Defense lawyers for John Lam and Kong Hee took the stand today to appeal against the conviction and sentencing of their clients.
The six defendants involved in the City Harvest trial, including the church’s senior pastor Kong Hee and deputy senior pastor Tan Ye Peng, returned to the court this morning (Sep 15). They are appealing against their conviction of the misuse of church’s building funds to finance the Crossover Project via bond investments into Xtron and Firna, and a subsequent misappropriation of funds in “round-tripping” transactions. They are also appealing against their sentences.
The appeal is heard by Judge of Appeal Chao Hick Tin, and Justices Woo Bih Li and Chan Seng Onn. Hearing is scheduled to continue until next Wednesday (Sep 21).
Senior counsel Kenneth Tan, who acted for John Lam, was the first to make his oral submission. Lam, who was a board member at the time of the transactions, was found guilty of the three charges against him for conspiracy to commit criminal breach of trust. Tan said today that the inferences used by the trial judge were not inexorable and inevitable that Lam was aware of or was involved in various matters.
For one, Tan stated that Lam was not involved in the emails that the prosecution had used as evidence that the Xtron bond proceeds was a temporary loan to Kong and that the repayment of bonds was not by Xtron but by the other alleged conspirators. The trial judge had said that Lam must have known about this but Tan argued that Lam did not know more than the other board member.
Justice Woo and Justice Chao questioned Tan on several matters, including the “secret letter” that Lam signed for the Firna bonds transaction. This was a letter given to Firna’s owner Wahju Hanafi to assure his father-in-law, the co-owner of the glassware factory, that in the event that CHC activate the convertibility feature of the bond agreement and acquired 40 percent of Firna shares in a default situation, CHC would sell the shares back to Firna at US$1.
The court questioned why was Lam asked to sign the letter if he was, as Tan had stated, not involved in the Firna bonds. Tan told the judges that former fund manager Chew Eng Han had assured Lam that he had spoken to Hanafi, who assured him that he would not enforce the convertibility feature. Lam was not privy to prior emails discussing on the structure of the Firna bonds nor was he involved in later emails discussing the repayment of the bonds. Furthermore, he had expected Chew to bring the letter to the board. Also, he later emailed Serina Wee, the church’s former accountant, and asked her to cancel the convertibility feature.
Tan rounded up his submission by emphasizing that, based on the requirement of inexorability which was not fulfilled in the trial judge’s judgement, his client was not guilty of abetting in the alleged wrongdoings, and that Lam should be discharged.
The afternoon session saw Kong Hee’s counsel Edwin Tong appealing against both the conviction and the eight-year sentence meted to his client which he called “manifestly” excessive. He also told the Court of Appeal that it was an accepted fact that Sun Ho’s music career was synonymous with the Crossover, that was a mission of the church and that the funds went entirely to this mission.
Pointing to alleged gaps of information in a management representation letter detailing CHC’s financial transactions, Tong said that evidence should not be taken in isolation—this was just one example of how evidence had been used in the trial.
Tong stated that the trial judge himself had noted that City Harvest’s auditors were aware, to a great degree, of the relationship between Xtron and CHC and the background to this that began with the Roland Poon incident.
Another point brought up by Tong was on the issue of control. The trial judge had taken the prosecution’s point that because Kong and the others “controlled” the funds, the bonds were deemed not genuine. On this point, Tong countered that the evidence of Kong “controlling” the funds meant the reverse; instead of giving the church money directly to a third party, his client was in fact safeguarding the church by managing the way this third party accessed church funds, thereby ensuring the soundness of the church’s investments.
One key point of Tong’s case was that in his guilty verdict of his client, the trial judge did not account for the second element of criminal liability, the mens rea or “state of mind” of the accused, which demands proof beyond reasonable doubt that the accused acted with the knowledge of wrongdoing, that is, being aware that his act will cause wrongful loss to others.
Tong underscored that fact that the trial judge had observed throughout the delivery of his judgement and verdict that there had been no personal gain on the part of any of the accused parties, that all the funds were deployed entirely for church purposes, and that the accused were clearly people who loved the church and meant it no harm.
He said that for a charge of criminal breach of trust, there has to be both actus reus, that is, the action or conduct, and mens rea or the intention or knowledge of causing wrongful loss.
Court resumes tomorrow morning at 10am.
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