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CITY HARVEST TRIAL: Accused firm was independent of church, says lawyer
Publication Date : 28-08-2013
A firm accused of helping the City Harvest Church in Singapore to misuse church funds was an independent entity, and church leaders did not have final say over its decisions, a defence lawyer said on Wednesday.
The church funds was allegedly funnelled through two companies, music firm Xtron and glassware manufacturer Firna, and the state has been making the case that Xtron was nothing more than a puppet for the accused church leaders.
City Harvest founder Kong Hee and five of his deputies were charged last year with misusing church funds to bankroll the music career of Kong's pop-singer wife Ho Yeow Sun. They allegedly took S$24 million (US$18.7 million) at first, and then purportedly used another S$26 million (US$20.3 million) to cover up the first amount.
The prosecution believes this was done through sham bonds issued by the two firms which the church invested in, and has been trying to prove that Xtron was nothing but a puppet company doing the church's bidding. Xtron, however, has maintained it was independent and financially viable.
Kenneth Tan, lawyer for John Lam Leng Hung, one of the accused, however said that Xtron was never listed on the church's financial reports. "When the church wants to control a company... they openly put in their accounts," he said, referring to Attributes, a church-linked company which was listed in the reports.
Tan added that even though there were emails between the accused church leaders discussing various Xtron plans, these proposals would have to be approved by Xtron directors who were not legally bound to follow the church's wishes.
The state, however, has produced emails between the accused suggesting that at least one Xtron director would follow their wishes.
In an email in July 2008, Chew Eng Han wrote to Xtron accountant Serina Wee and Tan Ye Peng - all of whom are accused of the misuse of church funds - that they could tell the church's members that "through the placing of (Koh) Siow Ngea on the board of Xtron, CHC (City Harvest Church) has assurance that Xtron's activities and running will very much be in line with the vision of what CHC wants to achieve in the marketplace".
More than US$8m spent on Ho's music album
More than US$8 million was spent on the album that was supposed to launch pop singer Ho Yeow Sun's career in America - including production fees for rapper Wyclef Jean.
The sum emerged in court yesterday as part of minutes from a board meeting of production house Xtron, one of the firms City Harvest Church leaders allegedly used to misappropriate church funds.
The minutes listed expenses for Ho's English-language album, including more than $1.6 million in production fees for American musician Jean and more than $1 million for a music video.
The minutes from 24 Nov 2007, were among dozens of documents tendered in court on Tuesday, August 27.
They showed that Xtron directors Wahju Hanafi and Choong Kar Weng approved an additional budget of $2 million to produce Ho's album "in order to get some popular song artistes and singers from USA to be involved in the album".
The directors expected that between two and three million copies would be sold.
But while Ho's singles - such as her China Wine collaboration with Jean - were produced, the album was never released.
Xtron also paid for Ho's travel expenses, noting that she would continue to fly business class for her official journeys as she had a "very busy promotional schedule".
The minutes said that about $200,000 in waived royalties for three of Ho's albums in 2003, 2004 and 2006 was used to build schools in China.
Kong 'had concerns' about bonds and transactions
Kong was once worried about the legality of bonds the church had purchased.
Prosecution witness and Xtron Productions director Choong Kar Weng told the court this on Tuesday, after prosecutors produced an e-mail he had sent Kong, and questioned him over it.
"At the end of March 2010, I received a phone call from Pastor Kong saying he's concerned with all the bonds and all the transactions. So he asked me to check and see whether things were OK," said Choong.
Choong, the first witness in the second tranche of the high-profile criminal trial, said he dug up more information about the church's dealings after the phone call.
He then wrote the e-mail to Kong on 31 March 2010, saying that in the worst case, the authorities could view the parties involved in the Xtron bonds - City Harvest,
Xtron and AMAC Capital Partners, the church's investment manager - as related, and he discussed the possibility of the transactions becoming criminal breach of trust.
"Selling bonds to raise money is not uncommon in business... However, given the close proximity between Xtron and CHC, some people will draw the inference that Xtron is financing (Ho's) albums," he added.
They can get around that problem by saying there was a sponsor for the albums, and Xtron was simply appointed to produce the albums, said Choong in his e-mail to Kong.
"This may still be a ground for suspicion but it is very difficult to prove. So legally, I am convinced we are OK here."