Mr Chew Eng Han produced substantial evidence in court to show that Sun’s success in the music industry had been falsified.
Self-purchase of albums
2003 – Attributes Pte Ltd (APL) buys “Sunday” CDs
An email from Serina Wee to Wong Foong Ming and Tan Ye Peng on 6 November 2003 showed Wee discussing “Matters to resolve”, one of them being “Issue 2 – APL‘s profit & loss statement will show a loss of $582K…”
Also, “There was an increase in the publicity expenses & purchase of CDs through APL in the beginning of 2003 for Sunday album. We still have quite some stock left.”
Chew said, “Your Honour, I wasn’t deeply involved in all this, but, from my understanding in the course of proceedings, when I look through the evidence and when I see how APL loses money, despite the high sales of the album, we have very high revenue from album sales and yet APL is losing money. I figure out there may be probably one or two reasons, but one of the reasons is probably that the reason why there’s no profits, despite the huge sales, is because many of the albums were self-purchased. In other words, whichever entity was producing the album was using its own money to buy up the CDs.
And when you buy up your own CDs, of course, you don’t make money — in fact, you incur costs, you incur production costs. So for each year, I think 2002, 2003, and subsequently for Xtron 2004, 2005, 2006, they were all loss-making years, despite Sun’s apparent success, and I believe it’s because much of the money was actually used to buy up the CDs.”
“And this is important, your Honour, because we invest based on track record. We invest based on past historical success. There’s no other way, especially in projects like this.”
But in the course of the proceedings, the more I look at the evidence, the more I realise that the success is not real. It was manipulated, in some cases falsified, and the worst is this, your Honour: we were supposed to be a church. Each time we celebrated her success, Kong Hee would go on stage and say, “Praise the Lord. God is good. God has opened up doors for her. We have the favour of God upon Sun”.
The people have been spiritually deceived as well; they have been short-changed of their faith. And I don’t know which is worse: the money or the faith.
2004 – CHC buys “Lonely Travel” CDs
The next email from Serina Wee to Tan Ye Peng on 2 August 2004 encloses a letter to Foong Daw Ching, saying:
Chew said he was on the board at that time, and most of the board were led to believe that this was the “the end of the season sale for the CD ‘Lonely Travel’ and that there were leftover CDs and that as a means of outreach, could the church buy over the CDs and give it out to believers or non-believers to bless them and to — as a form of outreach to them. And the board approved it.”
However, the board was also given the impression that excluding this purchase by the church, the album itself had already been a big hit. Chew recalled that when asked how many CDs is considered good, Kong mentioned something like 100,000 CDs.
Chew never suspected that majority of the sales were self-purchased as he trusted Kong Hee, Tan Ye Peng and Sun.
2007 – CHC buys CDs through New Life Church
An email from Serina Wee to Tan Ye Peng on 15 March 2007 showed them planning for CDs to be self-purchased again, this time through New Life Church, a church in Taiwan that is affiliated to City Harvest Church, and whose senior pastor is very close to Kong Hee.
The email includes a table of individuals from City Harvest Singapore involved in this self-purchase of CDs amounting to $197,000, of which the funds would come from either City Harvest or Xtron. Chew analysed that assuming each album costs $10, that would translate to 19,700 albums being self-purchased. Kong testified earlier in court that to reach platinum status, an album required sales of 20,000 CDs. “So with one stroke, Sun’s album will hit platinum status.”
Your Honour, if this was only one, a one-time thing, maybe it can be overlooked, but it seems like there’s more than one occasion. And in the end, was it a conspiracy to structure sham bonds or was it a different conspiracy, to show up Sun’s image, to boost her success, her sales, to falsify her success?
2007 – CHC members buy CDs
On yet another occasion, the church’s leaders planned the self-purchase of CDs. Chew referred to an email sent by Kong Hee this time, to Pastor Derek Dunn, Pastor Tan Ye Peng, Pastor Aries and Meng How in April 2007, a few months before the Xtron bonds were issued.
This is the structure of the church:
Church –> Zones –> Zone Pastor –> Zone Supervisor –> Cell Group Leaders –> Cell Group Members
“Really, what Kong Hee was trying to do was to get his zone pastors to coordinate, to buy up CDs and to actually set targets for each zone, so that they could achieve a certain number of purchase of CDs.”
