The accused parties’ state of mind and their reliance on the advice of professionals, as well as weaknesses in the prosecution’s case made up key points of the defense at today’s oral submissions.
The oral submissions of the defense team—which follow written submissions given to the court—took place this morning. Each defense counsel presented the key points of his case to the court.
SC KENNETH TAN FOR JOHN LAM
Senior counsel Kenneth Tan, defense lawyer for John Lam, stated that the prosecution had to prove beyond reasonable doubt that the bonds were sham in nature and that his client knew of the sham nature and agreed to the conspiracy—he pointed out that there had been no direct evidence pointing to his client’s knowledge of the sham nature of the bonds. All the prosecution could rely on, Tan emphasized, was its own inferences that Lam knew about the plans.
At the inception of the first Xtron bonds, Tan pointed out, Lam was not involved in the structuring of the bonds and was not included in the correspondences that discussed the repayment plans. Lam’s evidence was that the bonds would be repaid with the proceeds from Sun Ho’s music album and that Wahju Hanafi would underwrite any losses incurred by the Crossover Project. While the prosecution argued that it was naïve to think that the proceeds can repay the bonds and that Hanafi would sponsor the whole project, Tan said in court that the prosecution could not infer that Lam knew that the bonds could not be repaid.
When it came to the Firna bonds, Tan stated that Lam only knew of the plans when he was briefed—he was not involved in the planning and structuring of the bonds and no evidence points to the fact that he knew whether or not the Firna bonds would be repaid.
Tan concluded his submission by stating that the prosecution’s case depended merely on inferences, and these inferences were not inexorable or irresistible. He said that the prosecution cannot simply “join the dots” when there is no direct evidence showing that his client had knowledge of the sham nature of the bonds and had agreed to participate in the alleged conspiracy.
In closing, Tan reminded the court that “I stated in the no case submission to say that there were many dots, and you can’t join the dots. You can’t join the dots. John Lam doesn’t know the facts which would constitute these bonds being shams. It’s now the close of a very long trial. Now I can say the prosecution needs to join those dots by inexorable and irresistible inferences. It can’t do that, because John Lam is not guilty of any of the three charges, sir.”
JASON CHAN FOR KONG HEE
Following Tan, Kong Hee’s lawyer, Jason Chan, submitted that evidence before the court had in fact showed that what happened was the complete opposite of the prosecution’s case.
Chan distilled the prosecution’s case on his client into two points: one, Kong had dishonest intentions because he knew that the using the building fund to make investments in support of Ho’s music career was wrong; and two, the bonds were sham because there was no intention for them to be repaid—there was allegedly no genuine legal obligation.
However, Chan pointed out that the evidence showed otherwise. Kong’s state of mind had always been that it was legal to invest the church’s building fund to support the Crossover Project, Chan said. Kong repeatedly gave instructions to his team to seek advice from the church’s lawyers and auditors before executing the transactions, and evidence showed that his instructions had been carried out.
Auditor Foong Daw Ching and the church’s former lawyers Jimmy Yim and Christina Ng were people that Kong relied on to protect the interest of the church. Chan noted it went against logic that a person with dishonest intent would bring his plans to advisors. He also noted that Kong had never been told by these advisors that the building fund could not be invested and used to support the Crossover Project.
As for the intention for the bonds to generate genuine legal obligation, evidence showed that Kong had the intention to fulfill the obligations, Chan said. He established that Kong had gone through extensive steps to tighten the US album’s budget, and this was ultimately to ensure that proceeds would come in to repay the bonds. Chan also refuted the prosecution’s theory that the team had depended on a sales projection of 200,000 copies of Sun Ho’s album—that would mean there would not be enough money to repay the bonds. In fact, just two days after the 200,000 copies projection, Chan pointed out there was a new projection for multi-millions to be made from sales of the album.
Chan ended his closing submissions by saying, “Putting all of that together, looking at the actual evidence before this court, our submission is that it is unfair to say that Pastor Kong and the other accused were dishonest. It is equally unfair to say that they intended to enter into anything that could be called a sham transaction. Under the circumstances, your Honour, it would be unfair to convict Pastor Kong and the other co-accused of the charges concerning the subscription to the bonds.”
