The finance manager’s reason for backdating of minutes was to solve a problem, not to deceive. The court also saw the board’s approval of a plan to buy Riverwalk through Xtron.
It is the prosecution’s case that in order to hide the sham nature of the Xtron and Firna bonds, the accused parties tampered with document dates, among other things, to deceive the church’s auditors.
When co-accused John Lam was on the stand several months ago, he had been asked why he signed off on the minutes of a CHC investment committee meeting when it had been wrongly dated Jul 29, 2008 instead of Aug 5, the actual date on which the meeting took place.
It has been suggested by the prosecution that this was done to falsely show that due diligence to protect the church’s interests had been carried out and recoverability of the bonds had been assessed in July 2008, before the auditors raised the issue on Aug 1, 2008. The prosecution’s position is that the accused did not actually care if the church was going to recoup its investments.
Confronted with the accusation, Lam had said that it was a “mistake,” but today the court heard from finance manager Sharon Tan the real reason for the backdating.
Various emails presented by senior counsel Kannan Ramesh established that his client was trying to avoid the need for disclosure of related party transactions between CHC and Xtron—not trying to deceive CHC’s auditors.
Tan explained to the court that after the CHC investment committee meeting on Aug 5, she discovered that Koh Siow Ngea, who was present at the meeting, had been officially appointed director of Xtron several days ago, on Jul 29.
The problem was that Koh’s attendance as an Xtron director at the meeting could have given rise to related party transactions, as the agenda of the meeting included various financial dealings between the church with Xtron. This would then lead to disclosure obligations of the relationship between CHC and Xtron, a legal safeguard to prevent conflict of interests between two companies.
With an extraordinary general meeting looming on Aug 10, Tan felt pressed for time to iron out issues and eventually backdated the minutes.
Why such a pressing need to avoid disclosure of CHC’s relationship with Xtron as related parties, that Tan felt she had to backdate the document?
The reason was that Xtron had to maintain a completely secular identity, the court heard today. At that particular time, the church was trying to obtain a commercial property to house its rapidly growing congregation. Properties earmarked for religious use were not big enough, Tan explained.
However, given its status as a religious organization, the church found it challenging to enter into negotiations with landlords. Thus, the decision was made to use Xtron as a “vehicle” to front CHC’s property search.
As Tan recalled from the EGM, Kong Hee had emphasized to the executive members that Xtron was to be an independent, commercially viable company that dealt with CHC at arm’s length. The property search was a very important project for the church—should Xtron be seen as a related party to the church, it could jeopardize future property negotiations.
As such, Kong reminded the members to “be discreet” about the relationship between CHC and Xtron, according to Tan.
The court also heard again today that the CHC board had discussed and approved the plan for Xtron to buy Riverwalk, and that part of the purchase price would be funded through a bank loan.
Court resumes at 9:30am tomorrow.
中文报道 – 城市丰收审讯：陈绍云透露回溯会议记录日期的原因