Court also told that reason for hurried redemption of bonds was for Suntec purchase, not because of anonymous threat
INDONESIAN businessman and City Harvest Church (CHC) member Wahju Hanafi says he never relied on the "secret letter" when he agreed to the $11 million bond issue his company, The First National Glassware (Firna), made to the church in 2008.
In fact, Mr Hanafi told the court yesterday, he had not even seen the said letter at the relevant time and would never "take advantage of the church" that way.
The prosecution had produced the letter last week, to try to prove its case that the Firna bonds were a sham.
Under the terms of the bond agreement, Firna was to issue up to $24.5 million in bonds to CHC; and the church would be entitled to convert the bonds to shares in Firna, amounting to 40 per cent of Firna's issued capital.
The "secret letter" (signed by CHC board member John Lam on behalf of the church's management board) was never made public until the prosecution produced it as evidence. It states that, if CHC were to convert the bonds to Firna shares, the church would sell all the shares back to Firna for just $1 - essentially nullifying the convertibility clause.
Senior Counsel Kenneth Tan, who represents Lam, revisited the document yesterday when the defence finally got to cross-examine Mr Hanafi.
He referred to a statement made by Mr Hanafi and his father-in-law Tjandra Kusuma (the other shareholder of Firna) to Firna's shareholders, stating that they waive their rights as shareholders to have the right of first refusal if the bond was converted to Firna shares. The prosecution had shown this document as being attached to the secret letter in its exhibit.
But, as Mr Tan pointed out yesterday: "When you and your father-in-law signed this document (the statement to shareholders), on or around Oct 7, 2008, this document was not attached to the first page (the secret letter), was it?"
"No," Mr Hanafi said.
"You only received this (secret letter) by e-mail on June 4, 2009?" Mr Tan asked.
"Correct."
"It didn't matter to you at all when you signed the second page (statement) of the Firna bond that this letter was not with you?"
"No."
"Because you were not going to rely on this letter if conversion was effected by the church?"
"Yes."
Mr Hanafi added: "I just want my father-in-law (to be) willing to sign the document, and I'm happy enough, and we know in our hearts that we're not going to take advantage of the church . . . at least, I would give them (CHC) the same value of money back."
He also testified that Lam was not involved in either the budgeting or fund-raising for the Crossover Project (CHC's way of evangelising through pop music) as far as he knew, nor was he involved in the bond issue.
Senior Counsel N Sreenivasan, who represents CHC deputy senior pastor Tan Ye Peng, touched on the issue of why the church was in such a desperate hurry to unravel another bond issue: $11.455 million in bonds issued by Firna to Xtron Productions, a music production house that used to manage Sun Ho's career, in December 2009.
The prosecution produced an e-mail on Thursday, which Mr Hanafi had sent to his wife on March 26, 2010, saying: "CHC has some serious issue from an anonymous px (person) who wrote in and threatened to open up all our connection with Xtron and Sun (Ho's music) project, etc, so now they want to find quick cash to pay us so I can (redeem Firna's bonds issued to Xtron)."
It is the prosecution's case that this threat from the anonymous person prompted the sudden need to find cash to pay Mr Hanafi.
Yesterday, Mr Sreenivasan said his client, Tan YP, had told him that there was instead another reason why the church was in such a hurry to get the bonds redeemed ahead of time. "The reason they were doing that was that, in January 2010, the church had decided to buy an interest in Suntec City . . . Then I'm told - my instructions (from my client) again - that, to fund that acquisition, one of the things they needed to do was to get back the advance rental from Xtron . . . And for Xtron to pay back (the rental), Xtron had to get back money that it had lent to other people - and one of the bodies that Xtron had lent the money to was Firna (via the bond issue).
"So, I'm told, the reason why they were chasing for Firna to pay back Xtron is so that Firna can pay back Xtron, Xtron can pay back the advance rental and the advance rental can be used to buy Suntec," Mr Sreenivasan said.
Mr Hanafi said he was not aware of all of this.
It is the prosecution's case that some $12 million CHC paid out to Xtron as "advance rental" was a sham, as the money was instead used by Xtron to purchase the Firna bonds - and eventually round- tripped back to CHC.
The hearing resumes on Monday.
CHC pastor Kong Hee, deputy senior pastor Tan Ye Peng, former board member Chew Eng Han, former board member and former finance manager Serina Wee, board member John Lam and finance manager Sharon Tan are on trial for allegedly channelling the church's building funds into Kong's wife Sun Ho's music career, and then coming up with an elaborate round-tripping scheme to cover that up.
