Judge rules that Chew Eng Han’s COC statement cannot be used in Kong Hee’s cross-exam. Crossover team had followed auditor’s advice “not to paint a full picture” to members about Xtron.
Both prosecution and defense spent the first part of this morning in court arguing over whether a piece of evidence could be submitted by the prosecution.
The evidence in question is a statement that Chew Eng Han had voluntarily given to the Commissioner of Charity on October 8, 2010. Yesterday, Chew gave permission for the document to be used by the prosecution.
Deputy public prosecutor Christopher Ong told the court that Chew’s statement would be a test of accuracy of Kong’s evidence in court.
This was met with strong opposition from defense counsels, senior counsel N Sreenivasan and Edwin Tong.
Sreenivasan, the lawyer for Tan Ye Peng, asked Ong if this statement amounted to a “confession” of sorts. Twice, he invited the DPP to state the date this evidence was in their possession, but Ong failed to answer.
Tong, the lawyer for Kong Hee, reiterated a point earlier made by Sreenivasan, that the prosecution made the production order on June 12, 2014 after “the prosecution has closed its case, and after the recording of the IO has given his evidence, and after of the prosecution — all the prosecution witnesses have given their evidence and been cross-examined.”
Both defense counsels reminded the court that during the questioning of auditor Foong Daw Ching, the defence was not able to deploy any of the COC statements for the purposes of cross-examining prosecution witnesses.
In earlier tranches, the court had heard of the existence of a First Incident Report (FIR) and had asked the DPP to produce the FIR in court. The prosecution had resisted, leading Sreenivasan to suggest that there was no FIR or complainant, and that the COC report was the actual FIR. Furthermore, none of the witnesses called by the prosecution had pointed fingers at any of the accused.
Tong also put it to the court that “the only reason why the prosecution seek to rely on Mr Chew’s COC statement, when they have nine other statements, is obviously because the nine statements are inconsistent with the COC statement.” And since it is Chew’s statement and not Kong’s, Kong would not be in any position to explain Chew’s change in position in the COC statement.
Sreenivasan added that the prosecution cannot rely on Chew’s COC statement to test the accuracy against Kong’s evidence.
The court adjourned for a break for the judge to deliberate on the contents of the evidence. After the break, the judge ruled that this piece of evidence could not be used in the cross-examination of Kong. It may be revisited when Chew takes the stand.
Auditor’s Advice “Not To Paint A Full Picture” About Xtron
Ong continued his cross-examination of Kong by picking up a Aug 1, 2008 email discussion between Serina Wee, Chew and Tan detailing Wee’s meeting with auditor Foong Daw Ching. Wee said in her email that at that meeting, Foong advised the CHC team them “not to paint the picture that CHC has full control but only some control over XPL. If full control will invite consolidation.”
Foong had also advised Wee that when Xtron was mentioned to the executive members during Aug 10, 2008 extraordinary general meeting, to not minute down everything, only the necessary, so as not to show “too a close relationship or control” over Xtron.
During Foong’s examination in chief by the DPP on Sep 13, 2013, when the same email was shown to Foong, he had vehemently denied that he gave such seemingly improper advice.
Kong replied that he had no reason to believe that Wee would lie about what Foong had told her in his meeting with her. When the prosecution asked if he was saying Foong was wrong in his evidence, Kong admitted, with a degree of reluctance, that “in the course of the evidence by Mr Foong, I was greatly disappointed that he seems to be distancing himself and denying involvement or knowledge of a lot of the financial transactions that we sought advice from him for.”
Kong reiterated that he had no reason to doubt that Wee was being truthful in the email.
Ong instructed Kong to open up the email attachment which was a write-up from co-defendant Tan Ye Peng to auditor Foong Daw Ching detailing “four concerns” over the relationship between CHC and Xtron. Ong noted that there was nothing explicitly stated in the document to show the reason for Xtron’s incorporation was to distance the financing of Ho’s music albums from the church. The DPP suggested that Kong was seeking to hide the fact that he was controlling Xtron as a vehicle to finance Sun Ho’s music career.