PAUL SEAH FOR SHARON TAN
In his closing submissions, Paul Seah, defense lawyer for Sharon Tan, focused on Tan’s lack of motive and her mindset while carrying out the transactions. He emphasized that Tan loved CHC and had no reason to cause loss to the church. She had nothing to gain from the conspiracy—no cut of the proceeds, no pay rise or promotion—but had everything to lose. While the prosecution had argued that there was no need for a motive as long as an illegal act was done, Seah reminded the court that motive has always been a key part of the court’s consideration on criminal cases; Tan’s lack of motive raised serious doubts on the charges against her.
Seah also pointed out that what was important was Sharon Tan’s mindset was that auditor Sim Guan Seng had wanted the bonds off the books after the April 9, 2009 meeting with him. This was shown in the email that she sent to Tan Ye Peng and Lam, who were also present at the meeting. She also related the same information to Chew Eng Han later by phone. Seah also noted that Tan had no part to play in the decision to eventually redeem the bonds and the way to redeem them. Moreover, she repeatedly asked Chew if he had sought lawyer Christina Ng’s advice on the matter. Sharon Tan had told the court that this was important to her because Tan Ye Peng had wanted to ensure that the redemption plan was legal.
Seah pointed out that the prosecution had disputed the timing of the handwritten notes by Sharon Tan that the Commercial Affairs Department had seized. He said that the notes were so detailed that there was no other conclusion to draw except that they were contemporaneously produced during the Board meeting.
Seah made the point that “it is not the normal behaviour of criminal conspirators to go to the board of the organisation that they are seeking to cause loss to and say, ‘Hey, listen up, guys, this is what we are going to do’ and then proceed to draw complicated diagrams and explain to them step-by-step in detail, exactly how they are going to go about the criminal scheme. Yet, this is exactly what Mr Chew and Pastor Tan did, and Ms Tan went along happily taking minutes.”
He added: “Your Honour, this is not criminal behaviour. Or, if it is, these must be the most absolutely inept, irrational criminals I’ve ever seen.”
Seah reiterated that his client had no reason whatsoever to think that the transactions were sham, and that she had believed all the transactions were above board. Sharon Tan was “just a humble woman trying to do her job to the best of her ability. It would be a grave injustice to find her guilty for the crime she has been accused of committing. On her behalf, I humbly ask for full acquittal.”
CHEW ENG HAN, REPRESENTING HIMSELF
After the lunch break, former fund manager Chew Eng Han reiterated that his frame of mind had been pure when he was alleged to have conspired with the other co-accused to commit criminal breach of trust (CBT). He submitted that the bonds he had structured as investment manager of the church were in line with common market practices. The prosecution’s argument that the lack of negotiations and failure to redeem the bonds within the maturity period meant that the bonds were sham was a re-definition of investment rules according to real market practices, he said, basing his statement on his career in the industry.
If the prosecution was correct, the implications for the whole financial industry would have been “disastrous” as nobody would dare issue bonds anymore, he added.
Furthermore, with such reliance on the technicalities of what constituted a sham bond, why were no expert witnesses called in by the prosecution, asked Chew.
He submitted the prosecution should not have quibbled with the structure of the bonds but the career and track record of Sun Ho, which he claimed he had been misled to believe to be a real success.
Chew closed with a challenge to the prosecution: “The prosecution dismisses Kong Hee’s dependence on auditors’ and lawyers’ belief that the bonds were not sham, since they are opinion evidence which are not relevant. I agree, and so the prosecution should not rely on Sim Guan Seng’s view that he would have doubts on the SOF or ARLA as investments which they highlighted in paragraph 341 of their own submissions. In fact, Sim Guan Seng agreed with my ex-counsel, Michael Khoo. Sim Guan Seng admitted that he is not qualified to comment on the authenticity or propriety of investments.”
