Oct 20, 2015

Judgment looms for City Harvest Church leaders

The New Paper
October 20, 2015

City Harvest Church (CHC) founder Kong Hee and five others are on trial for allegedly misusing church funds through sham bonds.

First, $24 million was allegedly misused to fund the music career of Kong's wife, Ms Ho Yeow Sun (right), whose stage name is Sun Ho, and another $26.6 million to allegedly cover up the first amount.

This was done through music production firm Xtron Productions and glass manufacturer Firna, both run by long-time church supporters, prosecutors said.
Kong, 51, former board member John Lam, 47, finance manager Sharon Tan, 39, ex-fund manager Chew Eng Han, 55, deputy senior pastor Tan Ye Peng, 42, and former finance manager Serina Wee, 38, face charges of criminal breach of trust and/or falsifying accounts.

The evidence shed light on the inner workings of the church and the links the accused had with the Crossover Project, a church plan which sought to use Ms Ho's secular music to evangelise.

Kong and the others have maintained that the church's transactions were legitimate and they had acted "in good faith" on the advice of lawyers and auditors.


Four of the six accused stressed that there was no wrongful loss suffered by CHC, and that they were entitled legally to invest church funds in Ms Ho's music career as it was a church objective.

But whether this investment was an authorised use of the building fund is a point disputed by the prosecution.

The fundamental lie that made the use of the church's building fund a crime was when church members and donors were told that it was meant to safeguard the money for future investments, said Chief Prosecutor Mavis Chionh.

"The donors to the Building Fund did not know that Kong Hee, Ye Peng, John, Eng Han and Serina had other plans...which were a betrayal of the trust placed in them."

This led to the need to disguise the wrongful use as legitimate investments - the reason the sham Xtron and Firna bonds were created, she said.

But the greatest of these lies was the round-tripping of more church money to deceive the auditors by removing the bonds from the church's accounts.
Said Ms Chionh: "Now they say they did not do so to put money in their own pockets. They say it was for a noble aim: to further the church's evangelical purpose.

"But... the professed belief of the modern-day Robin Hood that he is stealing to further a greater social good in no way makes his theft any less a crime."
The penalty for criminal breach of trust is a life sentence, or up to 20 years in jail and a fine. For falsifying accounts, the penalty is a maximum of 10 years in jail, a fine, or both.

HEE, 51

CHC founder and senior pastor

Three charges of criminal breach of trust (CBT)
Kong maintains he and the other defendants repeatedly sought and received assurance from lawyers and auditors that the transactions at the heart of the trial were all above board.

Pointing to meetings with auditor Foong Daw Ching, Kong said: "If I have committed fraud, corruption and forgery, why would I want to see him?"
Kong also testified he did his "level best" to recoup all the money put into Ms Ho's US album.

"Why? Because the church had invested its building fund in Xtron and I wanted to be sure the church suffered no loss."

Senior Counsel Edwin Tong, who is acting for Kong, noted that "every single cent" drawn from the bonds went into the Crossover and there was no personal gain by Kong or any of the accused.

Chief Prosecutor Mavis Chionh, however, called Kong a "well-practised liar" with an "utter lack of credibility".

"Far from being a mere figurehead...(Kong) was a meticulous and details-oriented leader whose express approval was needed before the bonds could go ahead," Ms Chionh said.


Former CHC fund manager
Six charges of CBT and four of falsification of accounts
In 2013, Chew shocked the masses with his announcement to quit the church after almost two decades.

He said he had been "seeing and tolerating...betrayal, slander, ingratitude, denial and lies, manipulation and control, greed, pride, hypocrisy, abuse of authority" and more.

Later, Chew, who conducted his own defence, accused Kong of lying to church members about Ms Ho's music success, which he said was "not real", and a result of church members spending hundreds of thousands of dollars to buy her CDs.

Ms Chionh said Chew's defence contained many fundamental flaws and contradictions.

For example, Chew had said CHC transferred money to Xtron in the form of advance rent so that the firm had a war chest to secure a new building for the church.

