment.

In relation to email E-444 (which follows the earlier sequence from E-855)
Serina forwarded the email to Pastor Tan on 10 May 2006. She forward Pastor Tan an attachment, “Xtron cashflow-latest”.

She wrote:
I need to know the latest schedule of payment to Justin cos as you see the attached Xtron, we’re in big trouble in July….

SC: Can you explain why you were sending this email to Pastor Tan and what you meant by that comment?

Serina: Your, Honour, because at this time there were some unbudgeted expenses or unbudgeted amounts that had to be sent to Justin and I had factored that into the cashflow and because of that, there are deficits, the result from that. So I was asking Pastor Tan if he has the latest budget from Justin.

SC: When you say “We are in big trouble in July”, that’s July of which year?

Serina: That would be July of 2006.

SC: I want you to look at Pastor Tan’s reply to that, which is in E-630. That’s two days later, 12 May 2006.

In relation to email E-630 dated 12 May 2006

Pastor Tan wrote:
Serina:
I know you are busy, but you need to look at my Xtron excel to see if you are ok with the projections including the recent $250k USD that we have sent to Justin.
This is the new USA schedule that we need to pay Justin.
So we will be in trouble……
But don’t worry, I am thinking of ways now. Can we discuss this over the phone tomorrow around 3pm.

SC: We see that you sent Pastor Tan on 10 May 2006, to say, “We’re in big trouble”, in July. Two days later, he sends you one, two days later, to say, “So we will be in trouble”.

Serina: Yes

SC: Then he says: “…. I am thinking of ways now.” What did you understand by that?

Serina: I understood that Pastor Tan is thinking of solutions on how to resolve the cashflow deficit.

SC: Can you tell us if the Xtron directors were involved in discussing this issue with you and Pastor Tan at that point in time?

Serina: No, your Honour.

SC: Can you tell us why?

Serina: Your Honour, this is based on my understanding that the Xtron directors have left the day-to-day decision-making on the Crossover to Pastor Kong and Pastor Tan.

SC: If you look at E-445, you will see that this is a series of emails, the earliest of which is 10 May 2006, from Pastor Tan to Wahju.

Serina: Yes

SC: The top of this email is dated 23 May 2006, from Pastor Tan to you. You will see that the early emails from Pastor Tan to Wahju, which don’t involve you, relate to loans from him to Xtron. That’s how you understood it?

Serina: Yes

SC: Then you come into the picture when Pastor Tan emails you on 23 May, immediately above Wahju’s email of 22 May. Do you see that?

Serina: Yes

Pastor Tan wrote
Dear Serina:
1. Punch the new figures that Wahju just email me in to the cash flow.
2. Increase the budget for Chinese Album…
Show me how it looks.

SC: What was your role in that, as you understood it?

Serina: Your Honour, he was asking me to update the budget and the cashflow, and to show him, based on the loan and the expenses for the chinese album, how would the cashflow look like.

Serina replied
Pastor you see that May [2006] onwards the cashflow has major problem. We have only $286k in bank now and we have not paid Unusual for the May Expo rental which is around $275k. If we send the $100k to Taiwan, we can’t pay Unusual. So how can we solve the cashflow problem? It starts in May [2006].

SC: Can you tell us briefly, was that cashflow problem solved, and how?

Serina: Your Honour, that cashflow problem was solved. I cannot recall now how it was solved.

SC: Did Xtron manage to pay Unusual for Expo rental?

Serina: Yes, your Honour, Xtron managed to pay Unusual.

Pastor Tan replied to Serina’s email.
CHC will loan Xtron.
I have spoken to Pastor K [Kong] about this.
CHC will need XPL to be a vehicle for the projects that we are doing in China in the month of Oct. But because of cashflow issues, CHC will prepay or loan XPL[Xtron] first the amount that CHC has already budgeted for China. XPL will return the money to CHC at the end of the year.

SC: Pastor Tan started by saying “CHC will loan Xtron”. Did you see any issues with that?

