Will CHC 6 have a case to answer?

Defence lawyers and the prosecution team wrapped up their submissions yesterday.

Come May 5, Chief District Judge See Kee Oon will decide if the defence has a case to answer.

It was always going to be a complicated case with terms like round-tripping and sham bonds thrown up in court.

And with countless e-mails and reams of documents pulled up as evidence, the prosecution had to piece together a picture of sophisticated criminal intent.

But that attempt to piece together the evidence prompted defence lawyer Kenneth Tan (representing board member John Lam) to earlier say that the evidence cited was so disparate that the judge "has been asked to draw dots or to colour places which are gaps".

In the prosecution's submissions yesterday, Chief Prosecutor Mavis Chionh connected the dots in an attempt to show that church leaders had committed wrongdoing.

1 Few knew

There were a number of contradictions about the relationship between Xtron, pop singer Sun Ho's former management company, and City Harvest Church (CHC).

Xtron had issued the bond investments. But e-mail exchanges showed CHC founder Kong Hee, his No. 2 Tan Ye Peng, investment manager Chew Eng Han and former finance manager Serina Wee - people with no official positions in Xtron - were "deciding what is going to happen to the bond proceeds and how the money is going to be used", Ms Chionh said.

Only a limited circle knew about the bond details, Indonesian tycoon Wahju Hanafi's guarantee and its counter-guarantee. The board was also kept in the dark about a secret letter, drafted to assure Mr Hanafi's father-in-law.

"The totality of the evidence taken together" was enough to call for the defence to answer the sham bond charges, Ms Chionh said.

2 Round-tripping

Tan Ye Peng had instructed finance manager Sharon Tan, Chew and Wee to work out an early version of the round-tripping scheme, Ms Chionh said.

The information was captured on a white board.

An e-mail exchange showed Sharon Tan telling Chew and Wee "that they have been given one week to do so", Ms Chionh said.

The accused had also fed auditors "a pack of lies" about the transactions, she added.

For example, auditor Sim Guan Seng was told in a 2009 meeting with church representatives that the Special Opportunities Fund (SOF) was a legitimate investment even though the money was not invested in anything.

Mr Sim said in his testimony that board member John Lam "couldn't tell him" what the SOF actually was when asked.

3 Avoided auditor

The defence's stand that what mattered in this case was the auditors' knowledge of the accounts - rather than what was concealed - is startling, Ms Chionh said.

The accused had approached audit firm director Foong Daw Ching for off-the-record meetings when "there was absolutely no reason" to.

They could have voiced their concerns with the actual auditor, Mr Sim, who was working with them.

"Instead (they sneaked) around his back to consult Mr Foong," Ms Chionh said.

Such concealment confirmed that the real purpose of the consultations "was to facilitate... entering into sham transactions and then covering it up".

The only inference to be drawn was that the accused wanted to avoid any investigations "that could lead to the unravelling of their shams".

She added: "This is like the fraudster who manages to hide his own crimes, then trying to rely on his success in hiding that crime to exonerate himself."

Defence: Knowledge of wrong use is not dishonesty

Former finance manager Serina Wee had no case to answer when it came to dishonesty, said her lawyer Andre Maniam, as "church money was used for church purposes".

Having knowledge of wrong use does not equate to dishonesty.

Honesty or dishonesty depends on the "state of mind", he added. And the accused had the church's benefits at heart.

Wee also had no intention of defrauding auditors, Mr Maniam said, citing various examples. For instance, information about the church having a close relationship with Xtron, the company that used to manage pop singer Sun Ho, was made known.

Bond proceeds meant for the Crossover Project - the mission to use pop music to evangelise - were used for the project in question.

Added Mr Maniam: "There was no hiding of the true purpose of the bonds, (which) was always made plain to the auditors."

Hence, he argued, the evidence the prosecution presented could not support allegations of "sham" transactions or there being wrongful loss to the church.

Wee was simply acting to further the church's objectives, he said.

This article was published on April 10 in The New Paper.

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