SINGAPORE - A "secret" agreement between City Harvest Church and a firm it had lent money to took the spotlight again on Wednesday.
In 2008, the church - through its investment manager - signed a contract with glassware manufacturer Firna to invest in the firm's bonds. It eventually lent the firm $11 million through the bonds.
The State believes these were sham bonds meant to funnel church money to finance Ms Ho Yeow Sun's pop music career.
Under the contract, City Harvest could convert its bonds to 40 per cent of the Indonesian firm's shares.
A "secret" letter signed by John Lam Leng Hung, one of the accused, however, promised to sell the shares back to Firna's owners, Mr Wahju Hanafi and his father-in-law, at just US$1 (S$1.30) if this happened.
The prosecution believes this assurance, which weakened the church's financial position, was used to persuade Mr Hanafi's father-in-law to agree to the sale.
A copy of the letter was seized from Mr Hanafi's father-in-law's home here, where Mr Hanafi stays when he is in town. This copy was dated Sept 8, 2008, about a month before the bond contract was signed. Mr Hanafi said he could not recall whether he had seen this copy.
On Wednesday, however, Lam's lawyer Kenneth Tan sought to prove that this copy was irrelevant and Mr Hanafi had not relied on the US$1 promise to persuade his father-in-law.
He argued that Mr Hanafi and his father-in-law had signed an internal Firna document agreeing to the bond contract on Sept 6, two days before the date on the letter.
Mr Hanafi said he had promised his father-in-law that if the church took 40 per cent of the company, it would come from his own 80 per cent share of the firm.
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