Monday, September 9, 2013
Saturday, September 7, 2013
CHC leaders sought loans to buy Suntec shares (Today, 7 Sept 2013)
SINGAPORE — Several City Harvest Church leaders who tried anxiously to borrow money in 2010 were doing so because of the church’s purchase of a stake in Suntec Singapore, one of the defence lawyers in the trial told the court yesterday.
Funds were needed for the acquisition, said Senior Counsel N Sreenivasan, the lawyer of Tan Ye Peng, one of the accused.
The church had purchased a 20 per cent stake in Suntec in early 2010, which it subsequently increased to 39.2 per cent.
Mr Sreenivasan said that, according to his client, the church sought funds through loans and through the return of advance rentals it had paid under a Licence Agreement to audio-visual services company Xtron Productions.
Prosecutors in the trial of five church leaders and a former leader had on Thursday produced BlackBerry and e-mail discussions in early 2010 among Tan, church co-founder Kong Hee, former fund manager Chew Eng Han, accountant Serina Wee Gek Yin and others on the urgent need for loans worth millions of dollars.
Yesterday, Mr Sreenivasan tried to show that the transactions at the heart of some criminal charges — what prosecutors contend is the “round-tripping” of church funds related to sham bond transactions — were not unusual.
The redemption of bonds issued by prosecution witness Wahju Hanafi’s Indonesian company PT The First National Glassware (Firna) to the church, which were then reissued to Xtron, were akin to restructuring of loans, he suggested.
And the funding given to Firna by Chew’s investment firm AMAC Capital Partners via Ultimate Assets — Mr Hanafi’s British Virgin Islands-incorporated shell company — was “bridging finance” to ease Firna’s cash-flow issues.
Agreeing with Mr Sreenivasan’s suggestions, Mr Hanafi said that as Firna’s owner, he did not feel there was anything dishonest about the bond transactions or the funds of S$5.8 million and S$5.6 million he received from AMAC.
The Indonesian businessman and long-time church attendee also told Senior Counsel Kenneth Tan — former church board member John Lam Leng Hung’s lawyer — that as far as he knew, Lam was not involved in budgeting and financing of the Crossover Project, the church’s endeavour to reach out to non-Christians through the music career of Kong’s wife, Ms Ho Yeow Sun.
The six accused allegedly misappropriated S$24 million of church funds into sham bonds for Ms Ho’s career, and another S$26.6 million to cover up the first amount.
Defence lawyers will continue their cross-examination of Mr Hanafi on Monday.
Funds were needed for the acquisition, said Senior Counsel N Sreenivasan, the lawyer of Tan Ye Peng, one of the accused.
The church had purchased a 20 per cent stake in Suntec in early 2010, which it subsequently increased to 39.2 per cent.
Mr Sreenivasan said that, according to his client, the church sought funds through loans and through the return of advance rentals it had paid under a Licence Agreement to audio-visual services company Xtron Productions.
Prosecutors in the trial of five church leaders and a former leader had on Thursday produced BlackBerry and e-mail discussions in early 2010 among Tan, church co-founder Kong Hee, former fund manager Chew Eng Han, accountant Serina Wee Gek Yin and others on the urgent need for loans worth millions of dollars.
Yesterday, Mr Sreenivasan tried to show that the transactions at the heart of some criminal charges — what prosecutors contend is the “round-tripping” of church funds related to sham bond transactions — were not unusual.
The redemption of bonds issued by prosecution witness Wahju Hanafi’s Indonesian company PT The First National Glassware (Firna) to the church, which were then reissued to Xtron, were akin to restructuring of loans, he suggested.
And the funding given to Firna by Chew’s investment firm AMAC Capital Partners via Ultimate Assets — Mr Hanafi’s British Virgin Islands-incorporated shell company — was “bridging finance” to ease Firna’s cash-flow issues.
Agreeing with Mr Sreenivasan’s suggestions, Mr Hanafi said that as Firna’s owner, he did not feel there was anything dishonest about the bond transactions or the funds of S$5.8 million and S$5.6 million he received from AMAC.
The Indonesian businessman and long-time church attendee also told Senior Counsel Kenneth Tan — former church board member John Lam Leng Hung’s lawyer — that as far as he knew, Lam was not involved in budgeting and financing of the Crossover Project, the church’s endeavour to reach out to non-Christians through the music career of Kong’s wife, Ms Ho Yeow Sun.
The six accused allegedly misappropriated S$24 million of church funds into sham bonds for Ms Ho’s career, and another S$26.6 million to cover up the first amount.
Defence lawyers will continue their cross-examination of Mr Hanafi on Monday.
