Prosecution questioned Wahju Hanafi on the issuance of Firna bonds to Xtron.
CN PHOTO ARCHIVE
The City Harvest Church Trial continued today with the prosecution’s questioning of its witness Wahju Hanafi over bonds issued by his glassware company Firna to Xtron.
Deputy public prosecutor Tan Kiat Pheng, referring to several emails regarding the interest rate for the bonds, asked Hanafi who was involved in determining the interest rate. It appeared on emails that lawyers had drafted the rate at 5.5 percent, but ultimately, the rate was decided at 4.5 percent by Hanafi.
Hanafi told the court that negotiations over the interest rate had taken place during face-to-face communications and not over emails.
Hanafi said that Choong Kar Weng and Koh Siow Ngea, the directors of Xtron, had requested for a 5.5 percent interest rate and he negotiated it down to 4.5 percent. He had decided on the lower rate to match the interest rate of Firna’s bonds issued to CHC. This was done when he met them in church and not captured by the chains of email presented by the DPP. The information was then passed on to the accountants.
The prosecution have been relying on emails and documents to make suggestions that Serina Wee and Chew Eng Han, two of the accused, were in control of funds. The prosecution is attempting to show that Firna and Xtron were shell companies used to issue what they call “sham bonds” for the purpose of moving church funds into the Crossover Project.
The Xtron-Firna bond was the main issue discussed in court this morning. Hanafi gave evidence that the bonds came about after Chew had suggested to him to restructure the Firna bonds issued to CHC. Arrangements were thereafter made for the CHC-Firna bonds to be redeemed and for Firna to issue bonds to Xtron instead. Hanafi said this was just a matter of changing the lender.
Hanafi eventually redeemed the Xtron-Firna bonds after he took a US$22 million bank loan. He made the decision to redeem the bonds after anonymous bloggers discussed CHC in March 2010. Besides the redemption of bonds, the bank loan also provided him with working capital for his businesses.
