The relationship between CHC and Xtron took centerstage this afternoon, with the prosecution alleging that the accused withheld information from the auditors, and Kong Hee emphasizing the complete opposite: that auditor Foong Daw Ching knew everything.
That there are two completely different sides to the story in the City Harvest trial could not have been more apparent than at this afternoon’s court session.
It has been the prosecution’s claim that in executing the purportedly “sham” bonds, the six accused had deceived the church’s auditors, withholding from them information about the true relationship between Xtron and CHC, among other matters.
This afternoon, the prosecution showed the court an email in which several of the accused seemed to be “discussing what picture they want to present to the auditors and to the members at the AGM in order to ensure that they are able to avoid a situation where Xtron’s accounts are consolidated with CHC’s.”
Asked for his understanding of that exchange by deputy public prosecutor Christopher Ong, Kong Hee—on his ninth day on the stand—explained that the follow-up email to that exchange would have shown the exact opposite: in it, auditor Foong Daw Ching advised the CHC parties not to state that the church had “full control,” but “some control” over Xtron.
As such, the auditor would have known about the relationship between Xtron and CHC; if the DPP was trying to say that the accused were trying to deceive Foong, said Kong, he would disagree. When Kong requested if he could open the exhibit to illustrate his point, the prosecutor refused.
Ong then tried to use an analogy to point out that the auditors’ assessment was only as good as the information they had been fed by their clients.
“Witness, if you tell your lawyer, Mr Tong, that you have not killed anybody, would you expect him to tell you that you have not committed murder?”
Kong replied, “Your Honour, I think this is a case that is quite the opposite. I think, if we read the email of Brother Foong’s reply, it would be more like this in his analogy. It would be me telling my lawyer, Mr Tong, that I have killed somebody and Mr Tong said, ‘No, you have not killed him, that man’s still alive.’”
The prosecutor pressed on: why would the accused have needed Foong’s assessment of a factual situation when “Ye Peng, Serina, Eng Han, yourself or CHC actually have full control of Xtron?”
Ong then put it to Kong that in order for the church’s auditors to join the dots together, they would have to rely ultimately on what Kong and his team would tell them about the significance of the dots.
Kong disagreed, explaining that “the whole purpose of Brother Foong in wanting to audit the church and all the CHC-linked entities, was precisely because he wanted to ensure that everything was done properly and above board … they have visibility and they are the experts, they’re the professionals. They should be able to advise us whether our assessments or our views were correct or not.”
Kong reminded the court that the accused did not go to various professionals, but instead went to one, so that if there were any related party transactions, “if things are not independent and not arm’s length, he will be able to advise us to consolidate our accounts.”
Indeed, Foong had, in 2008, pointed out that there will be related party transaction disclosure if things did not change, said Kong; the church’s auditors were, in fact, aware of the consequences of the situation going forward.
Kong himself admitted, “In the course of this proceedings, I realise the words ‘independent’ and ‘arm’s length,’ they are really technical, legal terms. But if I go back in time to 2007 to 2008, to me ‘independent’ or ‘arm’s length’ simply means they’re two separate entities doing different things with different boards, where both boards were able to say ‘okay’ or ‘not okay’. Perhaps it’s too simplistic a view, but that was my mindset in 2007 and 2008. Right now, as I sit here on the stand, I, myself, am not sure how to define ‘independence’ and ‘arm’s length.’”
Court resumes at 9:30am tomorrow.
中文报道 – 城市丰收审讯：审计师知道多少，另加一桩假设性谋杀