Friday, September 6, 2013
Statement from Chew Eng Han (Mrs Light & Friends, 7 Sept 2013)
Subsequent to a skype conference call on Aug 1 2013 with Dr AR Bernard, I have requested and been granted a meeting with him when he visits Singapore in the coming weeks.
Dr Bernard is the chairman of the advisory board of City Harvest Church. The objective of this meeting, as conveyed to Dr Bernard, is to abide by the biblical process of dealing with spiritual and moral issues which I have with the church leadership.
Dr Bernard is a highly respected figure in his home base in the US, as well as in Singapore, and I have reason to hope that he will deal with the issues at hand with utmost seriousness and responsibility.
Dr Bernard is the chairman of the advisory board of City Harvest Church. The objective of this meeting, as conveyed to Dr Bernard, is to abide by the biblical process of dealing with spiritual and moral issues which I have with the church leadership.
Dr Bernard is a highly respected figure in his home base in the US, as well as in Singapore, and I have reason to hope that he will deal with the issues at hand with utmost seriousness and responsibility.
Messages show leaders scrambling to 'plug' hole (ST, 6 Sept 2013)
A SERIES of BlackBerry messages and e-mails dated March 30, 2010 were produced in court yesterday, showing how City Harvest Church leaders had scrambled to "plug" a financial hole before an extraordinary general meeting three weeks later.
It is not clear what caused the scramble. But earlier in the trial, prosecutors showed that in 2009, the church's external auditor Sim Guan Seng had raised concerns about the millions which had been channelled to church-linked companies, Xtron Productions and AMAC Capital Partners.
The series of messages on March 30 started with a message from church founder Kong Hee.
7.30am:
Kong sends a BlackBerry message to executive pastor Aries Zulkarnian and AMAC director Chew Eng Han, one of the accused. "Dear guys, if we have an EOGM on April 18, do we have time to plug the hole?"
9.02am:
Chew replies: "It is too tight if we want the actual funds to have been paid."
9.03am:
Kong replies: "Eng Han, when is the soonest possible?"
9.55am:
Chew replies: "Pastor, I am thinking of another way, which may work better and make more sense... will revert by today okay?"
Minutes later, Chew asked accountant Serina Wee, one of the accused, for details on when Indonesian businessman Wahju Hanafi, had stepped down as director of Xtron.
He also asked her if Mr Hanafi had issued a personal guarantee for the bonds issued by Xtron during his time there.
Before 6pm, Wee sent an e-mail to Chew with two personal guarantees attached.
She wrote: "I tried my best but it is really a very technical document. Can you please help to read through and edit as necessary. I dated both Aug 15, 2007 before we first drew down $7 million bonds in 2007."
One of the guarantees was for Mr Hanafi to sign and indemnify Xtron from losses.
The state believes the bonds in Xtron, which managed the music career of Kong's wife Ho Yeow Sun from 2003 to 2008, were a sham.
Instead, the $13 million that the church invested in them were funnelled into supporting Ms Ho's singing career, it is alleged.
It is not clear what caused the scramble. But earlier in the trial, prosecutors showed that in 2009, the church's external auditor Sim Guan Seng had raised concerns about the millions which had been channelled to church-linked companies, Xtron Productions and AMAC Capital Partners.
The series of messages on March 30 started with a message from church founder Kong Hee.
7.30am:
Kong sends a BlackBerry message to executive pastor Aries Zulkarnian and AMAC director Chew Eng Han, one of the accused. "Dear guys, if we have an EOGM on April 18, do we have time to plug the hole?"
9.02am:
Chew replies: "It is too tight if we want the actual funds to have been paid."
9.03am:
Kong replies: "Eng Han, when is the soonest possible?"
9.55am:
Chew replies: "Pastor, I am thinking of another way, which may work better and make more sense... will revert by today okay?"
Minutes later, Chew asked accountant Serina Wee, one of the accused, for details on when Indonesian businessman Wahju Hanafi, had stepped down as director of Xtron.
He also asked her if Mr Hanafi had issued a personal guarantee for the bonds issued by Xtron during his time there.
Before 6pm, Wee sent an e-mail to Chew with two personal guarantees attached.
She wrote: "I tried my best but it is really a very technical document. Can you please help to read through and edit as necessary. I dated both Aug 15, 2007 before we first drew down $7 million bonds in 2007."
One of the guarantees was for Mr Hanafi to sign and indemnify Xtron from losses.
The state believes the bonds in Xtron, which managed the music career of Kong's wife Ho Yeow Sun from 2003 to 2008, were a sham.
Instead, the $13 million that the church invested in them were funnelled into supporting Ms Ho's singing career, it is alleged.