Serina: Your Honour I did not see any issues with that
 

SC: “… CHC will prepay or loan Xtron can …” can you tell us whether you saw a difference or no difference between “prepay” or “loan”?

Serina: Your Honour, there is a difference. For “loan”, it is a outright lending of money. For “prepayment”, it is based on an obligation, a rental, that there are obligations under that, but it’s just a matter of cashflow, whereby we prepay months ahead.

SC: These prepayments or loans which were being discussed, did you think they would come from the general fund, the Building Fund or some other fund?

Serina: Your Honour, I thought he was referring to the general fund.

<……..>

SC: I wanted your recollection as to whether, up to September 2006, there were any cashflow issues that were still unresolved?

Serina: Your Honour, there were no cashflow issues.

Ex-finance manager was also Ho's backup singer (ST: 17 April 2015)

She denies conspiracy to commit CBT, shares her involvement with church

SERINA Wee did not just handle City Harvest Church's (CHC) accounts, but she was also a backup singer for two of Ms Ho Yeow Sun's Christian albums, she revealed in court yesterday.

The 38-year-old was the last of six accused parties to take the stand in the long-running trial involving the misuse of church monies and the use of alleged sham bond investments to fund Ms Ho's pop music career.

Wee, CHC's former finance manager, faces 10 charges of criminal breach of trust (CBT) and falsifying of accounts.

She insisted yesterday that there had been no conspiracy to commit CBT, and denied allegations made by a church member in 2003 that the church's building fund had been used for Ms Ho's publicity and promotional campaign.

The church member eventually retracted his allegations and apologised - a point highlighted by her lawyer, Senior Counsel Andre Maniam.

Wee began by speaking about her involvement in CHC and how she strongly believed in its Crossover Project - an attempt to spread the Gospel through the music of Ms Ho, the wife of church founder Kong Hee, one of the accused.

Wearing a black and white dress and a black blazer, Wee said that in 1995, on her very first visit to a CHC service, she decided to convert to Christianity. She was 18 then and had just sat her GCE A levels.

Wee, who has an accountancy degree from Nanyang Technological University, told the court she first met Ms Ho in 1998. Ms Ho was then in charge of the church's creative department.

"Sun was involved in Christian albums the church produced every year... and I was involved as a backup singer in two of her albums."

Wee also said that her husband Kenny Low was Ms Ho's dance instructor and had performed in her Gospel outreach concerts.

In 1999, she began working as an assistant accountant in the church. Four years later, she went to her first Crossover concert while in Taiwan and said it impacted her deeply. "It was an eye-opener for me... As Sun sang the songs, it touched the hearts of many (there). Many were in tears... When Sun shared her testimony, a lot of people came forward to receive Christ," she told the court.

Her lawyer asked Wee why she had suggested in a 2003 e-mail for Indonesian tycoon and church member Wahju Hanafi to be refunded the $1.3 million he had given to the church's building fund.

She explained that it was to cover the $963,000 in losses suffered through Ms Ho's first two Chinese pop albums, and the rest could be used to defray album costs for that year.

The prosecution has argued that money from the church's building fund should not have been channelled to the Crossover Project.

But Wee, who was promoted to finance manager by the church in 2005 before resigning two years later, did not think that there was an issue.

The auditors were fine with the idea as long as Mr Hanafi was willing, she said.

The trial continues today.

Serina Wee 'believed Ho Yeow Sun's album would fetch a profit' (ST: 17 April 2015)

SINGAPORE - Former City Harvest Church (CHC) finance manager Serina Wee had the impression that pop singer Ho Yeow Sun's English album would be profitable, she said on her second day of questioning.

This was why she thought music production firm Xtron, which managed Ms Ho, would be able to repay bonds the church had invested in on time, the accountant told the court yesterday.

Wee, 38, is one of six accused of misusing church monies to bankroll Ms Ho's music career, and the last to take the stand.

Ms Ho is married to church founder Kong Hee, one of the six.

