The finance manager tells the court that the redemption of the Xtron and Firna bonds was done to resolve audit issues and not to “create appearances”.
Having spent the morning trying to establish that the ARLA was a sham, the prosecution this afternoon sought to show that the Special Opportunities Fund investment the church had made was likewise not a genuine investment.
Instead, the SOF monies from the church to investment firm AMAC Capital Partners and on to Ultimate Assets and thereafter to Firna, were “engineered solely to allow you all to round-trip church funds to create the appearance that the Firna bonds had been redeemed,” said deputy public prosecutor Mavis Chionh to CHC finance manager Sharon Tan.
To support her theory, the DPP presented an email thread in which Sharon Tan and co-defendants Serina Wee and Chew Eng Han were “monitoring” the flow of the SOF investment funds by giving details to Wahju Hanafi regarding the transfer of funds from his company Ultimate Assets.
“How can it be an arm’s length investment in UA by AMAC if, after the supposed investment, Wahju has to be instructed every step on the way on what to do with the money invested, when to pay, how to pay and whom to pay to?” asked the prosecutor.
Sharon Tan responded, “I didn’t know that to maintain arm’s length, I’m not able to monitor the transactions.”
She further explained that at the time, she understood that Chew had already spoken to Hanafi, who then gave his approval for the transactions. “And the reason this email was written for us to monitor and facilitate the transaction was because there were concerns that we are not able to meet the timeline before 31 October 2009,” said Sharon Tan. “The intention was to solve an audit issue, your Honour. That was why we wanted to monitor very closely, after Wahju has approved.”
The prosecution also showed emails in which Sharon Tan had said to Chew, “We are working backwards to also ensure that nothing is left in Firna accounts.” The prosecutor asked, “From the manner in which the supposed interest was supposed to be computed, Ms Tan, it’s clear, isn’t it, that the so-called investment … were not genuine investments? They were simply part of a series of round-tripping transactions whereby the church’s money was round-tripped back to the church to redeem the SOF investment, and because it was a series of round-tripping transactions of the church’s money, that’s why you had to make sure that none of that money would be left in Firna’s account when the transactions were completed. Do you agree?”
The finance manager disagreed. “Because this investment was made by CHC for AMAC to loan to UA and for UA to loan to Firna for Firna to redeem the bonds, and because the investment was made by CHC, that was why I was fixated on the amount that it must come back to CHC as an investment returns, your Honour.”
She added that there were variables involved “due to the number of days of the transaction.” As such, the amount was not yet confirmed when CHC decided to invest in the SOF.
Besides the alleged control of the SOF monies by the accused and the way in which the SOF interest rate was derived, the prosecution also sought to undermine Sharon Tan’s testimony about board approval being given for the SOF investment.
Pointing to the minutes of a board meeting on Oct 31, 2009, the DPP highlighted that there was nothing to indicate that the board had considered and approved the SOF investment, and even if approval had been given during that meeting, it only came after the SOF monies had been disbursed.
Sharon Tan clarified that, in essence, the SOF investment was done to achieve the same purpose of a redemption plan that the board members had approved previously, on Sep 12, 2009, albeit they only knew about the way it was eventually executed later on.
The defendant admitted that it was an oversight on her part and that she should have emailed the board for an urgent approval before disbursing the funds. At the same time, she took comfort in the fact that three board members, including co-accused Tan Ye Peng and John Lam had signed on the bank transfer forms for the disbursement of SOF monies.
Through evidence in the form of BlackBerry exchanges, the prosecutor also pointed out that with regards to the redemption plan, Sharon Tan was an “active participant in the planning process along with the others, and not a passive listener.”
In response, Sharon Tan said that on the contrary, it showed that she had “followed the instructions that was given by Eng Han and clearly it will show that my concern at that time was about the disclosure of the investment into UA.”
Sharon Tan maintained that the redemption plan was not done to create a false appearance that the bonds had been redeemed as the prosecution alleges; consistent with her testimony throughout the last few days, she said that the bonds were redeemed in order to resolve audit issues regarding disclosure, which had been previously raised by Baker Tilly auditor Sim Guan Seng.
Court resumes at 9.30am tomorrow.
中文报道 – 城市丰收审讯：陈绍云解释债券赎回计划旨在解决审计问题