Prosecution alleges that the Firna director had no control over funds, as the funds to redeem the Firna bonds came from the church.
Sharon Tan enters her third week on the stand today. CN PHOTO: Daniel Poh
It was City Harvest Church’s idea for Firna to do an early redemption of the bonds issued to the church–it was thus fair for Firna director, Wahju Hanafi, to say that the money would not come from him.
That is what CHC finance manager Sharon Tan told the court this morning when deputy public prosecutor Mavis Chionh alleged that Chew Eng Han and Serina Wee had came up with the funds for Hanafi to redeem the bonds, that he had no control over these funds and the transaction was thus not arm’s length.
The court had heard that CHC had invested into two tranches of the Special Opoortunity Fund from fund manager AMAC Capital Partners. These funds were then loaned to Ultimate Assets (UA), and UA in turn gave it to Firna for it to redeem the bonds from CHC. The prosecution charged that this is a round-tripping of CHC funds to create the appearence that Firna had redeemed the bonds.
Today, the prosecution pulled out Hanafi’s evidence and pointed out that he did not know why Firna had to do an early redemption and he would not be the one to come up with the funds to redeem the bonds because the money drawn down from the bond had already gone into his business. The redemption money eventually came from Chew and Wee. The DPP then suggested that Hanafi merely agreed to the plan set out by Chew to redeem the bonds using monies he provided.
Sharon Tan disgreed to this allegation, explaining that while the initiative to redeem the Firna bonds came from CHC, Hanafi still had to make an independent decision to redeem the bonds.
The DPP also brought up an email that showed Sharon Tan and Chew giving Hanafi specific instructions on the transfer of funds. The finance manager pointed out that the instructions would not have been given if Hanafi had not been agreeable to it.
Going through the notes taken during the meeting that the CHC representatives had with auditor Sim Guan Seng, the prosecutor also sought to establish that the auditors were not told the whole truth of the plan of using the sum under the Advance Rental Licensing Agreement to redeem both the Xtron and Firna bonds.
Referring to the minutes taken by Lai Baoting during the meeting, the DPP pointed out that there was no records of discussions on how Firna bonds would be redeemed and how tranche 10 and 11 of the SOF would be used.
The DPP also pointed out that both Lai and audit manager Foong Ai Fang’s notes did not show the CHC representatives telling Sim that the money from the SOF would be loaned to UA and UA would loan to Firna for redemption of bonds. Sim was also not told that part of the ARLA would be invested into Firna and the same funds would be used by UA to return AMAC and AMAC then gives the amount to CHC as returns of the SOF.
The DPP thus alledged that it was Sharon Tan and her co-defendants’ intention that Sim not see the other side of the equation. Tan disagreed saying she was told that there was no need to bring these transactions up to the auditors.
Chionh also addressed the charge Sharon Tan faces of instigating Lai Baoting to make false entries in CHC’s books. The court saw an email where Tan explained the ARLA to Lai and Angie Koh, and at the same time instructed them to make journal entries of $21.5m of prepayment to Xtron to set off the amended Xtron bonds. She also gave instructions to Lai to remit the amounts needed for SOF tranche 10 and 11 to Chew Eng Han.
Sharon Tan had explained earlier in her evidence that the treatment of the transaction was advised by audit manager Foong Aifang. She reiterated this morning that she had told Foong that the ARLA was to give Xtron the mandate for CHC’s property search and to set off the Singapore Expo rental fees. She had also told Foong the plan to use part of the advance rental to set off the Xtron bonds.
The DPP argued that since Foong was told that the transaction was a advance rental, she would naturally recommend to record it as a prepayment. She put it to the finance manager that the transactions under the SOF were intended by Sharon Tan, Chew, Wee and Tan Ye Peng to achieve the redemption of the Firna bonds, and that the ARLA was intended to engineer the redemption of Xtron and Firna bonds by the end of the financial year. She also put to Sharon Tan that the four of them had to make sure the CHC and Xtron books reflect what they were trying to do and thus Sharon Tan instigated Lai to make false entries in the CHC books.
Sharon Tan disagreed.
Court resumed at 2pm.
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