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.