Wee maintained the church's investment was not a sham. She said she believed that Ms Ho's English album - which was never released - would be able to sell the projected 1.5 million copies.

Her lawyer, Senior Counsel Andre Maniam, noted Kong wanted to know how long it would take Xtron to repay the bonds if his wife's album sold only 100,000 copies. This was in a 2008 e-mail sent by deputy senior pastor Tan Ye Peng, another of the accused. Wee said it would take up to 116 years. Over $10 million had been spent on the album. Wee said this was "just scenario planning" and that it was a "ridiculous scenario, totally unrealistic, unworkable".

CHC board members were also prepared to go ahead with the investments. "Everyone generally was feeling very good about the album and expecting Sun to be a great success," she said.

Asked how she had such an impression about sales, given that she had not directly dealt with Ms Ho's American producer Justin Herz, she said she trusted Kong, who was dealing with Mr Herz. She added: "Wyclef Jean was a big name in the industry... (so) I (expected) that the 1.5 million sales was doable." The hip-hop musician was brought in by Mr Herz to polish the album.

"The entire project would yield a net profit of $26 million... my impression was that the project was on track," she said.

Kong Hee had asked for ‘unrealistic’ projection of low album sales: Serina Wee (Today: 17 April 2015)

SINGAPORE — American accountants had expected City Harvest Church co-founder and pop singer Ho Yeow Sun’s debut English album to sell nearly 1.5 million copies. But even so, her team in Singapore projected and planned for scenarios in which as few as 100,000 copies were sold. 

Former church accountant Serina Wee crunched the numbers and told deputy senior pastor Tan Ye Peng in Feb 2008, that it would take 70 to 116 years to pay back expenses for the album should only 100,000 copies be sold.

This was an “unrealistic scenario”, but she had worked it out because church co-founder and Ms Ho’s husband Kong Hee wanted to know, Wee told the court today (April 17), her second day on the witness stand.

The last of the six accused church leaders to testify in the long-running trial, Wee faces 10 charges of criminal breach of trust and falsification of accounts. The six accused – Kong, Tan, Wee, former finance manager Sharon Tan, former board member John Lam and former investment manager Chew Eng Han – allegedly misused S$24 million of the church’s building fund on Ms Ho’s pop music career via sham bond investments, and misappropriated another S$26.6 million to cover up the first amount.

The accused persons have testified that low album sales projections were part of scenario planning, and not because they had expected to lose money. The sale of 1.5 million copies, as projected by American accountants, would have enabled Ms Ho’s management company Xtron Productions to redeem S$13 million in bonds it had issued to the church, Wee said. 

In the Feb 2008 email, Wee had also suggested telling the boards of City Harvest and Xtron more about the Crossover’s potential returns and risks, in light of the growing investment required. This showed she did not conspire with others to hide information from the church board, said Wee.

Prosecutors have charged that the Xtron bonds were a sham due to the lack of prior negotiations between both sides, but Wee maintained it was a genuine investment as the church would earn interest and the Xtron directors had accepted the terms.

The accused also relied on Mr Foong Daw Ching, managing partner of the church’s audit firm and Kong’s friend, for advice, said Wee. Mr Foong – a prosecution witness in Sept 2013 who distanced himself from specific advice he supposedly gave to the accused persons – did not object to the church investing its building fund for the purpose of funding Ms Ho’s album as long as it reaped returns, she added.

Former church finance manager Serina Wee takes the stand in City Harvest trial (ST: 16 April 2015)

SINGAPORE - Former City Harvest Church (CHC) finance manager Serina Wee was called to the stand on Thursday in the ongoing trial of six people connected to the church.

Wee, represented by Senior Counsel Andre Maniam, is the last of the six accused to take the stand. She faces 10 charges of criminal breach of trust of monies from the church's building fund and falsifying of accounts.

During the morning session of the trial, Wee spoke about how she became a Christian and her impression of the Crossover Project, which aimed to spread the Gospel through the music of pop singer Ho Yeow Sun. Ms Ho is the wife of church founder Kong Hee.

