CHC trial: Finance manager says she alerted co-accused to auditing issue

Are cracks beginning to show among the City Harvest Church (CHC) leaders?

There was Chew Eng Han who said CHC founder and co-accused Kong Hee knew a lot more than he had been letting on.

Now, former finance manager Sharon Tan is saying she had flagged concerns about the alleged round-tripping of church funds. But she said she was repeatedly assured by her co-accused that everything would be "okay".

Tan and five co-accused, including Kong Hee, are accused of misusing millions of dollars of church funds.

Tan told the court yesterday she had asked three times, in a BlackBerry chat with Serina Wee, Chew and Tan Ye Peng, whether the plan to redeem the Firna bonds would raise auditing issues. She took comfort after the trio took turns to reassure her - a total of five times - that the auditors would not have problems with the bond redemption plan.

The prosecution's case is that these were sham bonds, invested into two "shell companies", music production firm Xtron and glass manufacturer Firna. And some of the money was allegedly used to finance the music career of singer Sun Ho.

The prosecution argues that Tan and three of her co-accused, to cover their tracks, then allegedly used more money to cover up the initial amount in a "round-tripping exercise". Throughout the hearing, Tan maintained that the plan to redeem the Xtron and Firna bonds was devised by former CHC fund manager Chew.

It initially worried her, she said during the re-examination by her lawyer, Senior Counsel Kannan Ramesh, yesterday.

As the companies that would be involved in the exercise were related to the church, Tan said she was concerned the "related-party transactions" would lead to auditors forcing the disclosure of CHC's dealings. And that would jeopardise the church's Crossover Project, which needed to be carried out discreetly, and its search for a new building, said Tan.

She said she eventually went along because she was assured that the CHC leaders, including Kong and Tan Ye Peng, auditors and lawyers knew of the plan.

She added that the church board had approved the plan in an October 2009 meeting, even though she had backdated the September 2009 minutes to reflect that decision.

But Tan said the board in September 2009 had approved a similar plan to redeem the Firna bonds.

So even though there was a change to the companies involved, she said: "I thought in essence it was the same thing: To facilitate the redemption of the Firna bonds... that's why I recorded it under the... September (2009) board minutes."

She also said that the board had instructed her to omit "sensitive" details from various meeting minutes.

The trial resumes tomorrow.

About the case

City Harvest Church founder Kong Hee and five others are on trial for allegedly misusing church funds through sham bonds.

First, $24 million was allegedly used to fund the music career of Kong's wife, Ms Ho Yeow Sun, whose stage name is Sun Ho.

Then another $26.6 million was used to allegedly cover up the first amount.

They are said to have done this through music production firm Xtron and glass manufacturer Firna, run by long-time supporters of the church.

Kong, former board member John Lam, finance manager Sharon Tan, former fund manager Chew Eng Han, deputy senior pastor Tan Ye Peng and former finance manager Serina Wee face charges of criminal breach of trust and/or falsifying accounts.

Prosecutors have sought to show how Xtron and Firna directors simply did the accused's bidding.

The defence has argued that the transactions were legitimate, with the accused acting "in good faith" on the advice of lawyers and auditors.

This article was first published on October 1, 2014.
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