Auditor knew Building Fund was used to buy bonds: City Harvest trial (BT: 15 Jan 2014)

[SINGAPORE] Defence counsel N Sreenivasan, who represents City Harvest Church (CHC) deputy senior pastor Tan Ye Peng, tore into the prosecution's witness yesterday, accusing her of changing his questions, playing games, and being inattentive and a bad witness.

But Tiang Yii, assurance partner at Baker Tilly TFW, held up under the brutal cross-examination, answering in a clear and consistent manner.

Ms Tiang was giving evidence about her time as the audit engagement partner for CHC (between January 2006 and June 2007) and for Xtron (FY2006 and FY2007).

Xtron is a production house and artiste management company set up by CHC members. It managed the career of Sun Ho, CHC founder and senior pastor Kong Hee's wife, between June 2003 and July 2008.

Xtron issued $13 million in bonds to AMAC Capital Partners, a business run by former CHC board member Chew Eng Han; CHC was said to be the beneficial owner of these bonds. It is the prosecution's case that senior members of the church misappropriated funds meant for CHC's Building Fund to pay for these bonds - which went towards paying for Ms Ho's music career - and then sought to cover this up with a series of roundtripping transactions.

Senior Counsel Sreenivasan, who sought to show that the external auditors were well aware of what the funds were used for and that everything was above board, put Ms Tiang through the wringer. He accused Ms Tiang of "changing (his) questions", when he felt she was not answering him directly, and told her that he did not "want to play games with (her)".

At one stage, he insinuated that, based on Ms Tiang's evidence so far, "if you don't talk to (members of Xtron's board, during her time as the audit engagement partner) at all, if you treat (CHC member) Serina Wee (who prepared Xtron's accounts) as a representative of the board, that's a horrible way to do an audit, don't you agree?"

His accusations drew multiple objections from Deputy Public Prosecutor Mavis Chionh, who said he should leave them for his submissions. Ms Chionh also implored the court: "If Mr Sreenivasan would allow the witness to answer, instead of interrupting her . . ."

Chief District Judge See Kee Oon then told Mr Sreenivasan: "Tell her perhaps more calmly. She can also answer calmly."

Theatrics aside, Mr Sreenivasan did succeed in having Ms Tiang testify that she was aware that CHC had used its Building Fund monies to buy the Xtron bonds and that this was in line with the church's constitution.

"As an auditor, you know that if (the Building Fund is) a restricted fund, any use must be for the purposes specified, am I right?" he asked.

"Correct," replied Ms Tiang.

"And you would have raised an alarm bell if it was for an unauthorised purpose, am I right?"

"Yes, I would."

"And you looked at the (church's) constitution yourself as well, right?"

"Yes."

"If the auditors knew that Xtron used the money for Sun Ho's music albums, and the board knows that the auditors know that, and the auditors don't raise any issue about it, do you agree the board can assume that the auditors have found nothing wrong with that?"

"Yes," she agreed.

Ms Tiang also testified that she was distancing her audit of CHC and Xtron from the actions of Baker Tilly TFW's former managing partner Foong Daw Ching.

Mr Foong had testified in the previous tranche of hearings last September, and is known for being the auditor who made a public video saying that no CHC funds were ever used in the promotion of Ms Ho's music career.

The prosecution sought to establish on Monday that Mr Foong had been aware of the concerns that the CHC members had about Xtron's ability to redeem its bonds, but that these had been kept from the audit engagement partner.

Kong, Tan, Chew and Wee, along with board member John Lam and finance manager Sharon Tan, stand accused of criminal breach of trust; Chew, Wee and the two Tans have also been charged with conspiring to falsify accounts.

The hearing continues.

Fraud trial puts Singapore megachurch in unholy spotlight (FT: 13 Jan 2014)

It is the perfect scandal for a part of the world better known for its worship of money and malls than spirituality: a pastor who allegedly siphoned off almost $40m from the Singapore megachurch that he founded with his wife to fund her pop-singing career in the US.

The case, back in court on Monday, has not only swung an unusual spotlight on Singapore, a normally staid corner of Asia, but carries echoes of how faith and fraud bedevil the church in other parts of the world.

