Kong Hee revealed co-defendant Chew’s position as a member of the church who had fallen upon bad times, and his role as the one structuring the Xtron bonds.
This morning, deputy public prosecutor Christopher Ong showed the court Chew Eng Han’s statement to the Commercial Affairs Department which showed him explaining the real function of the Xtron bonds was to raise funds for the Crossover Project. He had also told the CAD the bonds were not actual investments.
When asked by the prosecutor if Chew was trying to deceive the CAD, Kong Hee told the court that he did not feel it was the case. To Xtron, the bonds were meant to raise funds for the Crossover Project, he said. To City Harvest Church, the bonds were an actual investment that yielded higher returns than other vehicles.
The DPP also sought to show that Chew’s investment company AMAC was a tool for the accused to “channel funds” into the Crossover Project. Kong had announced to executive members of the church at a July 2007 extraordinary general meeting that the church had sourced for other fund managers before deciding on AMAC because it could provide confidentiality and flexibility and that Chew had spoken to its directors and board and was able to offer a low fee. However, the DPP pointed out that AMAC had only one director—Chew. Kong explained he had just arrived in Singapore from overseas, and had read out the script prepared by his team.
Kong explained that AMAC was a legitimate company—not a tool of the church. The idea of the bonds came from Chew via AMAC, not from the church. Also, there were contracts to show that AMAC had signed with CHC as its fund manager. Ong maintained that no other fund manager had been explored for the church.
The court was shown a November 2008 email in which Kong and co-defendant Tan Ye Peng discussed their concerns for Chew after he resigned the bank he was working for to set up AMAC, an investment company. Chew had fallen upon hard times and in the email, Kong said “we owe Eng Han his livelihood”. Kong and Tan discussed refunding Chew $100,000 of his donations to the church, paying him a $10,000 retainer for his services in helping with the church’s investments, and even offering Chew’s wife a job in the church for a salary of $5,000.
Ong questioned Kong as to why would he owe Chew “his livelihood”. Kong told the court that Chew had worked hard as a volunteer for the church, helping the church to invest and looking for the church’s new building, and all these suggestions were made out of concern for Chew as he was a church member.
More Questions On Disclosure To Professionals
Kong had in his earlier evidence referred to three emails to show that he and co-accused had every intention of giving full disclosure to the auditors and lawyers, Ong sought to refute Kong’s claims by pointing out that none of the emails showed discussion or board approval for the first Xtron bond subscription.
The prosecutor submitted to Kong that he and the co-accused were driven to consult the auditors because they were concerned about the disclosure of the first BSA which they planned to subsume using the amended bonds subscription.
Kong told the court that consultation with the auditors were driven by two concerns: firstly, the realization that there was a two-year redemption term limit on the bonds; and secondly, the Renci saga.
The “Junk Bonds” Issue
An email between John Lam and Chew Eng Han showed that Lam had raised concerns to Chew regarding the Xtron bonds being non-investment grade bonds, or high risk bonds. Ong asked Kong if he knew at that time if the bonds were high risk. Kong replied that he only knew this after investigations had begun, when the church’s lawyer then, Jimmy Yim told Kong that the Xtron bonds could be considered as “junk bonds”. A junk bond is a bond that yields high profits but carries high risk. Kong admitted to the court that at that point in 2010, he believed “junk bonds” were a bad thing.
Why then did Kong say that the lawyers were consulted on the Xtron bonds in 2007 if it was only after investigations in 2010 was carried out that Yim highlighted this to Kong? Kong revealed that it was Yim and his team of lawyers that drafted the bond subscription agreement. The pastor said that these were top lawyers, and he was sure that they would have done their due diligence.
Court resumed at 2.30pm.
中文报道 – 城市丰收审讯：周英汉角色为今日盘问焦点