CHC trial: Kong asked for MD title on Xtron name card, emails show
- POSTED: 25 Aug 2014 14:23
- UPDATED: 25 Aug 2014 23:38
The prosecution pointed to the request as proof that Kong Hee had control over Xtron, but the church founder says he only asked for the title to help in negotiations with American music producers.
SINGAPORE: City Harvest Church founder Kong Hee had asked for name cards stating he was the managing director of Xtron Productions, it was revealed in court on Monday (Aug 25).
But his co-accused and the church's deputy senior pastor, Tan Ye Peng, told him the title - as a top position in the company - represented decision-making capabilities and this could throw up issues with related-party transactions. Tan suggested it was safer to keep Kong's title as consultant.
This was revealed in an email dated January 2006, used by the prosecution in its continuing bid to show that Xtron was a shell company controlled by the church and being used to funnel church monies to finance the secular pop music career of Kong's wife Sun Ho. Ms Ho's pop music was part of a church-approved bid to spread the Gospel and Xtron was Ms Ho's artiste management firm at the time.
Kong told the court that he had no intention of being appointed managing director of Xtron. He said that only asked for the title as he felt a senior position would help his negotiations with American music producers on Ms Ho's debut English music album.
He also maintained that the church had processes in place to ensure proper governance of its financial transactions. For example, the investment committee's duties would include drafting the church's investment policy, proposing the amount of excess funds to be invested to set targets, and periodically reviewing the church's investment portfolio. Kong added that he had relied on these "internal controls", which also included the church's management board.
Kong and Tan are among six church leaders in the dock for allegedly misusing millions of church monies.
WHO APPOINTED THE XTRON DIRECTORS?
Deputy Public Prosecutor Christopher Ong also produced several emails to show how Kong and his team were responsible for deciding who the Xtron directors would be. He pointed to a 2007 email from the church's former investment manager Chew Eng Han, who said he preferred that the church's investment in Xtron be kept to a "small circle", because of Xtron's proximity to Kong and Ms Ho.
"If one day someone turns away from CHC and becomes nasty, he may say all kinds of baseless things," he wrote in the email to his co-accused Serina Wee and John Lam. Lam was also the head of the church's investment committee at the time.
The prosecution charged that Kong and his deputies would consistently go to auditor Foong Daw Ching with an incomplete picture of the church's transactions and seek his advice, and this was because they wanted to use his responses to gauge whether its main auditor would raise any objections.
Earlier, Mr Ong charged that the directors were chosen because they were in line with the church's vision of the Crossover Project, and that they would lend an appearance of credibility to decisions made that were, in actual fact, made by Kong and his team.
Kong denied this, saying he could only nominate or suggest people for the role, and that he did not give final approval on decisions concerning the financing of Ms Ho's album.
But the prosecutor refuted this, producing an email from Kong to American music producer Justin Herz in March 2008, where Kong said the Xtron directors preferred to let money remain in stocks and bonds.
The church had already invested its monies into Xtron bonds by then.
Kong was unable to give an answer when asked by the prosecutor which Xtron director gave him this instruction, and instead said it was a "total misunderstanding" on his part.
"At this point in time, in March 2008, I was very fuzzy in my understanding of the bonds, and I did not really fully understand the whole process of it", he said, adding that he became more "educated" on how bonds worked from the middle of 2008 onwards.
Kong insisted that contrary to the prosecution's assertions, he did not have "total control" over Xtron, and said he could only nominate or suggest people for the role, and that he did not give final approval on decisions concerning the financing of Crossover Project.
He has maintained that Xtron was an independent, commercial entity operating at arm's length from the church.