Three months ago Pope Francis was forced to intervene after reports surfaced in Germany of “the bishop of bling” who spent €15,000 on a bathtub at a palatial new residence.

In Singapore, Kong Hee, 49, co-founder with his wife of the City Harvest church, has been accused along with five other church members by the attorney general’s chambers of embezzling more than S$50m ($39m) of church funds to finance his wife’s singing career.

Funds that were earmarked for a new church building were instead allegedly siphoned off into a fake bond scheme. Church accounts were then falsified to reflect that the bonds had been redeemed, it is alleged.

The government brought the case last year after an investigation starting in 2011, itself prompted by tip-offs the previous year from congregation members who suspected that funds had gone missing in 2007 and 2008.

Ho Yeow Sun, 43, Mr Kong’s wife, is a Mandarin-language singer who has achieved minor celebrity status in Singapore through chart-topping dance singles issued in the US. She is not charged with any offence.

Her eye-catching appearances in dance videos, including one called China Wine in which she gyrates semi-clad with Haitian-American rapper Wyclef Jean, have added spice to the case.

City Harvest says her singing work is part of a “crossover project” started by the church that aims to use music to spread the gospel. Ms Ho has sung at “high-octane concerts” in Taiwan, Malaysia and Australia, the church’s website says, where “close to 140,000 salvation decisions were recorded”.

The singer until recently owned three clothing boutiques in Singapore, including on Orchard Road, the city-state’s most fashionable thoroughfare with luxury outlets such as Mulberry and Tory Burch.

On Monday, a trial that began last year resumed amid intense public interest, with people queueing from the early hours to gain limited passes to sit in the court’s public gallery.

Mr Kong, who has pleaded not guilty, has told his congregation that “I maintain my integrity”, and continues to preach at City Harvest. The trial is expected to last until September.

City Harvest, with nearly 20,000 registered members, is one of a handful of megachurches in Singapore, where the dominant religion of Christianity is embraced largely by ethnic Chinese. The country is home to Malay muslims and Hindu-worshipping South Asians.

The average age of City Harvest’s members is 31 years, and consists of a mix of middle-class professionals such as bankers and architects, the church says.

Mathew Mathews, research fellow at the Lee Kuan Yew School of Public Policy at the National University of Singapore, said that middle class Singaporeans were attracted to megachurches because they could host large events involving well-known Christian celebrity speakers.

“The growth in Christianity has been greater among younger, better educated and English-speaking Singaporeans. Among this group the idea of being part of something big and which operates very professionally is appealing,” he said.

The phenomenon in Singapore is part of a wide Asian trend as ministries have expanded their followers – and fundraising – across borders. Mr Kong’s website describes him as founder of Kong Hee Ministries, which lists a mailing address at a post box in Dallas, Texas.

“As a church we believe that God’s doing something in Asia, and Singapore is pivotal as a location,” said Theresa Tan, City Harvest spokeswoman. “We are at a crossroads to various parts of Asia so we feel that God’s using Singapore in such a way.”

Use of building fund not breach of church’s constitution: Witness (CNA: 15 Jan 2014)

City Harvest Church’s subscription to Xtron bonds are authorised under agreement, says external auditor

 

 SINGAPORE — The external auditor of the City Harvest Church testified today (Jan 15) that there was no breach in the church’s constitution when the Building Fund was used in bond subscription.

Taking the stand for a third day, Ms Tiang Yii of Baker Tilly agreed with the defence that the church’s subscription to Xtron bonds was authorised. Xtron was the firm managing singer Sun Ho’s music career. It had a bond subscription agreement with the church to raise funds for Ho’s music.

Under the agreement, money from the church was used in the production of the singer’s albums. Ms Tiang agreed that “the use of the proceeds were in line with the stated objectives in the bond”, but the prosecution’s case is that Xtron was a financial vehicle used by church founder Kong Hee and five deputies, to channel the church’s Building Fund into Sun Ho’s career, through what they called “sham bond investments”.