Wee said she became a Christian in 1995 when she was 18 years old, after attending a service at CHC. She later became an assistant accountant in the church in 1999 and finance manager in 2005, before she resigned in 2007.

She said that the Crossover was an "important mission" of the church and told the Court that she attended a concert related to the project in Taiwan in 2003.

"(It was) an eye-opener for me because I could first-hand experience the impact of the Crossover...As Sun sang the songs, it touched the heart of many attendees. Many people were in tears," she said. "At the end of the concert, when she shared her testimony, a lot of people came forward to receive Christ. So it impacted me a lot, being there personally."

Wee also said that her husband, Kenny Low, was Ms Ho's first dance instructor and travelled with her in her Gospel outreach concerts as a dancer. Wee herself was involved as a backup singer in two of Ms Ho's Christian albums produced by the church.

The prosecution contends that the church's building fund was used to finance Ms Ho's music career through sham bond investments.

Five others connected to CHC, including Kong, face various charges of misusing the church fund and covering up the misuse.

Numbers in cashflow tables came from Kong Hee and Tan Ye Peng: Serina Wee (Today: 17 April 2015)

SINGAPORE — The numbers that she used to draw up the budget for City Harvest Church co-founder Ho Yeow Sun’s pop album project came from Ho’s husband Kong Hee and the church’s second-in-command Tan Ye Peng, said former church finance manager Serina Wee Gek Yin today (April 16).

The last of six church leaders accused of misusing church funds to testify, Wee began her time on the witness stand today answering questions posed by her lawyer, Senior Counsel Andre Maniam.

She denied conspiring with her fellow accused to commit criminal breach of trust, saying that she was merely discussing with co-accused Tan in Jan 2007 the funds needed for Ms Ho’s album. The English album, which was never released, was part of the church’s Crossover Project to evangelise via pop music. Sales projections given to her in early 2007 showed that Ms Ho’s album would be profitable, and that her management company Xtron Productions would be able to pay back its loans by Dec 2008, said Wee.

Among the most closely watched of the six accused leaders, Wee is facing 10 charges of criminal breach of trust and falsification of accounts. The leaders are variously accused of misusing S$24 million of church building funds on Ms Ho’s career via sham bond investments, and misusing another S$26.6 million to cover up the first amount.

Wee was solemn on the witness stand and only cracked a faint smile when asked by Mr Maniam if people called her “Na Wee”, seen in many emails produced in court.

Wee, who has an accountancy degree from Nanyang Technological University as well as a diploma in theology, said she first attended City Harvest in 1995 after completing her A Levels. She joined the church as an assistant accountant in 1999 and left in 2007 to set up her own company called Advante Consulting. She served as back-up vocalist and musician in the church, and was a back-up singer for two of Ms Ho’s Mandarin albums.

She was the Crossover Project’s administrator and said she did its accounts and budgeting, using figures obtained from Kong and Tan.

The two pastors made Xtron’s day-to-day decisions as they were involved in the Crossover Project, she said. Kong oversaw Ms Ho’s album project in the United States while Tan was in charge of the Crossover in Asia. Xtron’s directors — made up of church members with business or financial experience — would sign cheques and be informed when it came to taking loans and making bond investments, said Wee.

Wee said she saw nothing wrong with several issues that prosecutors have taken issue with in the trial – such as the backdating of Xtron’s board meeting minutes, Tan thinking of ways to solve Xtron’s cashflow deficit when he did not hold any official position in the company, as well as her proposal to transfer the church’s editorial and graphics department to Xtron to justify an extra S$50,000 paid by the church to Xtron. In the last instance, payments were for real services provided and the department could then generate income for Xtron, she said.

Wee continues on the witness stand tomorrow.

Besides Kong, Tan and Wee, the other accused are former board member John Lam, former finance manager Sharon Tan and former fund manager Chew Eng Han, who has since left the church. They each face three to 10 criminal charges.