Kong said he could not understand the logic in the DPP’s suggestion because the write-up clearly outlined the investments, and the structure of the investments was spelled out explicitly for Foong, and he had had no issue with it.
Why The $13m Bond Was Not Disclosed To Executive Members
Ong noted in the 2008 EOGM minutes that Kong had told the executive members that Xtron protected CHC’s interests as it knew the needs of the church. Naturally, the church would want Xtron to succeed as CHC needed Xtron’s help. Ong then asked Kong why the executive members had not been told of the reason to separate the management of Ho from the church.
Kong conceded that there were inaccuracies in what was said at the EOGM. He outlined that there were three phases that Xtron had gone through:
Phase 1 – artist management for Ho
Phase 2 – events management (from 2006 onwards)
Phase 3 – property management (from 2008 onwards)
Kong said that the 2008 EOGM script had been written when Xtron was in the phase of property management—a fact overlooked by the scriptwriter of the message, who, Kong said, could have been Tan, Wee, or another staff member. Kong added that what was important was that lawyer Jimmy Yim had vetted the script.
Ong questioned Kong as to why the $13 million bond purchase was not made known to the executive members and suggested that Kong had carefully crafted the script to avoid revealing that Xtron was used to manage Ho and using the bonds proceeds for the music albums.
Kong disagreed on two counts. First, he acknowledged that CHC had some control over Xtron but not full control, and that he was not aware nor had anyone mentioned to him of any legal obligation to disclose the $13 million bond subscription to the members. Kong noted that till today, no one has told him if was he legally obligated at that point to do so.
Second, Kong disagreed that Xtron was a vehicle to fund Ho’s music career with monies from the church. The fund manager and the investment committee had been given the mandate by the church’s management board, to invest in Xtron to yield higher returns, and this was done with the advice from lawyers and auditor. And no one had at any point said that anything was wrong.
Kong maintained that he did not deny that he preferred not to share that CHC was investing in Xtron bonds, or that Xtron was using the bond proceeds to finance the American album. However, if legally, he had to disclose this fact, he would have done so.
Kong gave two reasons for this: first, he wanted to protect the church members from information that could go out into the public domain, incurring unnecessary issues akin to the Roland Poon incident. The second reason was that he wanted to protect the mission of the Crossover, which was to reach the unchurched.
Kong said that even if he had told the members, he believed that they would have gladly supported the funding of the Crossover directly, as seen in the annual general meeting on Mar 28, 2010 and Aug 1, 2010, after investigations began.
Court hearing resumed at 2.15pm.
The “Ghost Director” And The “Invisible” Man
Xtron’s management structure was in the spotlight this morning when DPP Ong brought up the name “Suraj”.
The court heard that Suraj, who became a member of CHC in the early 1990s, was a board member and the chief operations officer of CHC. An email dated April 23, 2008 showed that Suraj was appointed as “unofficial General Manager of Xtron”. Ong asked Kong as to why a CHC staff was being appointed as a general manager of Xtron. Kong replied that Suraj, being the best friend of Xtron director Choong Kar Weng, had been approached by Choong to help out in Xtron.
In another document containing minutes of an Xtron meeting of Oct 22, 2008, the court saw the management structure of Xtron which listed Suraj as “ghost director” and Kong as “invisible”.
When queried about these terms, Kong replied that he was not a party to the meeting, but he did recall discussing with Tan if Suraj should quit CHC and go to Xtron. Kong explained that Suraj was a staff member of CHC who had been seconded to Xtron to mentor the Xtron staff who used to be Suraj’s staff in CHC. Kong replied to Tan that he needed Suraj to remain in CHC and stay within the boundaries of CHC. The solution proposed by Serina Wee was to keep Suraj as a CHC staff member but to have him involved in the management of Xtron—not an uncommon practice.
As for his “invisible” role, Kong explained that “very often in our church, I’m like the invisible patrons of many of the organisations because of their love and honour for me as their pastor.”