Today, the court also heard that Ms Tiang’s colleague, Mr Foong Daw Ching, had been communicating with the accused on bond issues and the use of the Building Fund, but Ms Tiang said she was not aware. The defence’s point is that the accused had been seeking Mr Foong’s advice proactively, but this information was not shared with Ms Tiang and that he had failed in his duty.

Previously, Mr Foong testified that he had dispensed general advice to the accused in his personal capacity.

Another point made was that the accused John Lam was roped in to help with the discussion on the church’s accounts and its bond subscription with Xtron because of his educational qualifications. His lawyer, Mr Kenneth Tan, pointed out to Ms Tiang that Lam had studied accounting.

Sharp exchanges at trial of CHC leaders (CNA: 14 January 2014)

SINGAPORE: Sharp exchanges and multiple objections took place on Tuesday at the trial involving six leaders of the City Harvest Church.

The trial got off to a fiery start with the defence grilling the prosecution witness, who was on the stand for a second day.

During the cross-examination of the Baker Tilly auditor, it emerged that Ms Tiang Yii was aware that funds were used to further Ms Sun Ho's career from as early as 2001.

Ms Ho's husband and church founder Kong Hee, along with five deputies, is accused of misusing millions of church funds to boost her career.

As Xtron's auditor, Ms Tiang said that it was only in December 2007 that she was aware that the church's money, which was used to purchase Xtron bonds, was used for the production of Ms Ho's music albums.

"You were fully aware that the money that went by way of bonds into Xtron was used for the production of music albums of Sun Ho, spouse of Kong Hee?" asked defence lawyer N Sreenivasan.

"Yes, as at December 2007," Ms Tiang replied.

The defence pointed out that this was why Ms Tiang was not surprised to hear that the church was involved in Ms Ho's English album.

Ms Tiang agreed, adding that was when Serina Wee told her that "the church will be investing its Building Fund monies in the bonds".

"But from the Xtron perspective, when you were told that, in fact, the beneficial owner of the bonds is CHC, it didn't come as a surprise to you that CHC had some involvement with this album project, right?" asked defence lawyer Andre Maniam.

Ms Tiang replied: "Yes, when we were told by Serina Wee that CHC would be investing their Building Fund monies in the bonds."

At one point, the defence chided Ms Tiang as a "bad witness".

This drew the prosecution's rebuttal that the defence only said so because they did not get the answers they had wanted.

Earlier in the day, Mr Sreenivasan made the point that Ms Tiang's fellow auditor, Mr Foong Daw Ching, had information given by the church.

This was an email dated 21 July 2008 from accused Tan Ye Peng detailing the relationship between Xtron, CHC and AMAC Capital Partners.

Ms Tiang, who was Xtron's auditor then, said she was not aware of this.

Another point made by the defence was that Ms Tiang was not able to do her audit properly, if she did not communicate with Xtron's directors at all.

The defence grilled Ms Tiang on how she tried to distance herself from Mr Foong, who was also a prosecution witness who had testified in the second leg of the trial. 

City Harvest trial: Church funds used as early as in 2001 to fund Ho Yeow Sun's music career (ST: 14 January 2014)

City Harvest Church funds were already used as early as in 2001 to fund the secular pop music career of founder Kong Hee's wife Ho Yeow Sun, court documents showed on Tuesday.

An item in the church's 2001 audit indicated "cost of production - MTV". That audit was managed by Baker Tilly's Ms Tiang Yii, who continued on the stand for a second day as a prosecution witness in the ongoing trial against Kong and five others for varying counts of criminal breach of trust and falsifying accounts.

Ms Tiang was later the engagement partner for the church from January 2006 to June 2007, and for music production firm Xtron from January to December 2007.

Defence counsel Andre Maniam, who represents former church finance manager Serina Wee, argued that Ms Tiang's awareness of such investments meant it would not come as a surprise to her when told by Wee that the church had invested monies from their Building Fund in $13 million bond purchases in Xtron in 2007 and 2008.

However, in a heated cross-examination earlier by defence counsel N. Sreenivasan, who represents the church's deputy senior pastor Tan Ye Peng, Ms Tiang insisted that she had not raised any warnings or red flags because Wee had only told her "verbally", without any corresponding documentation for the church's 2008 financial year audit.

