City Harvest trial: Were transactions manipulated?

City Harvest trial: Were transactions manipulated?

SINGAPORE - Taking money with your left hand and paying with your right.

That was how the prosecution described the transactions between City Harvest Church (CHC) and Xtron Productions to the megachurch's founder Kong Hee on Thursday.

It continued its case that music production firm Xtron was one of two "shell companies" used by Kong and five CHC leaders to misuse more than $50 million of church funds.

Some of the money was allegedly used to fund the music career of Kong's wife Ho Yeow Sun through "sham bonds" invested into Xtron and glass manufacturer Firna.

Kong, who is being cross-examined by the prosecution, is the second accused to take the stand for the defence.

On Thursday, Deputy Public Prosecutor Christopher Ong highlighted examples of how Kong and his deputies "manipulated" transactions between Xtron and CHC.

For example, Mr Ong said Xtron had planned to use money that CHC lent it to repay the bond money owed to the church.

This was based on an e-mail by Serina Wee, one of the accused, who provided accounting services to Xtron.

This e-mail was sent in July 2008, a year after CHC had bought $13 million of Xtron bonds.

In the e-mail, Wee told Kong that Xtron needed to pay the church $4 million in interest from the bonds earned by CHC over the years. Wee suggested using the actual bond money to pay off the $4 million interest.

In other words, Xtron was going to borrow more money from CHC to pay CHC interest, said Mr Ong.

Kong replied: "Yes, but also with the impending view that (Ho's English) album was going to be profitable when launched.

"Ultimately, the album profit will be sufficient to pay off all the principal and interest... of the bonds."

Mr Ong presented another e-mail, sent in March 2009 by CHC finance manager Sharon Tan, that showed there were plans for Xtron to reduce the retainer fees charged to the church by $400,000.

And to make up for that, Tan said: "We can pay back in terms of increasing the retainer, rental, other services from 2011 onwards."

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