Sharon Tan’s lawyer seeks to show that what the prosecution calls a round-tripping of church funds was really a bridging loan.
Sharon Tan’s lawyer revealed the true nature of the SOF today. CN PHOTO: Michael Chan
Sharon Tan told the court this afternoon that when Chew Eng Han shared with her the plans for City Harvest Church to invest into AMAC’s Special Opportunity Fund (SOF) and the funds would ultimately go to redeeming the Firna bonds, she felt that it was the same as the earlier SOF that CHC had invested into previously. The fund invested would then become a bridging loan from AMAC to Ultimate Assets to facilitate the redemption of Firna bonds.
It is the prosecution’s position that two tranches of SOF that CHC invested into were not real transactions but a means to create the appearance of Firna bonds being redeemed.
However, this afternoon, defense lawyer for Tan, senior counsel Kannan Ramesh produced evidence to show that the SOF was a genuine transaction and the funds transferred from AMAC to UA served as a bridging loan.
The court heard that while Firna director Wahju Hanafi had agreed to CHC’s initiative to do an early redemption of Firna bonds, he did not have the ready funds to do so because the proceeds of Firna bonds had been invested into his business. Chew had to provide the funds to redeem the Firna bonds and hence there was a need for the bridging loan. This was to be done through CHC’s investment into AMAC’s SOF, from which AMAC would make a loan out to Ultimate Assets, and UA would then loan the monies to Firna.
The defense counsel pulled out board meeting minutes and BlackBerry messages to show that Chew had spoken to Hanafi who was “okay” with the transactions.
Sharon Tan had told the court that once the Firna bonds were redeemed, there would be a bond subscription agreement between Xtron and Firna. Hanafi had also testified to the court earlier that this was a change from CHC-Firna bond to Xtron-Firna bonds, and that the decision to make this change lay with him and Xtron’s director Choong Kar Weng.
The prosecution had earlier alleged that Hanafi did not understand why Firna had to redeem its bonds before maturation, and that he had merely agreed to the plan using funds that Chew provided. The DPP had suggested this was the reason why Sharon Tan and Wee were giving Hanafi specific instructions on the amounts to transfer and when to do the transfer.
Sharon Tan told the court that it was crucial to monitor the flow of funds to make sure that the redemption of the Firna bonds went through smoothly. The emails showing Wee and Tan giving instructions to Hanafi were to “ensure that the redemption of Firna bonds can be done on time, as approved by the board”.
Ramesh also pointed out that in terms of investment, the plan for CHC to invest into the SOF was better than Chew’s previous plan of asking Pacific Radiance, the firm that John Lam worked in, to invest into AMAC to provide the sum for the bridging loan. He also pointed out that in a BlackBerry exchange between the defendants, Serina Wee had asked if monies invested would go back to the church with good returns. Sharon Tan testified that this gave her the impression that Wee was asking this in the interest of the church.
Court will resume at 9.30am on Thursday, Oct 2.
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