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CHC Trial: Rubber Stamps, Unsold Albums And Phantom Guarantees Explained

Defendant John Lam concludes his time in the witness box today.

In wrapping up her cross-examination of John Lam yesterday, deputy public prosecutor Mavis Chionh had said that his defense in the trial had essentially been one of “I don’t know,” “nobody told me,” and if somebody did tell him, his advice was not sought on that matter.

The first of the six accused to take the stand, Lam had, in July, told the court that, as a longtime member of City Harvest Church, his life had revolved around his family, his job and his church.

During his re-examination by his lawyer, Senior Counsel Kenneth Tan this morning, the court heard that in addition to his day job as an accountant, the former church board member, voluntary treasurer and audit committee member has always tried his best to help the church because the church faces “a lot of demands”.

The prosecution had claimed that Lam’s lack of response to ideas pitched by his fellow co-accused suggested his awareness of wrong-doing. To this Lam explained today that “when I do see that someone is working on a problem, and I do understand because when I work there’s always problems. Just because I see a problem, doesn’t mean… oh, someone is trying to do something … or jeopardise the church, I actually see that people are working to solve a problem. Yes, the album launch is delayed, therefore what must be done? Find a solution.”

He added, “But when I’m not involved in it, it’s not that I do not care or I close my eyes and do not want to hear… I trust them that they’ll be working on it. So in the end, if they come up with different plans, some plans I agree or some plans maybe I don’t understand, it doesn’t mean that I don’t care. It’s just that look, they are still working on it, and as you can see from June, July, August, even I can see from their interaction with me that they are indeed working very hard on it.”

Over the course of his cross-examination, deputy public prosecutor Mavis Chionh had claimed it was “very convenient” that fellow accused Chew Eng Han seemed to “pop up” very frequently in his explanations for why he had done or not done certain things, and accused him of distancing himself from everything and making Chew a “scapegoat.”

Lam’s help had indeed been sought when it came to more complex accounting issues like consolidation and asset impairment, he explained, but while the other accused parties were working on the reissuance of the purportedly “sham” bonds, he would step aside and wait for solutions to materialize.

“And in many of these occasions when I look at the scenarios, it is true I do have trouble understanding it and I have questions because whenever I receive these emails, I’m always at the tail end when the emails are very long and possibly there were already other previous emails.”

“So it’s a fact it’s true that very often I struggle to understand those emails, and even today in this course of proceedings, sometimes I still struggle to understand the plan, but it doesn’t mean that I don’t care. I know they are working on it, when the finalised plan comes out, I’m sure we’ll all deal with it. And I say this because in the end they did find a solution, which is the amended Xtron bond and the Firna bond and I gave my agreement with it,” Lam told the court today.

Addressing the prosecution’s charge that he had conspired with the other accused parties to tap on the church’s Building Fund monies to fund the Crossover Project and to “disguise” it as bond investments, Lam re-iterated the need for Sun Ho’s pop career to be seen as a bona fide success rather than a church-backed icon, in order to fulfil the missional objective of the Crossover Project. “I do not agree that it was a disguise. I agree that it was meant to be discreet,” he said.

WHY HE ALLOWED THE RUBBER STAMP

The DPP had attempted to show that Lam had no say as the director of Xtron and was placed there simply to “rubber stamp” documents. One of the examples she brought up was an email where former church staff Wong Foong Ming asked for Lam’s permission to make a stamp of his signature. Lam explained that the document in question was a monthly budget report and it was one of the procedures put in place when Xtron was first incorporated.

Tan then showed the court an email discussion between Tan Ye Peng, Serina Wee, Wong and Lam talking about the proper protocol for Xtron’s operations when the company first started; the monthly budget report was one of the procedures discussed in this email. The email showed that Wee had suggested having S$10,000 as petty cash but Lam rejected her suggestion.

WHY HE BELIEVED THE CROSSOVER WOULD SUCCEED AND XTRON BONDS WERE SOUND

Another issue brought up by the prosecution was the fact that Sun Ho’s albums did not sell well. She put forth that Lam had no basis of signing the Xtron bonds since the albums were not selling well.

Lam explained again that just because there were unsold albums did not mean that the albums were not selling well. He pointed out that if an album sold 100,000 copies and the other albums in the market were selling less than that, the album was selling well. The record company could have ordered 120,000 copies and the inventory would show 20,000 copies unsold. But the album would have still sold well.

He also told the court that he was told Ho’s first Mandarin album had reached double platinum status, a music industry term used to signify the success of album sales.

WHY HANAFI WAS CREDITOR AND GUARANTOR

As part of the prosecution’s case that the Xtron and Firna bonds were “sham”, it has tried hard to establish the allegation that there never any genuine guarantee in the first place from businessman Wahju Hanafi. Yesterday, the court saw Hanafi’s name listed as creditor in a spreadsheet. If he had given a personal guarantee, why had Hanafi been listed as a creditor instead of being asked to make good his guarantee to indemnify the Crossover? the prosecutor asked.

Posed the same question by the judge this afternoon, Lam recalled that the spreadsheet was put together sometime after CHC had secured a stake in Suntec Convention, its current worship premise, in March 2010.

CHC’s rental agreement (ARLA) with Xtron had been terminated as the church now had its own property and no longer needed to rent worship premises from another party.

As such, Xtron had to reimburse the church the unused portion of rental fees, but since Sun Ho’s US album was only due to be launched later that year, album sales revenue had not yet come in; Xtron suddenly found itself lacking cash on hand to repay the church.

Funds from external creditors, of whom Hanafi was one, were thus sought for cash to seal the Suntec deal. At that time, there was no reason to think that the album would fail to launch, so there was no need for Hanafi’s personal guarantee to kick in; as far as both CHC and Hanafi were concerned, it was a just a personal loan.

This afternoon concludes 10 days on the witness stand for Lam. Examination-in-chief of Kong Hee by his lawyer Edwin Tong next Monday.

Source: The City News Team, CHC Trial: Rubber Stamps, Unsold Albums And Phantom Guarantees Explained, CityNews, http://www.citynews.sg/2014/08/chc-trial-rubber-stamps-unsold-albums-and-phantom-guarantees-explained/, Updated 8:40pm 08/08/2014. (Accessed 15/08/2014.)

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