16 April 2015 – Serina Wee’s Counsel Opening Remarks (MrsLightnFriends: 16 April 2015)

Brief opening remarks from Senior Counsel Maniam
 

Your Honour knows my learned friends Mr Sreeni has spoken about how the prosecution is trying to join dots to form a picture to present to the court. I’d like to build on that, just to emphasise that some of the dots only involve some of the accused. Your Honour would already have a flavour of that because at times the prosecution has put rather broad propositions such as the bond transaction co-accused did this or that, when the particular email only involves, say, two or three of them.
 

I can give your Honour a couple of examples. For instance, exhibit E-1 [200 000 CDs email], the email exchange that concerns the 200,000 units in album sales, Pastor Kong is not on that, and neither is John.
 

The July 2007 board meeting. Pastor Kong didn’t attend that, and neither did Eng Han.
 

The 9 April 2009 meeting with Mr Sim Guan Seng, which your Honour heard a lot about over the last couple of days, my client, Serina wasn’t there and neither was Eng Han.
 

When your Honour comes to critically review the evidence at the end of the day, I would ask you Honour to look at each of the individuals as an individual. Yes, it is a conspiracy charge, but each of them stands before your Honour to be judged aas an individual. Whatever dots the prosecution wants to join for each of them must be a real dot that concerns them. It mustn’t just be some broadbrush proposition that says that accused did this or that.
 

Having said that, there are admittedly some dots that connect all of the accused: their love for the church, their belief in the Crossover Project as a core mission of the church, their belief that what they were doing was in the interest of the church and was not against the law.
 

At the end of the day, I would invite your Honour to connect those dots and look at the picture that they form.

It’s a long trial. I’ve said enough, and it’s time for my client [Serina Wee] to speak for herself.

CHC’s Trial – Firna Bond (MrsLightnFriends: 16 April 2015)

There was a long series of questions in cross-examination by DPP about whose money; Is it Wahju’s money or City Harvest Church’s money?

This is in relation to the 3^rd charge. The 6 of them are charged to commit criminal breach of trust by dishonestly misappropriating $11million from the Building Fund for the purpose of funding Sun Ho’s music career and for the purpose of providing funds to Wahju Hanafi.

The Prosecution’s case is Firna bonds is meant to be no more than the conduit through which the Building Fund monies would pass in order to be channeled to the funding of Sun’s music career.

TYP insisted that Wahju was using his own money to fund the Crossover.

DPP asserted that Wahju’s role is to carry out instructions that Serina conveys to him on when to draw down and what to do with the monies drawn down.

The DPP’s put to TYP on the last day of cross-examination.
 

DPP: “I’m putting it to you that from the email evidence that we have seen, it is clear that the understanding among you, your sham bond co-accused and Wahju himself was that Firna and Wahju were, in the context of this CHC Firna bonds, meant to be no more than the conduit through which the Building Fund monies would pass in order to be channeled to the funding of Sun’s music career”

DPP: “I’m putting it to you that there was never any intention for this sham CHC Firna bond transaction to create genuine legal obligations, and this is seen, for example, from the fact that insofar as repayment under the CHC Firna bond BSA was concerned, it was you and your sham bond co-accused who were making plans and taking steps to ensure that the money would be put back in the church.”

DPP: “I’m putting it to you that you knew that the CHC Firna BSA was not a genuine independent commercial and arm’s length investment and yet you have consistently lied to the auditors, lawyers and the court that it is such a genuine investment.”

DPP: “I’m also putting it to you that it was you who gave instructions for the Firna bonds to be redeemed and cleared off the boos as well because of your concerns that the audit scrutiny by Mr Sim would also result in the true nature of those bonds being scrutinized and their sham nature exposed.”

Recap of TYP re-examination on 15 April 2015

Senior Council Sreeni read Wahju’s evidence of 4 September 2013. Wahju Hanafi answer is: “’your fund’ can means that it is your portion that I have promised you.”

Sreeni: Is that also your understanding?

TYP: Yes, your Honour, this is my understanding, that it is an amount of money that is committed for the Crossover Project.

