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CHC Trial

Wrongful Loss?

[Dear friend, See my reply in blue.

I have included my comments in blue. The Crossover was the church mission, and there was no personal gain. (Agreed statement of facts)

The trial judge found that there is no evidence of any wrongful gain.
To refresh your memory, below is an excerpt from the trail judge’s findings. 

I note that all of them believed that they had acted in what they considered to be the best interests of CHC. There is no evidence of any wrongful gain – that was never the prosecution’s case in any event as the charges were premised on wrongful loss caused to CHC through the misappropriation of CHC’s funds.] 

Dear Mrs Light

This is what I heard from Court on the case on Wrongful Loss. You can share this in your blog:

JC (Justice Chan) asked CO (Deputy Public Prosecutor Christopher Ong, not Cross Over) if it’s a case of wrongful loss where there’s no more funds as the whole lot of funds were expended into something else and so no church were built. And whatever they did, they intended to deplete the funds and would have know that no church could be built.
CO replied that all these amounted to wrongful loss.

But JC asked what is exactly wrongful and asked CO to define it.
CO referred to trial Judge See’s finding that wrongful loss is that they took money out from the BF (Building Fund) to spend on the CP (Crossover Project) or to do the round-tripping, that money was then no longer in the BF or General Fund in the case of the round-trip. Therefore money was no longer available to the church for the purposes that it was meant to be used for.  Basically the church is deprived of those funds because those funds have been used for other purposes. 

[Judge of Appeal Chao quoted an example. In this example, he asked DPP Christopher Ong how would he interpret it and if there was a CBT.

Example
A gives B $10 for a specific purpose to get something. Along the way, he sees a woman and a child in poor condition begging.

DPP replied that it was a clear CBT. He associated this example to being Robin Hood.
Robin would still be convicted despite his good intentions as he ultimately caused a loss.

From what I heard in the court, this is what I caught and my own inference.
I would think that what he was saying is the appellants already have the knowledge of the restriction imposed upon the Building Fund, but they have used the Building Fund for the Crossover. If they used the money for this purpose, that money is deemed to have gone out of the church.
So, the church has been deprived of the money to which it is legally entitled to. Whatever good motive is not important as the legal definition of dishonesty has been fulfilled. It is CBT.

Justice Woo divided the argument into some logical questions:
1. Is there a loss?
2. Is it wrongful loss?
3. Did they know or intend to cause the loss?

The DPP believed all three to be affirmative as the church has been deprived of the money it is legally entitled to. This is due to the decrease in the Building Fund balance. ]

JW (Justice Woo) asked:

Is there a loss? And prosecution is saying temporary deprivation, with or without profit, is still a loss.
But is it a wrongful loss? That would depend on whether you can use money in these bonds, etc and that leads to the question of whether it is genuine investment, etc.
If wrongful use has been established, the next very important question is did they have knowledge that it is wrongful? Then the question of intention comes in.

To the judges, the real question is still whether what they did amounted to a real investment. This raises the question of projection. Are those projections real, realistic? That’s when the contemporaneous evidence will be important.

JA Chao pointed that the court accepted that if the investment went directly to JH (Justin Hertz), there would have been no problem. CO replied that that would depend on whether the purpose of investing in JH company fell within the restrictions of the investment policy.

[Judge of Appeal Chao quoted trial Judge’s finding in para 156. Below is an excerpt from the trail judge’s findings. 

I am prepared to accept that it would have been a genuine investment, and therefore an authorised use of the BF, to have pumped money directly into Justin’s company for the purposes of the Crossover. But in my view it does not follow that the Xtron bonds were a genuine investment even if the ultimate purpose is the same, that is, to fund the Crossover. The material difference between the two situations is not simply a matter of form; the difference of substance is that, in the case of the direct investment into Justin’s company, Kong Hee and the relevant co-accused would be relinquishing any control over the BF monies that they might have had as CHC leaders and staff, whereas in the case of the Xtron bonds they were putting those monies within their complete control. 

So when comes to the argument of investment policy. Prosecution’s case is the investment policy is drafted to facilitate the sham bonds. 

Defence argument is the CHC constitution expressly gave the board the power to invest surplus funds. This means even the funds is in a Building Fund, if the board considers that a certain amount is surplus, it can invest. Mr Foong Daw Ching was the chairman of the task force programme known as social investments.  His advice was for good order draft an investment policy. The investment policy is drafted for good order.

SC Maniam says, “If they had evil intention, they should have done nothing or they should have been advised to do nothing.”]

CO think that the existence of projections is neither here nor there. He thinks the court should look more into the internal projections. (Meaning the 200,000 album sales projection) [No more 200,000 copies argument.  There are many other objective evidence that shows other projections.]  

To the prosecutor, just because there are projections doesn’t make it a genuine investment because the projections can be done in support of their conspiracy. [This is prosecutor's position]
CO also said that there is no evidence that the church members supported the financing of the CP using church funds.

Kenneth Tan, defence for John Lam later replied to the question would the members still support the CP when actually told about the details of the investment. He pointed out that in the agreed statement of facts on 1 Aug 2010 EOGM, the members were told that BF were used for Xtron and Firna Bonds. And the members approved to continue with the CP and authorize the Board to support the mission of the church. He said that was after all the adverse publicity after the CAD and the members still supported it.

[The DPP position is that the appellants are not remourseful in their actions and continue to come up with excuses for their actions. The meeting on 1 Aug 2010, the appellants did not give the full picture to the EMs.]

Since we are still on this issue about Wrongful Loss, I might as well shared something related to that. Did TYP, CEH, SW and ST intended any loss to happen through payment of the GST?

