On the Indonesian businessman’s third day in court, he revealed highs and lows of his business: the stunning turnaround of a company in US$15m debt and a cashflow crunch that drove him to seek a loan.
CN PHOTOS: Michael Chan.
When he was first approached by his father-in-law to take over First National Glassware or Firna, a 38-year-old glass company, the company had been suffering losses for several years and had a US$15 million debt. Wahju Hanafi was reluctant to take over the company, having unsuccessfully sought for loans from numerous banks in both Singapore and Jakarta, Indonesia.
His father-in-law, however, insisted that Hanafi took over the business because the older gentleman had started it from scratch and believed that only Hanafi could turn the business around. Hanafi prayed and asked God to open doors for him if it was His will for him to take over Firna.
With five-year projections of Firna in hand, Hanafi approached three banks in Papua New Guinea for loans. To his astonishment, all three banks were willing to give him a loan. With that, he took over 80 percent shareholding in Firna in early 2007. Hanafi took it as a sign from God that this was what he was meant to do.
That was the start of Firna’s miraculous turnaround.
A flood in Jakarta caused a major competitor to collapse. This happened just one month after he took over Firna.
“So all of a sudden, I had people putting money on my table trying to buy stocks from me. To me, that was really a blessing … it proves, that really it is God’s plan … for me to start, to take over the factory,” he told the court.
Once Hanafi took over the business, the company broke even in a matter of months and started making profits by the end of that year. The value of Firna’s sizeable piece of land has also appreciated considerably today.
Hanafi took over Firna completely in early 2012.
This testimony arose in court this afternoon when deputy public prosecutor Tan Kiat Pheng questioned the prosecution witness on his acquisition of Firna.
Earlier in the day, it was also confirmed in court that the proceeds of the bonds subscription agreement issued by Xtron to CHC in 2007 were used for the purposes of the Crossover Project.
Hanafi said that the terms of the bonds were offered to Xtron were acceptable to him because Xtron required the funds to finance the Crossover Project. There was also consideration on whether the bonds could be repaid by investments, such as the sales of proceeds from Sun Ho’s music albums to be produced. Hanafi pointed out that budgets had been prepared and the return on investment considered, and that there were projected returns to recover the Crossover expenses. Because of the Crossover’s success in Taiwan, Hanafi was confident that there would be returns. Even if there had been a small loss, Hanafi said that it would not really matter.
The court also heard that in late 2007, Hanafi faced temporary cashflow issues both personally and in his business. He confided in his mentor and pastor Kong Hee about these issues—he had to raise money for his glassware company and to pay for his daughter’s wedding. To Hanafi’s surprise, arrangements were made for an interest-free loan from Xtron through Koh Siow Ngea as well as a repayment of investments he had previously made into Xtron. Hanafi had no issues with taking the loan as a temporary measure and had planned to repay the loan as soon as he could. To Hanafi, he had a vested interest in Xtron due to his personal guarantee.
Hanafi also told the court today that the Oceanfront Sentosa penthouse he had bought with Kong started out as a business opportunity. Having reaped a sizeable profit from an earlier unit he bought and sold, he saw it as an opportunity to bless his pastor with a similar profit by co-sharing the cost of the unit and selling it for a profit. Unfortunately, after the purchase of the unit, the 2007/2008 subprime crisis hit and Hanafi revealed that they have been unable to sell the unit till today.
Hanafi also testified that he met Justin Herz, Sun Ho’s manager in Los Angeles sometime in 2003, and he was aware of the financial requirements of the Crossover Project.
Court will resume tomorrow at 9.30 am.
中文报道 – CHC案件：何清伟靠上帝的恩典扭转Firna的生意