Continue with Wahju’s evidence. Question: Who is Firna helping to pass through the money here? Wahju replied, “I’m helping to sponsor the Crossover.”

Then DPP asked again, “Answer the question, witness. Who was Firna helping to pass through the money? Who? Wahju replied, “The money come through the bond, and when it comes to bond, it becomes my responsibility that I owe the money to CHC, and then the money then go back to redeem my debt to Ultimate Assets, and then from the Ulitmate Assets, I was using the money to help finance the Crossover, because I have another source of S$7million that are coming in from Papua New Guinea. So if I don’t have two source of money, I will not be able to pay UBS $7million and then at the same time, use this money to fund all these projects. So very clearly there are two source of money that comes in to make up all this transaction to happen, which I already promised to sponsor this project, or to continue the project.”

…..
Wahju said, “I was helping Sun, I was helping the Crossover.”

Sreeni: Do you agree with Wahju’s position?

TYP: Yes, your Honour

<….>

Sreeni: You have Wahju’s explanation. You have your explanation. Then you have the emails that the prosecution suggest say something else. What is your final say on the Firna bonds, Ye Peng, about the two versions, two theories? One is entirely sham; Firna was just a conduit, that’s why Wahju refers to it as “your funds”, that’s why Eng Han says, “We’ll find the money to pay”, versuse what you say and what Wahju says on oath in court. Take your time to answer it because it’s very important for the third charge.

TYP: Your Honour, my understanding is consistent with Wahju’s explanation because of the 30 July 2008 meeting that I had with him together with Eng Han, and he already explained to us that he would take back his own shareholder’s loan that he has given to Firna and then now this becomes his money and he’a ble to use his own money to support the Crossover Project.

And so, your Honour, even though Serina gives him instructions, that’s because he has already agreed to support the Crossover, but, as I’ve already given my evidence, Wahju does not do exactly everything that Serina says. He makes up his own mindl he does his own cashflow management, and we have seen from his evidence that he has another sum of money coming in from Papua New Guinea. So that is not something that is transparent to me. It is just Wahju managing his own funds. So it is not a sham, your Honour, and Wahju, as he has said in his evidence, if he’s the borrower, he will make sure that he pays back the money with interest to the church.

What did Wahju Hanafi the prosecutor witness say?
DPP: Can you confirm that this money that has been drawn down under Firna bond subscription, is it or is it not for Firna’s working capital?

Wahju: Remember in the very beginning when we raised this bond, I told the court, your Honour, that this money is to pay back all the $7million that the BVI company loan to Firna. So no matter what the purpose is to send back the full $7million out of the $8million equivalent to $11million that I received from Firna, first of all to cover this BVI. So the majority of the $8million plus $7million of them will have to be sent back to Ultimate Assets to cover this BVI company.

……..

DPP: But, you know, once the bond like you say is drawn down, the money comes to you, is it your money or the church money or AMAC’s money?

Wahju: It’s my money.

There were some email exhibits being referred in the court. Wahju followed Serina’s instruction to transfer the money raised a few eyebrows in the court.

…….

DPP: Go back to the email, …. So why is Serina able to tell you, “Do this and do that” for the $5million drawdown?

Wahju: She can tell me anything, but it’s up to me to choose what I do with my money.

DPP: Tell us, of this instruction that she gave you, what did you do? Did you, for the 900,000 do according to what is stated here?

Wahju: Yes, some of them I did it..

DPP: No, tell us item by item first. $990,000 did you follow the instruction?

Wahju: Yes, I think I do this

DPP: Then how about the $674,000 did you follow the instruction?

Wahju: Yeah, I think I did this as well

DPP: The $2.2 million?

Wahju: No

DPP: The $1.135 million?

Wahju: Maybe, I can’t exactly remember.

……

DPP: Why were you following her [Serina] instruction on where to direct the money …

Wahju: Well, that was the fact of life, I’m still owing those people

DPP: So if you were following her instruction and made payment back, for example the $990,00, the $674,000 that would take away from the S$11million total amount that you draw down from Firna bond, isn’t it?

