While the prosecution sought to prove that it was Tan Ye Peng and his co-defendants’ idea to get the bonds off City Harvest Church’s books, Tan testified today that they did it because of their impression that auditor Sim Guan Seng preferred the bonds gone.
In the prosecution’s continued attempt to show that Wahju Hanafi had no control over the Firna bond proceeds—a position contrary to Hanafi’s own evidence on the stand as prosecution witness—the court saw documents showing Hanafi taking advice from the accused on making bank transfers in various instances.
Why did Hanafi have to ask Serina Wee before transferring money out, if it really belonged to him? the prosecutor asked.
Tan explained that Hanafi did not know the payment schedule as required by US music producer Justin Herz; Wee was merely conveying information Kong Hee had received from Herz. Furthermore, Hanafi had already approved the overall budget for the music album production earlier, said Tan.
The prosecutor proceeded to raise various emails involving Hanafi—some of which were not put to Hanafi when he was on the stand, objected Tan’s counsel N Sreenivasan SC.
The prosecution theorised that the accused passed building funds to Firna and Hanafi, only to take control of the flow of funds so it could be channeled into the Crossover Project.
The prosecution highlighted that Wee had used the words “money owed to us” when talking to Tan about the part of the bond money Hanafi had used for his personal needs.
Tan sought to explain to the court the context of this piece of correspondence. There was an understanding among the parties that Hanafi would undertake to finance the Crossover Project with part of the Firna bond proceeds.
Hence, when Hanafi took some of the bond money for his own needs, Wee, in helping to keep track of the allocation of funds, wanted to ensure that the money originally earmarked for the Crossover Project would be returned. The word “owe” appeared to be her manner of speaking, and was not meant in the legal sense, Tan explained to the court.
In the afternoon, the prosecution raised Tan’s meeting with Baker Tilly’s auditor Sim Guan Seng on Apr 9, 2009.
The prosecution attempted to establish that, at that meeting, Sim was not told that out of the $21.5m amended Xtron bonds, $13m was used to subsume the first Xtron bonds. To support her claim, the prosecutor pointed out that the meeting minutes only recorded John Lam saying that $21.5m had been drawn down by October 2008, and there was no mention of the $13m.
Tan responded that Sim and he had discussed the bank loan taken by Xtron for the Riverwalk purchase, and added that Sim audited both CHC and Xtron accounts so he would have been able to see that $13m had already been used for Crossover Project.
When the prosecutor brought up evidence from Sim and finance manager Sharon Tan, Tan explained that Sim was not told in that meeting because he thought Sim already knew.
The court had heard in the course of the proceedings that the reason why the defendants decided to redeem the Xtron and Firna bonds before maturity was because they got the impression that Sim wanted the bonds off CHC’s books.
Today, the prosecution sought to show Sim had never said nor given the impression of such effect.
In his defense, Tan explained that while Sim did not specifically instruct them to take the bonds off the books, Sim had said that he preferred CHC’s books to be kept simple. Tan told the court that he had walked away from the meeting with the impression that Sim preferred the unquoted bonds be taken out of CHC’s books as they were difficult to valuate.
The prosecution tried to show today that Tan was the one who initiated the redemption of Firna bonds and it was not because of anything Sim had said in the meeting.
Tan disagreed, pointing out that he recalled Sim’s testimony that he thought it was fair for them to have the impression that he wanted the bonds redeemed.
Producing Sim’s evidence, the prosecution pointed out that Sim said it was fair for them to have the impression that he would keep asking questions for the next 10 years until the Xtron bonds were redeemed. Regarding the Firna bonds, his general comment was that it was a commercial paper—why not invest in a listed company instead?
Tan maintained that the impression he got from the meeting was that Sim wanted both the Xtron and Firna bonds off the books.
Cross-examination continues on Monday, April 13 at 9.30am.