Xtron loan repayment never factored in: DPP (ST: 9 May 2015)

CITY HARVEST Church (CHC) loaned $13 million to Xtron over two years - but repayment of the loan was never formally documented in the company's cash flows.

Former CHC finance manager Serina Wee, 38, conceded this in court yesterday, during her 10th day on the stand in the long-running trial.

Xtron was the company that managed the music career of Ms Ho Yeow Sun, a pop singer and the wife of founding CHC pastor Kong Hee, 50.

Wee and Kong are among six church leaders accused of misusing church money to bankroll Ms Ho's secular music career.

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

These investments included the $13 million Xtron bonds, entered into by CHC in August 2007 and which were due for payment two years later.

Xtron had intended to use the money to pay for the production of Ms Ho's United States album and then repay the debt with album proceeds.

But the prosecution highlighted Xtron's cash-flow spreadsheets and noted that repayment of the "substantial amount" was never factored in.

Deputy Public Prosecutor Christopher Ong asked Wee, who was responsible for the company's accounts, why this was so. "If you say it was important to repay the bonds upon maturity because Xtron has real obligations... why is it not keyed into your cash flow?"

Wee, who was calm and composed despite the grilling, said the debt was "just administratively" not keyed in.

Later, she told the court that church leaders had "informally assessed" the bond liabilities, but these were never put into a "formal spreadsheet".

DPP Ong said this showed that the church leaders were not concerned about repayment and were content with "kicking the can of the debt down the road".

He noted that no proper analysis had been done to find out whether the bonds could be repaid based on album sales estimates. "I put it to you that this lack of concern was because you knew the bonds you and (the co-accused) had created were just a sham."

Wee disagreed, saying she had mentioned in e-mail messages that church leaders had to find a way for Xtron to redeem the bonds.

The trial continues into its 130th day next Monday.