Auditors not told where money was going

Auditors not told where money was going
Tan Ye Peng told the court that church leaders had the frame of mind to “try to keep this Crossover Project as discreet as possible”.

THE deputy senior pastor accused of wrongdoing with five other leaders of City Harvest Church (CHC) yesterday conceded that church auditors and stakeholders might not have known that investment vehicles were actually being used to fuel the music career of the pastor's wife.

Tan Ye Peng agreed with the prosecution that the auditors were told the money taken from the church's building fund was being used to invest in two companies, Xtron and Firma. They were not told explicitly that the funds would be used to pay for Ms Ho Yeow Sun's US album, he said.

The 42-year-old religious leader admitted this on his sixth day on the stand, following intense grilling by Deputy Public Prosecutor Mavis Chionh.

DPP Chionh alleged that the church's statutory auditors, TFW Baker Tilly, were not aware that investments in Xtron, which was Ms Ho's management company, had the "dual purpose of maximising returns and supporting the Crossover Project".

This project was the means by which the church would spread the gospel through Ms Ho's music.

She also noted that Tan had asked fellow accused Chew Eng Han in a 2008 e-mail whether Ernst and Young - auditors appointed by the Government to conduct a governance review of seven charities - would be able to see what investments CHC had ploughed its building fund into.

"... your concern was actually whether the Ernst and Young auditors would even see that Amac and the church are investing in Xtron. Correct?" asked DPP Chionh, to which Tan agreed.

Amac is CHC's investment manager. Xtron would go on to use the money to fund the church's Crossover Project.

Tan told the court that church leaders had the frame of mind to "try to keep this Crossover Project as discreet as possible".

The six are charged with misusing $50 million of church funds to boost Ms Ho's music career, and covering up the misuse.

The prosecution believes that five of the accused channelled money from the church's building fund into sham bond investments in Xtron and glass manufacturer Firna.

Four of them, including Tan, then allegedly devised transactions to clear the sham bonds from CHC's accounts to mislead auditors.

Tan has repeatedly told the court that church leaders acted only on the advice of lawyers and auditors in structuring the funding of the Crossover Project.

Earlier in the day, DPP Chionh asked Tan if CHC board members were told that Xtron bonds were being used to support the Crossover Project.

Tan replied that board members were told at a board meeting in 2007.

But DPP Chionh noted that there was "absolutely no evidence" in the minutes of this meeting that this information had been shared with the board.

She also noted that at a separate 2007 extraordinary general meeting, executive members of the church were not told that CHC would be investing in Xtron bonds, "much less that the church would be investing in Xtron bonds to support the Crossover". Tan did not dispute this.

The trial continues in its 110th day today.

dansonc@sph.com.sg


This article was first published on Apr 1, 2015.
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