In another email to Meng How and Derek Dunn, Kong writes:
Again, 20,000 CDs would mean platinum status for Sun’s album.
However, Chew did not know of this scheme. Although he was leading a group of 150 people at that time, he was not given a target. He said, “What I knew was that we were to encourage our individual members to support Sun, and that’s it. No coordination, no fixed targets. In other words, no rigging of the markets. If people feel that they love Sun and they want to buy a CD or two, of course, that’s okay. That’s personal support.”
From Kong to Meng How and Derek Dunn again:
Your Honour, I believe in supporting Sun. I believe in having members cough up their own money to buy CDs. I will do it personally. But I do not believe in falsifying success, because if success is falsified, the faith of the members are being robbed, number one. Number two, this was supposed to be an investment. There are people involved in this whole album investment and they bet their lives on that. They put their lives on the chopping board, thinking that Sun is a success. And if they think that Sun is a real success, then, of course, the album is an investment. But if they had known that Sun’s success was not real, then would they have gone in the same way and supported the album investment the same way? Probably not.
2007 – Xtron buys “Gain” CDs
Chew referred to an email in May 2007, just before the bonds were issued.
“So in this email, at the bottom, right at the last line “Increase in Expenses” for Xtron, there’s a line that says “Purchase of Gain CDs, $80,000″. Again, that’s plans by Xtron to use its own cash to buy up Sun’s CDs.”
2009 – Buying English singles with iTunes cards
Meng How writes to Serina Wee on 14 September 2009:
Chew said, “This was money set aside for certain selected individuals that were in the know about this, to use the money to buy iTunes cards and then use the iTunes cards to go and buy up the singles, the English singles, and Pastor Kong knows about it.”
Then on 30 October 2009, Serina Wee in an email to Meng How details the spending on iTunes cards of $21,088.58. The people involved in this self-purchase of Sun’s single are Meng How, Derek Dunn, Sun herself and Mark Kwan, her assistant.
Chew also presented evidence of the sales charts being rigged, referring to an email from Mark Kwan to Kong Hee attaching a weekly sales report of Sun’s US single, “Fancy Free”, and seeking instructions from Kong on whether they should use iTunes cards to buy more singles.
No genuine fan base
Mark Kwan writes to Tan Ye Peng on 10 February 2008:
Chew: “And, your Honour, this is February 2008. 13 million of bonds have been drawn down from Xtron — through Xtron. He’s now talking to Jean Wyclef. He gets me to do a new BSA for Xtron for 11 million, because he says the project is getting bigger, it’s going to be much grander, it’s going to be more successful. But the man that’s in the know, Mark Kwan himself, doesn’t think that Sun has made it. There is a dislodge between what Kong Hee is saying and what one of Sun’s closest workers is saying.”
I didn’t have the knowledge at the time, in 2007 to 2010, as to what was really happening, because I trusted Kong Hee, I trusted Sun, I trusted Tan Ye Peng. But when I look at the evidence in the course of these proceedings, it is quite clear to me: Sun was not a success at all. She had no fan base outside of the church, or very little. Her Mandarin albums were mostly propped up by their own monies, either Xtron or church money. The US singles were self-purchased through iTune cards. And Kong Hee was in the know that all this was happening in the years 2007, 2008, 2009, 2006, 2005. And, surely, in his own heart, in his own conscience, he knows Sun is not ready. If she launches a US album, it will be a flop.
Chew called up a new exhibit, an email written by his wife to the Children’s Charity and Trust Foundation (CCTF) to ask if they had ever awarded a First Day Cover to Sun. Their reply was no.
Kong Hee reluctant to invest in Sun’s music career
Finally, Chew brought up an email from Kong Hee to Tan Ye Peng on 30 August 2006 discussing how Xtron would need advanced 12 months of rental from City Harvest Church, but if it could not be paid on time, Kong said, “I should have enough funds on my personal account to make the loan to XPL on Dec-08.”
12 months’ rental is approximately $2.5 million.
Chew said, “Pastor Kong is saying that he has $2.5 million of his own personal account, that, if the church doesn’t have it, then he will put in his own money. When I read this and I started to think if Pastor Kong has so much money of his own, and surely he should have faith in his own wife and this vision that came from God, why doesn’t he put his own money into the Crossover? Why does he need to risk the church money?”