City Harvest Church trustee Tan Yew Meng was convinced by a good sales pitch that bond investments in beleaguered music production firm Xtron would be a sound move.
In an extraordinary general meeting in August 2008 attended by executive members of the church, they were given “the understanding that the investment would give us good returns of 4% and S$720,000 (RM1.8mil) a year over a period of 10 years”.
“We are laypersons, but it makes sense to help them (Xtron) to get this loan,” prosecution witness Tan – a lecturer at Singapore Polytechnic – said yesterday in the ongoing trial against church pastor Kong Hee and five others for varying counts of criminal breach of trust and falsifying accounts.
They are accused of misappropriating S$24mil (RM62mil) through sham investments in Xtron and another church-linked firm, and a further S$26.6mil (RM68.8mil) to cover that up.
When various documents that were signed off by Tan were cited, he repeatedly said that he was unaware of any negotiations or deliberations that had gone on in the drafting of the documents.
He said that he had felt the accounts were in good hands managed by fund manager AMAC Capital Partners, which was founded by one-time church treasurer Chew Eng Han – who is also one of the accused.
Deputy Public Prosecutor Tan Kiat Pheng also questioned why Xtron Productions had to take a bank loan of S$10.7mil (RM27.6mil) for the Riverwalk property, after the church had already committed S$18.2mil (RM47mil) in bond subscription agreements.
This, after a bank valuation of the property priced it between S$17mil (RM43.9mil) and S$18mil (RM46.5mil).
The property is used for worship by the church.
He asked: “Did you ever ask the question, ‘Why on earth did Xtron have to take a huge loan of S$10.7mil to purchase Riverwalk?’”
The witness said it had never occurred to him to do so. — The Straits Times / Asia News Network