City Harvest Trial: No record of church management approving initial bond buy, admits Kong Hee
Published on Aug 26, 2014 1:49 PM
SINGAPORE - City Harvest founder Kong Hee admitted on Tuesday that, as far as he knew, there was no record of the church's management board approving a $13 million investment into Xtron Productions, the firm that managed his wife Ho Yeow Sun's music career.
In fact, the investment was "not an actual investment" at all, according to Chew Eng Han, the church's fund manager at the time.
Chew had told investigators from the Commercial Affairs Department that the transaction was simply to make sure Xtron had enough money for Ms Ho's career, since her secular music was part of a church-approved project to evangelise to non-Christians.
These revelations came to light on Tuesday as the prosecution sought to show that the $13 million Xtron bonds which the church invested in in 2007, were nothing more than shams to enable the misuse of church funds for Ms Ho's career.
Kong, Chew and four others face various charges for their part in allegedly cooking up sham deals to funnel $24 million out of the church's coffers, and then misusing another $26.6 million to cover up the first amount.
The prosecution has tried to prove that Kong and his deputies controlled Xtron through puppet directors who were also church members, and also held key positions in City Harvest's oversight committees such as its audit and finance committees. This enabled them to rubberstamp the sham deals, alleges the prosecution.
Deputy Public Prosecutor Christopher Ong zeroed in on the Xtron bonds yesterday, which were the first in the series of alleged suspect transactions. He called the bonds "just an excuse to transfer the church's building fund to Xtron".
Kong had insisted that the church board approved the bonds, but conceded in court that there was no record of this. He said he had trusted two fellow defendants, Chew and deputy senior pastor Tan Ye Peng, to seek the board's approval.
"They didn't highlight anything negative to me or raise any issues, so I assumed all necessary approval was given," he said.
Mr Ong had also put to Kong that Chew set up investment firm AMAC Capital Partners and was appointed the church's fund manager to help carry out the sham deals. He produced an e-mail in which Kong had offered $5,000 salaries to Chew and Chew's wife after Chew left his banking job to set up AMAC.
Kong disagreed strenuously and said he had offered the salaries because Chew was "having a difficult time" after leaving his job. "It was brought to my awareness that he was facing a financial crunch so I just wanted to help him," Kong said. He also stressed that the bond investment was genuine as it offered good returns at 7 per cent per year.