Cross-examination of Tan Ye Peng by the prosecution moved on to the round-tripping charges today.
The court had previously seen that CHC had paid Xtron a lump sum of over $40m under the ARLA (Advanced Rental License Agreement) to enable Xtron to obtain a new property. Part of that sum was then used to redeem the Xtron bonds.
In addition, a separate investment, called the SOF (Special Opportunities Fund), was invested by CHC via Chew Eng Han’s fund investment company, AMAC. The court has seen that this money was used to effect the redemption of the Firna bonds.
The SOF investment itself was subsequently redeemed by Xtron using the money it received from the advance rental paid by CHC.
The prosecution has charged that both the ARLA and the SOF transactions were sham investments, done in order to create the impression that the church’s investments had been properly recouped when it was actually achieved with CHC’s own money.
Today in court, Tan Ye Peng disagreed with the prosecutor’s stand, stating that the SOF was a principal-guaranteed investment which was returned to CHC with favorable returns.
Although Xtron had used part of the ARLA to buy up the bonds, Tan explained that it was still obligated to provide the corresponding value for which CHC had paid, which in this case was the use of venue for a pre-agreed length of time. Xtron, on its part, would service this obligation with the expected revenue that was to come from the US album sales.
In essence, AMAC and Xtron were legally bound to compensate CHC for what it had paid. When Chew had explained the whole bond redemption plan to him, Tan told the court he had no doubt that Chew was acting in the best interest of the church.
The prosecutor reopened a line of questioning she had pursued multiple times in her cross-examination of Tan: the role of auditor Sim Guan Seng in the redemption of the bonds. Tan further explained that the idea for the bond redemption came about because the accused had believed that it was what Sim wanted. When Sim was on the stand, he had testified he was aware that the ARLA would result in the redemption of the Xtron bond in CHC’s books, and he had no issue with it.
But if auditor Foong Daw Ching had already gave his blessings for the Xtron and Firna bonds, why did the team not bring this up to Sim when he gave the impression that he wanted the bonds off the City Harvest Church’s accounts at the Apr 9, 2009 meeting, the prosecution asked again.
Tan told the court that the team did not bring it up because the concern Sim had was to do with valuation, it does not matter whether Foong had given his blessing or not.
He said that Sim was telling the team that he was not comfortable with the independent valuer when he mentioned the bonds; that was why Tan did not think to mention the meeting he had with Foong. Moreover, the issue was that there was no market to value the Xtron bonds with, it has nothing to do with the advice Foong gave.
Tan also said that while he did not tell Sim about Foong’s advice, he did meet Foong on Apr 13, 2009, a few days after he met Sim, to update Foong about his meeting with Sim. In that meeting, Foong said he agreed with Sim, so Tan and his team decided to clear the bonds off the books.
The prosecution did not accept Tan’s explanation and put to him that he did not tell Sim about Foong’s advice because he had never consulted Foong on the Xtron and Firna bonds.
Court resumes tomorrow morning at 9.30am.
中文报道 – 城市丰收审讯：陈坚持：ARLA与SOF投资非虚假