Wahju: Your Honour, this is my money, whether it is ….

DPP: No, answer the question first!

Wahju: whether it is $11million or whether it is $5million, $7million from PNG, does it make any difference? I could have used the money from Papua New Guinea, the US$7million, to utilize for this. It’s just that, as I said to you in my account, in my books, I have to clear Ultimate Assets being a lender ……

……..

DPP: Let’s look at Serina’s email … Let’s go item by item. $990,000 was it held back by UBS?

Wahju: No

DPP: Next one, the $700,00 was it held back by UBS?

Wahju: No

DPP: The $674,000, was it held back by UBS?

Wahju: No

DPP: Next $2.2 million, was it held back by UBS?

Wahju: No, I didn’t do this one.

DPP: What do you mean you didn’t do this one?

Wahju: I didn’t intend to do this, so no money is held back on this one.

DPP: Did you make the transfer according to what Serina instructed here?

Wahju: No

DPP: Not at all?

Wahju: Not at all?

DPP: Why not?

Wahju: It is my will, it is my choice, whether I want to buy somebody a house or I don’t buy somebody a house.

…. Senior Counsel Sreenivasan stood up…..

SC Sreeni: May it please, your Honour. I get a feeling of déjà vu. ….

Judge …… The question was, why did you not make the transfer?

Wahju: Yes, I told him that it’s my will that if I don’t want to send or if I don’t want to buy somebody a house, it’s my will. Why do I have to follow Serina?

DPP: Is there any reason why you did not want to make that transfer?

Wahju: I just don’t want to buy somebody a house.

DPP: Even though that somebody presumably would be Sun Ho?

Wahju: I didn’t get you.

DPP: Even when that somebody is Sun Ho, the person that you are managing her music career.

Wahju: Yeah, I can rent her a house, a unit, a flat, an apartment. But I need the money more than her at that time.

<……>

Wahju tried to explain there was actually $15million going around from Papua New Guine or from Firna about the same time all goes to the same account.

DPP: But be it the $15million from Papua New Guinea or the proceeds under the Firna bond, these monies were considered your money or someone else’s money, the Papua New Guinea money

Wahju:That’s my money.

What did Chew Eng Han say?
Chew said is Wahju’s money

Chew Eng Han’s EIC of 26 Jan 15
Your Honour, the idea for Firna as a company to issue bonds was my idea. I knew Wahju had a glass factory, because he tells me about it, how he purchased a glass factory about one year before, or something. He was optimistic. He says this is the second largest glass factory in Indonesia and the potential is great. He told me he had big clients, and the biggest client was IKEA, that was going to buy glasses from him. I made a trip to Jakarta to see his factory. He showed me around the whole factory. He showed me he had something like, I think four big machines that were doing glassware. He told me his plans to buy more new machines because the orders were flowing in and IKEA wanted more, to order more. He told me that the land and the factory that he was taking me on his tour of was worth US$50million. And that was the due diligence that I did to the best of my ability as a fund manager. And….. just as for Xtron and for Firna, these are run by people who are City Harvest Church members, who are known to be trusted and to hold the visions of the church. And because of that, it is not unreasonable to cut down the degree of due diligence, because of the very fact that we trust them. So what Wahju Hanafi tells me when he says it’s US$50million for the factory, I believe him and till today, I still believe him. When he says that orders are flowing in, he needs to increase capacity, I believe him as well.

So, yes, the idea for Firna to issue bonds was my idea. The idea for Wahju to subsequently withdraw monies from Firna, because he had previously made a shareholder’s loan to Firna, through UA, was my idea as well. I said, “If you [Wahju] had previously loaned money to Firna, now if City Harvest buys bonds in Firna, what is effectively happening is that City Harvest is now funding the working capital of Firna. You take back your money, which you have previously supplied to Firna, and this is your personal money, but the agreement must be this: that if we do this for Firna, you, as a person as an individual, Wahju Hanafi, using your own personal money, you have to promise to use it, at least part of it, or the major part of it, for the Crossover”.