Yet Chew went on to say Xtron's ability to acquire a building did not depend on that money, Ms Chionh said.

"We submit that his attempt to take both these positions at once simply emphasises the fact that the money transferred under the (advance rent) was just purported to be for building acquisition, but actually intended for use in the round-tripping scheme."

Chew, who has three decades of experience in finance, rebutted: "Just because the prosecution cannot understand my explanation, doesn't mean I've contradicted myself between my evidence-in-chief and submissions.
"I think they had better go and take some courses in financial markets before they throw insults at me."

WEE, 38

Former CHC finance manager
Six charges of CBT and four of falsification of accounts.
Wee, a mother of three, is arguably remembered most for her svelte figure and the stylish outfits she wore during the trial.

Once dubbed a "goddess" by netizens, she was also the Crossover Project administrator.

The role made her the most involved out of the six accused, said Ms Chionh.
Wee's failure to address the prosecution's evidence against her only showed she had no satisfactory answers, and was best characterised as superficial, said the Chief Prosecutor.

"This is illustrated by the way she has tried to focus on selected portions of a small clutch of exhibits...while ignoring or simply glossing over the bulk of the evidence which demonstrates her guilt," Ms Chionh said.

Wee's lawyer, Senior Counsel Andre Maniam, stressed there was no dishonesty involved and she had believed they were legally entitled to do what she did.
"Yes, church funds were used, but they were used for church purposes. The prosecution has not alleged that any of the accused intended wrongful gain.
"They just say wrongful loss. What is that loss?" he asked.

TAN, 39

CHC finance manager
Three charges of CBT and four charges of falsification of accounts
Tan's motive was not criminal - all she wanted to do was to avoid audit issues, said her lawyer Paul Seah.

"This is not a smooth operator or highly sophisticated wheeler-dealer... she had no corporate experience. This was her first real job," he said.

But Ms Chionh rubbished the defence's claim that this was a mere failure of corporate governance arising from ignorance.

This was absurd, given the sophistication and scale of the church's operations, she said.

"CHC was not some struggling new voluntary outfit run by bumbling amateurs with no experience of the financial world," she said.

She also called Tan's evidence as a hardworking and naive church member "deeply cynical and self-serving", and said it was an attempt by the defence to downplay Tan's involvement.

"Her full participation... in the planning, execution and subsequent cover-up of the round-tripping transactions, makes the full extent of her guilty knowledge apparent," she said.

LAM, 47

Former board and investment committee member
Three charges of CBT
Lam was accused of being the "inside man" - one who ensured regulatory authorities did not discover the true nature of the accused's doings.

Ms Chionh said: "He was the inside man in the church's governance and oversight bodies, preventing these bodies from discovering the sham nature of the bonds.

"His attempts to distance himself from the sham bonds are ludicrous, given his position as a church board member who, on his own admission, was relied on by the other board members for his financial expertise."

Lam's lawyer, Senior Counsel Kenneth Tan, said his client, who was occasionally roped in to handle specific financial issues, was no saboteur.

"A faith in wanting to evangelise does not extend and... is incompatible to a faith that requires you to do something criminal, to cheat the church, which he and many of the co-accused love, to achieve a church end," he said.


CHC deputy senior pastor
Six charges of CBT and four of falsification of accounts.
Tan told the court that he relied on "advice and blessings" given by auditors and fellow co-accused Chew, prompting Ms Chionh to call his claims "lies of a man without credit".

The implicit message was that Tan was a naive man dependent on others to make decisions and was incapable of exercising his own judgment, said the Chief Prosecutor.

"But what this claim entirely neglects is the reality that, at the relevant time, Tan Ye Peng's authority was second only to Kong Hee's in the management of the Crossover (project)," she added.

His lawyer, Senior Counsel N. Sreenivasan, said Tan did not push any responsibility away, especially when it came to the structuring of financial instruments.

Tan had, in fact, stepped up to take responsibility, he added.


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