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City Harvest Appeal: Investments Genuine As Matter Of Both Fact And Intent, Says Defense

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In rounding up the appeal submissions for the six, lawyers for Tan Ye Peng and Serina Wee reiterated that at no point did their clients believe they were doing anything illegal or against the church’s best interests.

City Harvest Appeal: Investments Genuine As Matter Of Both Fact And Intent, Says Defense

CN PHOTO: Daniel Poh

In defense of his client Tan Ye Peng, senior counsel N Sreenivasan pointed out in court this morning that the “odd situation” in this case was that the use of the building funds were not clearly wrong, that the prosecution did not rely on experts to prove that the transactions were not investments and the owner of the funds, that is, City Harvest Church, did not complain that the funds were wrongly used. Thus the appellants were charged based on two questions: if there was a wrongful use of funds and if they actually knew it was wrong, and if there was the element of dishonesty present.

Sreenivasan said that the investments were genuine both as a matter of fact and as a matter of intent.

The senior counsel produced emails and documents to show that Foong Daw Ching from the church’s audit firm and lawyer Christina Ng knew the full extent of the investments—its intent and purpose. Ng was the one who drafted the Bond Subscription Agreement by CHC from Xtron, and it is in the agreement that the purpose of the bonds was to support the Crossover. Thus, the investment qualifies as a genuine investment and there was no wrongful use of funds.

On the part of the appellants’ intentions, the senior counsel argued that everything that the auditors and lawyers knew was what the appellants themselves knew, but the professionals saw no reason to raise any red flags. The defendants therefore had no reason to think that the investment was a wrong use of funds or that they were not legally entitled to do make the investment.

Sreenivasan also said that the dual purpose of the investment—to make returns as well as to support the Crossover—does not make the investment a sham.

He urged the court to not just look at things with the benefit of hindsight but look at the appellants’ state of mind as the events were happening, at the time they were making decisions.

In the afternoon, Serina Wee’s lawyer, senior counsel Andre Maniam added that his client, formerly Xtron’s accountant, never thought she was doing anything wrong. Her state of mind as an accountant always concerned the disclosure of transactions, not the legitimacy of those transactions.

For example, when Foong said that “no church funds had ever been used” during a 2002 annual general meeting, she did not feel that there was anything wrong. This was because the money had been reclassified, with the help of the auditors, as a “deferred expenditure” or an asset with expected returns, and not an “expense.” Hence the statement was accurate, even though the church had spent over $200,000 on Sun Ho’s Chinese music album that year.

Maniam also sought to counter the prosecution’s case that the appellants intentionally put the church’s investment in jeopardy, which it deduced using a single Excel sheet of low sales projections of Sun Ho’s English album.

Maniam pointed out that the trial judge only took into account this worst case projection without considering that there were other higher, more realistic figures which was closer to what the appellants believed would be achieved.

As with the earlier lawyers’ appeal submissions, Maniam stated that his client had acted according to what she believed was in the best interests of church. Therefore, based on Illustration (d) (see box) under the section on criminal breach of trust in the Penal Code, it would not be criminal breach of trust.

Delving into the issue of control, Maniam cited an authority from a precedent case, Macniven (HM Inspector of Taxes) v Westmoreland Investments Ltd (2001), in which the House of Lords upheld that full control of one company by another does not render financial transactions between the two entities unlawful or non-genuine.

The senior counsel added that this authority had been previously cited in his closing submission, but the trial judge had not dealt with this in his judgment.

PENAL CODE: CRIMINAL BREACH OF TRUST

  1. Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person to do so, commits “criminal breach of trust”.

Illustrations

(a) A, being executor to the will of a deceased person, dishonestly disobeys the law which directs him to divide the effects according to the will, and appropriates them to his own use. A has committed criminal breach of trust.

(b) A is a warehouse-keeper. Z, going on a journey, entrusts his furniture to A, under a contract that it shall be returned on payment of a stipulated sum for warehouse room. A dishonestly sells the goods. A has committed breach of trust.

(c) A, residing in Singapore, is agent for Z, residing in Penang. There is an express or implied contract between A and Z that all sums remitted by Z to A shall be invested by A according to Z’s direction. Z remits $5,000 to A, with directions to A to invest the same in Government securities. A dishonestly disobeys the direction, and employs the money in his own business. A has committed criminal breach of trust.

(d) But if A, in the last illustration, not dishonestly, but in good faith, believing that it will be more for Z’s advantage to hold shares in the Bank X, disobeys Z’s directions, and buys shares in the Bank X for Z, instead of buying Government securities, here, though Z should suffer loss and should be entitled to bring a civil action against A on account of that loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.

(e) A, a collector of Government money, or a clerk in a Government office, is entrusted with public money, and is either directed by law, or bound by a contract, express or implied, with the Government, to pay into a certain treasury all the public money which he holds. A dishonestly appropriates the money. A has committed criminal breach of trust.

(f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A dishonestly misappropriates the property. A has committed criminal breach of trust.

Source: Singapore Statutes Online

 

中文报道 – 城市丰收审讯上诉:辩方:就事实和动机而言,投资属真实交易

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