SC N SREENIVASAN FOR TAN YE PENG
Tan Ye Peng’s lawyer, senior counsel N Sreenivasan, presented the court with a list of 39 points arguing against the prosecution’s written submissions. He took the court through some of these, opening with the statement that the CHC case was unique in that it had no complainant, there was no expert evidence heard (and both sides agree opinion evidence could not be considered), and what was also unique was the relationship the accused had.
Regarding the prosecution’s charge that accounting records had been falsified, Sreenivasan pointed out that there were only two other options—to not have recorded anything at all, which would have been just as wrong, or to record the transactions in question as something else. Strangely, the prosecution had, to date, never stated what the right accounting entry should have been.
Over the course of the trial proceedings, the court has also heard the prosecution insisting that the accused parties were lying when they said the church’s board members were misled about the bond transactions.
As such, the burden of proof was on the prosecution to produce witnesses from among the board members to testify so, said the senior counsel; the prosecution cannot simply assert its disbelief of the accused parties’ testimony to make its case, the senior counsel pointed out. However, no board member had been called by the prosecution. Sreenivasan submitted that this was because “the prosecution knows that the board members will give evidence in favour of the accused, and it is not acceptable at all to then to argue their way out of it.”
The senior counsel brought up the familiar topic of the mysterious First Information Report once more. He said, “Actually, the truth came out when he said that we got a complaint from the Commissioner of Charities about falsification of accounts, and the investigations started immediately after that. I mean, that makes sense. CAD investigates after they got something, because CAD doesn’t wait for one and a half years or five years to investigate. But it’s interesting because the prosecution did not put that forward as a first information report, resisted attempts to look at it, strenuously resisted, even though it’s common sense that if a report comes in and the next day you start investigation, the report must be the cause and the investigation must be the effect.”
Although the report started out as falsification charges, the actual charges were for unauthorized usage of building fund. But Sreenivasan pointed out that no CHC board member or executive member had lodged a complaint that a wrongdoing had been committed. It had seemed that the prosecution “cobbled together” their own submissions and assertions to form their case.
In arguing against the prosecution’s written submissions, Sreenivasan said to the court, “What cannot be done in weighing evidence in a criminal trial is what the prosecution has done: put in over a thousand documents and then take one line from here, one line from there, one set of conversations from there, and then try and build up a series of inferred factual propositions and then ask your Honour to infer dishonest intent and ignore meat of evidence.” Sreenivasan closed by exhorting the court to “look at what they did prior to the bonds, the manner in which they did the bonds, their conduct after that in trying to get the money back in, if we look at the emails they exchanged with each other contemporaneously, actively discussing cashflow of Xtron, whether the revenue of Xtron can be increased to pay the money back, how the bonds can be retired and restructured, they were not talking about something that was sham.”
SC ANDRE MANIAM FOR SERINA WEE
Rounding up the defense team’s submissions, lawyer for Serina Wee, Andre Maniam said that the CHC case was an “odd conspiracy” because guilty parties typically attempt to escape liability, and not take on liability, especially if they knew that it would be a loss-making venture according to the contentious 200,000 album sales projection (which the defense had established was purely a worst case scenario).
This was in response to the prosecution’s position that the bonds were sham because the accused knew Xtron would not be able to recoup its investments, and instead of letting Xtron find solutions by itself to fulfil its debt to CHC, the accused were themselves helping to ensure the fulfilment of the bond obligations. It’s just not human nature for someone to know they would lose money but then take on the liability themselves, said Maniam.
He also pointed out the various instances in which the language his client used in her email correspondences with her co-accused were consistent with her testimony that there was no conspiracy to commit wrong-doing. In addressing the sham allegations of the bond transactions, Maniam quoted illustrations from two cases—Ang Teck Hwa v PP and Tan Tze Chye v PP—where the court ruled that it was not enough to ask if the accused knew that they were doing wrong, but if they actually committed wrongdoing in order to cause wrongful loss. In the case of CHC, said Maniam, there was insufficient evidence of this wrongdoing.
Court will resume Monday, September 14, at 9am, with Maniam completing his closing submissions before the prosecution’s closing submissions.
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