Firna Bonds Subscription Agreement was meant to be a win-win situation for the church.
The prosecution’s seventh witness, Wahju Hanafi, told the court today how the bonds that First National Glassware had issued to City Harvest Church through AMAC Capital Partners Pte Ltd had come about. He said that as a company, Firna could have borrowed from a bank that would charge 7 to 8 percent in interest. By issuing bonds to CHC, Firna could have its loan and the church could earn the interest, and that would be a win-win situation. According to Hanafi, the value of Firna was worth much more than the bond amount, but his interest was in giving back the interest to the church. The court heard that the amount of the bonds was the equivalent of S$11 million.
Deputy Public Prosecutor Tan Kiat Pheng asked Hanafi who had control over when to draw down on the bonds, and how much to draw down, referencing emails between defendants Chew Eng Han and Serina Wee.
The court heard that Ultimate Assets was a British Virgin Islands company started by Hanafi for the purposes of financing Firna. After he had shifted the funds to a Singapore company for tax purposes, he had initially decided to close down UA. At that time, Hanafi was expecting some excess funds from Papua New Guinea which he could use for the Crossover Project. He had already stepped down from Xtron as a director by then, and accordingly, he decided to finance the Crossover project through UA.
It was revealed in court that on Aug. 19, 2008, Ultimate Assets became Ho Yeow Sun’s artiste management company and collaborated with JH Music Inc to manage Ho in the US. JH Music is owned by Justin Herz, Ho’s US manager. Hanafi said he chose to manage Ho using Ultimate Assets so that he could maintain full control over funds used for the Crossover Project.
The DPP brought up an email thread involving Chew, Wee and co-defendant Tan Ye Peng, with the attachment of a “secret letter.” The email thread showed that Hanafi’s father-in-law was reluctant to sign the Bond Subscription Agreement containing the convertibility feature. The convertibility feature allowed the bonds issued under the BSA to be converted to shares in Firna amounting to 40 percent of Firna’s issued share capital, in the event CHC could not redeem the bonds for cash. In the email, Chew asked Wee to send a letter to Hanafi for him and his father-in-law to sign agreeing to the BSA. The contents of the letter stated that in the event that the bonds were to be converted to shares, CHC would sell the shares back to Firna at a nominal value of US$1.
Court resumed at 2.15 pm.