CHC’s retainer of Xtron is given clarity at re-examination this afternoon, as senior counsel Kannan Ramesh sets about unpicking the prosecution’s tangled web of accusations.
In the final session in court this afternoon, Sharon Tan’s defense lawyer senior counsel Kannan Ramesh sought to challenge the first of a number of points that the prosecution had raised in its five-day cross examination.
Just this morning, the prosecution stated that its position was that the retainer fees CHC paid to Xtron was just a convenient “cover story” to pump church monies into Xtron. The prosecution holds that Xtron was just a shell company used to channel CHC’s building funds to fund the Crossover Project.
The court heard this morning that by Nov 2009, Xtron’s deficit—assuming zero sales of the US album—was $52.4m. In an email discussing the “strategy” to help Xtron clear this deficit appeared to be the increasing of retainer fees to Xtron from CHC. The existing retainer fee CHC was paying up to that point was $1.8m a year.
From the prosecutor’s line of questioning, it appeared that CHC was going to pay an additional $2m to Xtron. The prosecutor then alleged that this increase was purely planned for the purpose of funneling church funds into Xtron to pay off its deficit.
Through Ramesh’s questioning, however, it quickly became clear that the increase in retainer had been a genuine concern on the part of Xtron for a number of years. The court saw a chronology of events through email documents, starting with a proposal from Xtron to increase its retainer by $700,000 for the coming year of 2009, due to an increase in hours expended to service its contractual obligations to CHC.
Discussions had then ensued between Tan and co-accused Tan Ye Peng; apparently, the increase would “blow” the church’s budget, which was already in a “very tight position.”
In between, the head of departments for CHC’s operations as well as audio, visual and lighting units were also roped into the negotiations.
Given the tight financial constraints the church was facing, the retainer fees were then negotiated down to $400K. Ultimately, the retainer fees were revised to approximately $1.8m, which Kannan noted was even lower than the 2007 retainer rates CHC had paid. As such, far from liberally pumping money into Xtron, Kannan sought to establish that his client, along with her co-accused, had been mindful to ensure that fees paid to Xtron were reasonable and justifiable, without compromising the services rendered. The court also saw that the proposed increase in retainer had to be vetted and approved by the church board.
In response to her lawyer’s questioning, Tan testified that the retainer fees paid were “real” and “legitimate” payments for services that were very much required for the running of CHC’s events. The projection of an additional $2m per year for Xtron had been made with consideration given to the fact that Xtron’s work for CHC at its new premises at Suntec would be much more. Sharon Tan had told the court this morning that “The hall size will be increased by another 4,500 square metres, and another gallery and ten rooms, your Honour. So what I’m saying, that the services that will be provided by Xtron will increase by a lot. So for this projection of 2 million increase is, in fact, a conservative and a reasonable one.”
Earlier in the day, the prosecutor had continued to hammer on over points such as Sharon Tan and her co-defendant Serina Wee asking to meet with Chew Eng Han to discuss the round-tripping charges, which Sharon Tan explained was an effort to freshen her memory as it had been two years since the investigations began. The prosecutor also queried her about the seeming discrepancy between the plan to pay rental of $7m for eight years and Chew’s later assumption of $10m for 10 years. Sharon Tan explained that $7m for eight years was based on another building—the former Capitol Building—that the church was considering, while $10m over 10 years was the projection for Suntec.
On a separate topic today, the court received an update on senior counsel N Sreenivasan’s application last week for the first report that sparked off the CAD investigation, which the CAD had referred to in its press release. The DPP told the court today that the Commissioner of Charities had provided the document, and both prosecution and Sreenivasan agreed that the judge look at the document first to decide on it.
The DPP told the court that she was going to let the judge “have sight” of the document because she did not “wish to waste any more time arguing about this.”. She added that “it is our position that, looking at the documents, they are not Kadar-disclosable, and they also are not necessary or desirable for the purposes of the trial…”
The judge interjected, “Well, I’ve already ruled on the latter point.” He had already ruled on Sep 22 that “the report itself to the CAD, on the prima facie basis, at least, appears to be relevant to these proceedings. And if that is the case, then it is not a long stretch for Mr Sreeni then to contend that it is either necessary or desirable for the document to be produced.”
Parties will meet in chambers tomorrow at 9.15am and the hearing will continue from 9.30am.
中文报道 – 城市丰收审讯：辩方进行再问询结束今日庭讯