And that was the deal, your Honour. And that’s why later on, we look at some of the emails, the terms we used, like “us”, “we should bail out Wahju”, I think we need to define “Wahju” from “Firna”. Who is “us”? There are a lot of terms that are being used, that could cause confusion, but which I want to bring clarity to.

But if we understand the basis on which these bonds was done, then the emails will make a lot of sense. In the financial markets, again, where I come from, it is not unusual for, say, a man that owns a private business to go and issue shares or, rather, to sell his business to, let’s say, a listed company in Singapore, and that owner X that owns a valuable business agrees with the listed company that if I sell you for all my shares in this business for $20million, the listed company is going to pay X cash of $20million, it is not unusual for the listed company to say, “Out of the $20million, I want you to use $12million to do certain transactions that still relates to the listed company.”

In other words, here, we’re talking about the owner of a business making an exchange, exchanging shares or bonds in his business, and when he gets the cash, he agrees to abide by the deal that was made, relating to his personal monies. And …. what I’ve just said is consistent with my CAD statement.

CAD Statement: What is the purpose of Firna bonds?

Chew: Firna bonds were issued so that Wahju Hanafi could withdraw the loans he had made to PT Firna from UAL which is Ultimate Assets Ltd with these monies that are rightfully his, these are his personal monies he could use them, whether all or partially to fund the Crossover. So really there is nothing sinister about this. These kind of transactions in the markets are not uncommon.

CAD Statement: Do you agree that the funds for the Crossover Project were not from Wahju but from CHC?

Chew: I do not agree. Where the money went from CHC to PT Firna it enabled Wahju Hanafi to withdraw the loans which he had made to PT Firna previously. These were monies that belonged to him personally and, therefore, whatever monies used by UAL for the Crossover was his personal monies. In effect, CHC ended up funding the working capital of PT Firna and by so doing enabled Wahju Hanafi to withdraw the loans which he had provided to PT Firna.

CAD Statement: Why was it necessary for the funds to go through Firna?

Chew: Because it was actually prudent. It made commercial sense for CHC to invest into PT Firna was a sound commercial business which had reasonably strong cashflow. I chose Firna because I trusted Wahju. He’s a man of means and also because Firna was a good business.

In the end, the protection for City Harvest which buys Firna bonds comes from many sources. There are actually three layers of protection for CHC when it buys Firna bonds. Number one from Firna’s own business cashflow. In other words, if Firna earns money from selling glass and he has $20million profit a year, he has no problem paying back the $11million of bonds that was eventually issued.

The second layer is this: If Firna’s business doesn’t take off for some reason, there is still Wahju’s personal guarantee that was attached to the bond, and Wahju has many sources of repayment. Wahju has other assets in Papua New Guinea, a supermarket chain. He had properties in Singapore and in Australia as well, and that was the second layer of protection for City Harvest. And the third one, of course, is the album sales itself. That, as Wahju used his personal monies to invest into the album and I’ll show later on that at that point in time, before the Firna bonds were issued, there was expectations for huge income to come in. And therefore, if Wahju get UA, which is the new manager for Sun, gets the profits from the album, then he will be able to inject back into Firna and then Firna can pay back the bonds.

….

During the investigations, and even now, we’re constantly being thrown this scenario: hey, everything you do is just a sham; you’re just trying to make things look good on the outside[cover story]. My answer was this:

“PT Firna was chosen because it was run by a member of the church whom we had faith in. That’s not a sham. The church is not going to buy S$11million of bonds in a company run by someone that the church doesn’t trust.

It was also a large business that had ability to service the bond repayments.

And that’s from the glass business, At the worst case, your Honour, even if Firna doesn’t make it in terms of business, we could always seize the assets the factory itself, sell it, and that’s worth US$50 million. So the choice to invest in PT Firna, I believe, was a good investment choice, and that’s what I said in 2010 and I still stand by it.”