Xtron bonds come under scrutiny

Xtron bonds come under scrutiny
When questioned, Xtron director Choong Kar Weng said he had seen other cash-flow projections that indicated the firm could repay the church.

SINGAPORE - Thr supposed sham bonds at the heart of the City Harvest criminal trial took centre stage on Thursday, as defence lawyers and the state tussled over their legitimacy.

Church members knew about them and approved of their purchase, said defence lawyers. A lawyer from Drew and Napier at the time who drafted one of the bond agreements did not raise any issues with the issuing firm's director.

The focus was on $13 million worth of bonds issued by music firm Xtron Productions which the church invested in 2007.

The state charged City Harvest Church founder Kong Hee and five of his deputies last year for using $24 million of the church's building fund to buy "sham bonds" in Xtron and another church-linked company, Firna, to fund the music career of Kong's wife, Ms Ho Yeow Sun.

They later allegedly used another $26 million to cover up this first amount.

In 2007, church executive members themselves had not objected to the use of the church's building fund for investments in general.

On Thursday, the defence noted that later, in 2010, after the Commercial Affairs Department had started investigations into these bonds, members voted to approve the specific bond transactions retroactively.

Earlier in the week, the lawyers had also noted that an auditing firm which vetted both Xtron and City Harvest also did not raise any concerns over the two entities' transactions to Xtron director Choong Kar Weng.

The state, however, rebutted these claims yesterday, saying that the auditors would have seen these bonds only after they were issued, when they opened the church's and Xtron's books at the end of the financial year.

And while defence lawyers showed on Wednesday that detailed profit and loss projections of Ms Ho's American debut meant the church and Xtron, which was managing her, had put much thought into whether the project was financially viable, prosecutors disputed that.

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