Court proceedings resumed today with the prosecution’s cross-examination of former church fund manager Chew Eng Han, who maintains the legality of the bonds he constructed and the auditors’ knowledge of it.
Today, as the trial of CHC’s key leaders resumed, the court heard from Chew why the artist management rights for Sun Ho had been transferred from Xtron to Ultimate Assets, owned by Firna director Wahju Hanafi.
The Crossover Project needed more funding; if the church had bought more bonds from Xtron, disclosure of CHC’s transactions with Xtron would become necessary. This was what then-managing partner of audit firm Baker Tilly, Foong Daw Ching, had said.
Chew then proposed for the church to buy bonds from Firna instead. This way, the Crossover Project could be financed further while avoiding disclosure on the accounting books, as Ho would not be a “key player” as far as Firna was concerned, unlike at Xtron.
Chew agreed with the prosecution that the underlying motivation for this transfer was to avoid disclosure of the usage of building funds to finance the Crossover Project.
However, he disagreed that this was done so as to prevent scrutiny into the sham nature of the bond investment by the auditors. as claimed by deputy public prosecutor Christopher Ong.
He also disagreed with the prosecutor’s claim that he conspired with the other co-accused to actively conceal the true nature of the church’s bond investments from the church’s board members.
Chew explained that in fact, a board resolution had been drafted by Rajah & Tann lawyer Christina Ng, documenting the underlying purpose of the bonds.
Chew also testified that auditor Foong Daw Ching had lied on the stand when he told the court he did not know anything about CHC’s Firna bonds.
Chew was responding to accusations from the prosecution that Foong had not been informed about the true purpose of the bonds, and that Chew had never consulted Foong prior to entering into the Firna bonds.
The prosecution also reiterated its stand that the Firna bonds were never genuine, and that there was never a real obligation on the part of Firna to repay the church.
In this morning’s proceedings, the prosecution challenged Chew on the real motivation behind the amended bonds.
Chew explained to the court that his original idea was for CHC to pay Xtron seven years of advance rental, and Xtron would then use that to purchase the Riverwalk property. But because Xtron’s director Choong Kar Weng objected to this idea, Chew suggested having Xtron issue more bonds to CHC. The prosecution, however, argued that only S$5 million out of the amended bonds would be used for the building and Xtron would still need to take a bank loan for Riverwalk.
Moreover, a piece of email evidence showed that Chew had said the amended bonds were also meant to solve Xtron’s cashflow deficits. The prosecution suggested that the motivation behind the amended bonds was really to solve Xtron’s cashflow issues and to allow Xtron to continue financing the Crossover Project.
Chew disagreed with this, stating that there was the purchase of Riverwalk was a genuine investment. CHC had been renting Riverwalk for some time before the landlord asked for an increase rental. Chew felt that it would be more profitable to buy the property instead. The plan was thus for Xtron to purchase Riverwalk and charge the same rental as before; Xtron would then earn from rental profit.
The prosecution moved on to ask why the executive members were not informed about the bank loan that Xtron had to take in order to purchase Riverwalk? Chew explained that firstly, the bank loan was not confirmed at the time of the annual general meeting. Secondly, if the bank loan was revealed to the executive members, then the team would need to explain that the first S$13 million Xtron bonds had been subsumed in the amended bonds. They preferred not to in order to maintain discretion about the funding of the Crossover Project.
The prosecution then produced several board meeting minutes to show that the board was also not told about the bank loan. Chew maintained that the board knew about the bank loan and there was no reason to hide it from them.
The DPP then suggested that Chew and his co-defendants had deceived the church’s board and executive members by telling them that $18m had been used for the purchase of a Riverwalk unit, when in actual fact, the first S$13 million had been subsumed within this amended bonds.
Chew disagreed, reiterating that since 2007, lawyer Christina Ng had set the strategy for limited disclosure in order to protect the Crossover Project.
Cross-examination of Chew Eng Han resumes tomorrow at 9.30am.
中文报道 – CHC审讯：周英汉表明，冯道清出庭作证不诚实