Prosecution asserts Kong Hee never gave thought to Xtron expenses

SINGAPORE - Be bold. Spare no expense. Money is not a consideration.

These were phrases used by City Harvest Church (CHC) founder Kong Hee in e-mails when he discussed the expenses for singer Sun Ho's music career in the United States.

This was highlighted by the prosecution on Wednesday, as it continued its case that Kong and five other CHC leaders had misused church money through "sham bonds" invested into two companies - music production firm Xtron and glass manufacturer Firna.

Some of this money was allegedly used to fund the music career of Ho, who is married to Kong.

Previously during the hearing, Kong, 50, who is the second accused to take the stand, maintained that he had always been "conservative" when settling the budget for his wife's English album.

But on Wednesday, the prosecution asserted that Kong was unconcerned with the expenses of Xtron, which was Ho's artiste manager from 2003 to 2008.

Deputy Public Prosecutor Christopher Ong presented various e-mails sent in 2004 by Kong, who seemed to instruct American music producer Justin Herz not to hold back with the expenses for Ho's American singles.

Kong said on Wednesday that he had said those words to Mr Herz because costs then were still "in the realm of reasonableness".

"The Xtron directors... (were) more willing to spend the money because in those days the singles were... not as expensive as the eventual full album.

"When we moved to the albums, we are talking about multi-million dollars. From that point onwards, I became more and more conservative," he said.

On Monday, Kong had said he did not know Xtron had to repay the $13 million bond money to CHC within two years after it was signed in July 2007.

on Wednesday, Mr Ong presented another e-mail, dated May 2008, which showed Kong telling Mr Herz that it would take six years to recoup the $12.45 million that was sunk into Ho's English album.

Only Recoup in 2014

Mr Ong then asked Kong why he did not find out when the bonds were due to be paid back, given that Ho's English album, which was never released, was slated to only recoup the expenses this year.

"Didn't you hesitate and wonder, hang on, does Xtron need to repay the bonds before that? This would be a major change in the circumstances of the project budget."

Kong replied that the maturity date of the bonds was not highlighted to him and he had then found the budget reasonable.

He added that former CHC fund manager Chew Eng Han had told him that the bonds could always be reissued.

Mr Ong then said: "I put it to you that when you were budgeting, you had no consideration for whether Xtron could repay the bonds because there was no intention... that Xtron would actually be responsible for paying the bonds."

The prosecution also sought to prove that Kong and three of his co-accused were the ones controlling the use of Xtron's funds.

For example, Kong had told co-accused Serina Wee, who provided accounting services to Xtron, to transfer $300,000 to Mr Herz on a short notice.

The court heard that up to half of that amount was to pay for a celebrity hosting a party held at the Hamptons in the US.

Kong said the Xtron directors, whom he said made the final decisions, were only told of this transaction when they were presented with the "Phase 5" budget two months later.

Said Mr Ong: "So there was no standing instruction that if an ad hoc payment like this - $300,000 is not a small amount - that the directors should be informed as soon as possible to confirm that they are okay with it?"

Kong said there no was "no standing instruction".

The trial continued on Thursday.

About The Case

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

This includes $24 million to allegedly fund the music career of Kong's wife Sun Ho, and another $26.6 million 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 megachurch.

Kong, former board member John Lam, finance manager Sharon Tan, ex-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 had sought to show how Xtron and Firna directors had simply done the bidding of the accused.

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 August 28, 2014.
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