Foong Daw Ching admits that Baker Tilly auditors found nothing wrong with the Xtron bonds except for the issue of impairment.
Last week, he had testified in examination-in-chief that it was safe to say he was not the one advising CHC on the first Xtron bond subscription agreement.
However, he admitted to senior counsel Kenneth Tan this afternoon that a phone conversation took place between him and John Lam in June 2008 regarding specific issues of with regards to CHC’s investment into Xtron bonds.
This exchange surfaced after it was established that it was Foong himself who had recommended the drafting of an investment policy before the purchase of bonds, which Lam eventually drafted and presented to CHC’s finance committee. In the conversation, Foong had advised Lam that no consolidation was needed as the Xtron bonds were straight-forward, and that the main concern was ensuring that the bond issuer would not default on the bonds.
Most pertinently, the court heard from Foong that the Baker Tilly auditors did not raise any red flags about wrongful or “sham” investments when auditing both the accounts of CHC and Xtron, as the prosecution is alleging about the bonds.
In fact, Foong admitted that as recently as December 2012, he had told Tan Ye Peng that he did not see anything wrong with the fact that Xtron, a company that CHC had invested in, had used the bond proceeds for the Crossover Project.