Auditor Foong Daw Ching had “coached” defendants on the proper and legal ways to do things while achieving the church’s aim of being discreet, testifies Chew Eng Han.
The CHC trial continued today with Chew Eng Han being cross-examined by the prosecution. CN PHOTO: Michael Chan
This morning, Deputy Public Prosecutor Christopher Ong questioned Chew Eng Han at length about an email in which co-defendant Serina Wee had documented the advice given by auditor Foong Daw Ching. One of the points noted by Wee was that Foong told the team not to say that CHC had full control over Xtron but only some control. Ong questioned Chew as to whether this was what Foong had specifically said.
Chew replied that it was not in these exact words, but Foong knew that the issue of control is subjective and grey; he told them not to go around saying CHC has full control and advised them to try to walk within the gap and not breach the rules.
The prosecution put it to Chew that he was involved in intentionally hiding CHC’s control over Xtron from the auditors, in order to prevent them from asking for consolidation of the two companies or related party disclosures.
The purpose of doing so, the prosecution added, was so that the accused could avoid the bond investments being revealed as sham or not done at arm’s length.
Chew disagreed.
Just as corporations have public relations and investor relations functions to manage their image in the public eye, Xtron was the church’s mission vehicle, explained Chew. It could not go around telling everybody that the church was behind Sun Ho’s pop career, he said.
He said that while there was always a desire on the part of the church leadership to keep things discreet from the public at large, there was nothing to hide from the auditors; Foong knew about the bonds before they were transacted, and in fact he was the first party to have known about it.
Much time was also spent by the prosecution trying to establish that the accused hid the real motive for the Xtron bond investments from the auditors.
Ong challenged Chew, stating that when queried by auditor Tiang Yii, accountant Serina Wee, in her response, had not explicitly stated in the body of the email the motive for the investments- to fund the Crossover Project.
This prompted defense lawyer N. Sreenivasan, who represents Tan Ye Peng, to stand up and state that he found it “disturbing” the prosecution did not point out to Chew that in the same email to Tiang, Wee had attached a document detailing how the bond proceeds would be used- for the financing of music albums productions.
The prosecution believes that the bond investments were not genuine investments; it also took issue with the fact that the church’s investment policy did not contain information about CHC’s investments being used for the Crossover Project—only that it was done for the purpose of maximizing returns.
Chew sought to explain to the court the concept of ‘social investing’- it was common in the corporate sector for companies to participate in ‘hybrid investing’—buying shares in companies that expect to make money while doing good in society.
Foong knew about this hybrid aspect—that the investment was meant to finance the Crossover Project, said Chew.
This morning’s proceedings also saw DPP Ong questioning Chew Eng Han on the degree of control City Harvest Church had over Xtron.
Chew had explained to the court during his examination-in-chief that Xtron was incepted as a vehicle to achieve the church’s vision.
This morning, he told the court that he did not participate in Xtron’s daily operations even when he was a director; he was only involved when it came to the property search. Even then, he only made proposals, not decisions.
The DPP, however, produced emails that showed Chew being consulted on Xtron’s matters; one such instance was when Chew and Tan Ye Peng were asked if Xtron director Koh Siow Ngea should be involved in negotiating with a potential tenant for the Riverwalk unit.
In response to Ong’s question on why the two of them, who were not Xtron staff, were consulted on such matters, Chew explained that he was involved because he did all the liaising work for the Riverwalk property. While the property belonged to Xtron, Xtron was a vehicle for CHC; thus, Chew felt that he had responsibility to ensure that Riverwalk fetched good rental returns. He disagreed with the prosecution that this was evidence of him managing Xtron, saying that it was a service he offered as the fund manager.
The prosecution then put to Chew that Kong Hee, John Lam, Tan and Chew made management decisions for Xtron, to which Chew disagreed.
The DPP also took issue with Chew’s claim that auditor Foong Daw Ching had “coached” them on the proper and legal ways to do things while achieving the church’s aim of being discreet.
Chew reiterated that Foong had known about the sensitivity of the Crossover Project since the Roland Poon incident in 2003; he knew why Xtron was formed and why Sun Ho’s activities were managed by Xtron.
Ultimately, Foong understood that CHC wanted Xtron to achieve the goals of the church yet maintain a distance from it, said Chew.
As such, it could not be that the accused misrepresented details about the relationship between the two entities to the auditors, in order to hide the use of church funds for the Crossover Project, as the prosecution claims.
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