Deputy public prosecutor Christopher Ong revisited documents relevant to the Xtron and Firna bonds in his examination-in-chief of Sim Guan Seng.
Baker Tilly auditor Sim Guan Seng’s name came up in the first and second tranches of the City Harvest Church trial, and witnesses were asked about documents and emails that involved him.
So his appearance in court as the 12th prosecution witness was a highly anticipated one by those following the trial closely. This afternoon, deputy public prosecutor Christopher Ong took Sim through those very documents that had previously surfaced in court.
Ong focused first on the authenticity of both the Xtron and Firna bonds. One familar exhibit was the “comfort letter” which stated a convertibility feature that gave CHC the option to convert the Firna bonds into shares at a nominal value of US$1.
Asked about the significance this letter would have had to his audit treatment of the Firna bonds, Sim explained that he would have sought clarification from CHC about its purpose as well as the intention behind it.
This was the same letter which was shown to Wahju Hanafi when he took the stand in September last year; Hanafi had expressly testified in court that he would never buy back the shares at US$1 from the church (thus causing CHC to lose millions of dollars), and that this letter was at no point a factor of consideration leading up to the signing of the bonds. The court later saw that this “comfort letter” was never exercised. (See story here)
Sim was also shown an email dated July 2007 in which defendant Serina Wee informed Tan Ye Peng and Chew Eng Han that the sales of the music album would only come up to US$2.7m—not enough to pay for the S$13m Xtron bonds.
Ong asked what difference it would have made to his treatment of the Xtron bonds had he been aware of that exchange, to which Sim replied that he would ask the church board why it would still want to subscribe to the bonds.
The court had seen in the previous tranche during Wahju Hanafi’s testimony that the U$2.17mil was, in fact, a conservative estimate which was calculated before detailed projections done with input from on-the-ground music production professionals from the US yielded a much more profitable figure. Hence, recoverability was not an issue after all. (See story here)
In yet another email in which Hanafi was asking both Wee and Chew Eng Han about the interest costs of the Firna bonds, Sim conjectured that the phrase “Firna is only helping to pass through the money” would have given him the impression that the bonds may not be used for Firna’s purposes but for something else.
This topic was explored previously in the last tranche whereby Hanafi had explained that Wee was merely helping him keep track of his accounts.
The prosecution will continue its examination-in-chief of Sim tomorrow morning at 9.30.