CHC transactions were legal, no misappropriation of funds: defence (CNA, 6 Sept, 2013)
SINGAPORE: The trial of six City Harvest Church leaders continued on Friday, with defence lawyers cross-examining Indonesian businessman Wahju Hanafi.
They sought to show that because the church wanted to buy a stake in Suntec City, the six accused, who are church leaders, then attempted to reclaim money from the church's investments and loans, as well as restructured bonds it had bought.
The defence lawyers argued that these financial transactions were legal, and no dishonest misappropriation of funds had been carried out.
Six leaders of the church are standing trial for allegedly misusing millions of dollars in church building funds to promote the singing career of Sun Ho, wife of church founder Kong Hee.
When questioned by the defence team, prosecution witness Mr Hanafi said he knew the transactions were for a legitimate purpose, and were "very, very legal".
Mr Hanafi, 53, owns Firna - one of the companies that have been named for allegedly helping the church leaders misuse the funds.
Defence lawyer N Sreenivasan pointed out that documents for the various financial transactions, such as the bond documentation, had been drafted by prominent law firms that included Drew & Napier and Rajah & Tann, and registered with the Central Bank in Indonesia.
He also said that the church's bond monies and those of its investment manager AMAC Capital Partners were paid back in full with interest.
The hearing continues on Monday.
They sought to show that because the church wanted to buy a stake in Suntec City, the six accused, who are church leaders, then attempted to reclaim money from the church's investments and loans, as well as restructured bonds it had bought.
The defence lawyers argued that these financial transactions were legal, and no dishonest misappropriation of funds had been carried out.
Six leaders of the church are standing trial for allegedly misusing millions of dollars in church building funds to promote the singing career of Sun Ho, wife of church founder Kong Hee.
When questioned by the defence team, prosecution witness Mr Hanafi said he knew the transactions were for a legitimate purpose, and were "very, very legal".
Mr Hanafi, 53, owns Firna - one of the companies that have been named for allegedly helping the church leaders misuse the funds.
Defence lawyer N Sreenivasan pointed out that documents for the various financial transactions, such as the bond documentation, had been drafted by prominent law firms that included Drew & Napier and Rajah & Tann, and registered with the Central Bank in Indonesia.
He also said that the church's bond monies and those of its investment manager AMAC Capital Partners were paid back in full with interest.
The hearing continues on Monday.
City Harvest trial: Transactions were because church wanted to buy Suntec property (ST, 6 Sept 2013)
City Harvest church leaders wanted to buy a stake in Suntec City and had recalled the church's investment money and loans to raise funds.
The transactions involved were legal and in some cases even "common" in the business world. That was the explanation put up on Friday by defence lawyers, who were giving a more prosaic take on financial deals which the State believes were used to conceal a misuse of church funds.
Three prominent law firms including Singapore's Drew & Napier and Rajah & Tann had also drafted these and other allegedly suspect transactions and found nothing wrong with them, the defence argued.
City Harvest founder Kong Hee and five of his deputies were charged last year with misusing about $50 million of church funds, partly through the buying of alleged sham bonds.
A prosecution witness had said earlier that former church investment manager Chew Eng Han, one of the accused, told him that the church's auditors had grown "uncomfortable" with the bonds. Chew then proposed a plan to "restructure" these bonds.
But defence lawyer N. Sreenivasan noted that at the time, City Harvest was in talks to purchase the Suntec stake, and suggested that the various transactions that followed was to finance this.
He also noted that in the end, the church and its investment manager AMAC Capital Partners' bond monies and were paid back with interest in full, so they had not suffered any losses as a result of the transactions.
The transactions involved were legal and in some cases even "common" in the business world. That was the explanation put up on Friday by defence lawyers, who were giving a more prosaic take on financial deals which the State believes were used to conceal a misuse of church funds.
Three prominent law firms including Singapore's Drew & Napier and Rajah & Tann had also drafted these and other allegedly suspect transactions and found nothing wrong with them, the defence argued.
City Harvest founder Kong Hee and five of his deputies were charged last year with misusing about $50 million of church funds, partly through the buying of alleged sham bonds.
A prosecution witness had said earlier that former church investment manager Chew Eng Han, one of the accused, told him that the church's auditors had grown "uncomfortable" with the bonds. Chew then proposed a plan to "restructure" these bonds.
But defence lawyer N. Sreenivasan noted that at the time, City Harvest was in talks to purchase the Suntec stake, and suggested that the various transactions that followed was to finance this.
He also noted that in the end, the church and its investment manager AMAC Capital Partners' bond monies and were paid back with interest in full, so they had not suffered any losses as a result of the transactions.
Thursday, September 5, 2013
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