"We didn't have the information at the time; it was all preliminary information gathering," Ms Tiang said. "The agreement that we saw for Xtron's side did not say where the source of the City Harvest Church funds were from ... That's only verbal representation (for) which we have to seek corroborative evidence."

Mr Sreenivasan countered: "So if somebody tells you that $1 million has been stolen, as auditor you will wait for corroborative evidence before you do anything?



(blogger's note: i guess lying behind the pulpit is not a crime. cos pst rev dr kong stated unequivocably that no church funds were used for Sun Ho's career.)

City Harvest trial: 3rd leg begins (ST: 13 January 2014)

Witnesses from audit firm Baker Tilly to take stand

THE third leg of the high-profile City Harvest trial starts today as the prosecution continues to build its case against the church's founder, Kong Hee, and five of his deputies accused of misappropriating church funds.

The first prosecution witness set to take the stand is Ms Tiang Yii, an auditor from Baker Tilly, the church's external audit firm.

Other witnesses who are expected to appear in court include church trustee Tan Yew Meng and two other auditors from Baker Tilly. One of the two is Mr Sim Guan Seng, who had repeatedly raised concerns about money that had been channelled to one of the church-linked firms.

This leg of the trial will mainly feature evidence of witnesses from the audit firm, said a spokesman for the Attorney-General's Chambers.

The six church leaders are alleged to have funnelled $24 million meant for the church's new building into sham bond investments in church-linked firms Firna and Xtron Productions.

Church accounts were then reportedly falsified to the tune of $26.6 million so the bonds appeared to have been "redeemed", said prosecutors. This was allegedly done to finance the pop music career of Kong's wife, Ms Ho Yeow Sun.

A spokesman for the church said that the defence has yet to finalise its witness list.

The case will unfold in Court 1 of the Subordinate Courts. For each of the morning and afternoon sessions, 55 seat passes will be distributed to the public outside the courts from 7.15am on each day of the trial. The trial is expected to run until September.

The church has organised nightly prayer sessions at various locations, such as its Jurong West church building. Ms Teo Hsin Yi, a 40-year-old church member, said: "Whatever the situation, we will be standing with our leaders. Since the case started 31/2years ago, they have not stopped serving the church fervently and helping people."

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Background Story

The case so far
CHURCH founder Kong Hee and five of his deputies are accused of criminal breach of trust. They had allegedly funnelled $24 million of church funds into sham bond investments in church-linked companies Xtron Productions and Firna to bankroll the music career of Kong's pop-singer wife Ho Yeow Sun, and purportedly taken another $26 million to cover it up.

• First leg: May 15 to May 23, 2013

This began with prosecutors questioning church accountants. In one instance, prosecutors showed that two of the accused had unilaterally decided on the interest returns for a bond investment that was different from the original rate, resulting in one of the church's former assistant accountants having to "work backwards" for the accounts to tally.
Deputy Public Prosecutor Tan Kiat Pheng also pointed out that external auditor Sim Guan Seng had raised repeated concerns over the accounts. Prosecutors ended the trial highlighting discrepancies in Xtron documents. They tried to show that Xtron was not independent of the church and that its former director Koh Siow Ngea was merely doing the bidding of the accused.
But the defence said that if the church had directly funded the project, it might have "defeated the purpose" of the Crossover Project, which sought to evangelise via Ms Ho's secular music career, and so the church needed external companies to fund and manage her career.

• Second leg: Aug 26 to Sept 20, 2013

This opened with prosecutors painting a more detailed picture that Xtron and Firna were vehicles for the sham transactions. They also tried to show that Xtron director Choong Kar Weng and Firna owner Wahju Hanafi simply rubber-stamped deals.
But the defence sought to show that the transactions were legitimate and that the accused had acted "in good faith" on the advice of auditors and lawyers.
Other witnesses included two church trustees and Mr Foong Daw Ching, whose accounting firm Baker Tilly TFW audited the church.

美女被告 is back!

@STcom Serina Wee is the first defendant to arrive in court for the City Harvest trial, followed by Tan Ye Peng #cityharvest pic.twitter.com/tY3MKV13B2