Defence of TYP and ST brought up to the 3 judges that the issue of GST was only brought up for the first time by the prosecution when the 6th accused took the stand. The others were not cross examined on that point. Thus CEH and Sreeni objected during the cross exam at the Sub Court. At that point of time, judge See stepped in and said that he don’t think that the prosecution is saying that they intended to misappropriate. And so, they left it as that. But when it came to the verdict and summary, GST was ruled to be misappropriated.

Besides asking that this finding on GST be disregarded, Paul Seah, the defence for Sharon also went on to explain that GST was duly and rightfully paid as it was not a false transaction because Xtron did provide the Expo premises under the ARLA.

[The prosecution case is that the round tripping accused wanted to remove the bonds (the track) without the auditors knowing that it was done using the church’s own funds.

The trial judge found that the ARLA was not genuine transaction, therefore GST was ruled to be the wrongful loss.

In Eng Han’s EIC he has submitted to the court that, the auditors have a fair and true view of the restructure of debts, and the church funded Xtron in the form of the ARLA, and that Xtron has refinanced Firna. (read my archive)

On September 16, Eng Han reiterated the point on what the auditors can see.

Chew says, “When we did a round-trip, the question is did the auditors then think that the Building Fund was no longer applied to the Crossover?  The answer is “no”, because the bonds were just simply replaced by the ARLA. The ARLA came from City Harvest Church Building Fund.”

If the tracks were supposed to be that the Building Fund was used for the Crossover. He has not covered anything.

Chew says, “I think if I really wanted to conspire to do all these things, this was the worst thought-out conspiracy ever.”

Judge of Appeal Chao agreed with his point on worst thought-out conspiracy. ]

email

What was not reported

Dear Mrs Light,

I have been following the CHC trial closely and attended quite a number of sessions, especially the recent Appeal by the 6 accused [appellants].

There are a quite a number of relevant questions, important facts and contemporaneous evidences presented in the hearing not reported by the press:

- Christopher Ong used an analogy of the Ferrari car to tell the court how the church members were not told that Building Fund were used for the Crossover. This made sense until I got to hear that very same morning that it’s in the agreed statement of fact that the members were told in the August 2010 EOGM that Building Fund were used for the Crossover project. Not only the EM ratified it but they also approved to continue with the crossover project and authorize the Board to support the mission on behalf of the church. This was after the CAD raid.

- After CEH[Chew Eng Han] or Maniam[appeal for Serina Wee] or both of them pointed out that the Constitution allowed the Board to make decision in the investment of Building Fund in whatever may it deemed to be in the best interest of the church, Judge Chan asked if the Constitution empowered the accused to invest without constriction. Yet, by setting up the Investment Policy, it actually constricted them to certain parameters of investment. To me, this is quite an important fact and could determine if John Lam is really the Inside Man as the Prosecution made him out to be.

- CEH read out from the Constitution that the Board is entitled to invest via a nominee. So in my understanding, even if Xtron (nominee) is actually controlled by KH who is acting for the church project, how did control become an issue.

- CEH came up with an interesting concept of what misappropriation means to the public and this resonates to me as a common lay man. Since there is no legal definition of misappropriation, so we rely on the meaning of the dictionary that basically says that misappropriation is depriving the owner of his entitled benefit when you used it for your own benefit. But in this case, all the funds were used for the benefit of the church. He is asking how is it misappropriation from his understanding as a common man. Thus, to him the objective and subjective test of the dishonest misappropriation charges are wrong. It should not be “wrong use = misappropriation = dishonesty”. For the test to stand, it should be theft = misappropriation = dishonesty. And he didn’t steal any money. Instead he said he gave more than $1M and did not charge any fees for the bonds as he is a giver and not a thief.

- Another interesting point to note on the last day of the Appeal. Christopher Ong now said that there is indirect benefit to KH[Kong Hee], being the husband of SH[Sun Ho]. CEH brought up to the Judges that the Prosecutors kept changing their position. CEH had in fact open the gate for them and Judge See to probe into personal gain in the earlier trail but they did nothing to follow up. Now on the last day of the Appeal, they are flip flopping on their position to say there is indirect benefit to KH.

-And lastly, to be fair to KH although I am no supporter of him, his lawyer did produce quite a number of contemporaneous evidence of third party professional assessment of SH with comprehensive and meticulous business plan and sales projection for profit. This was what the 3 judges wanted to see.

I am disappointed to note that the press wrote little, if not at all on the above relevant info, so as to give the public a fair and objective knowledge of what was being heard in the court. I am glad that I am able to attend the court hearing and listen for myself the key arguments of both the Prosecutor and Defence.

I am still figuring out no wonder this is such an odd conspiracy and without precedence, according to the Judges. It’s not a case of the conspirators running away with the money. But one of the basis of the charges is that they are responsible for ensuring that the money comes back to the church.

Mrs Light, if you can check the past trial record for me.
Christopher Ong said on the last day of Appeal that the accused scrambled to put money back as restitution after the CAD raid started. Somehow, I remembered from the previous trial that portions of the money were already paid before the CAD raid?

All I seek as a interested public is a fair trail and a balanced and responsible report.

Thank you.

[Mrs Light’s reply: You can search my old post from my Archives. Choose “September 2014”. You have good memory. What you said was during Kong Hee’s cross-examination days.

ALRA was formally terminated on 31 March 2010.

The CAD raid happened after the ARLA rescinded. All the money was back to the church before the 6 appellants were charged.

DPP position is that the termination of the ALRA flows from the purchase of Suntec as well as Kong’s concerns over the bloggers.

Kong position is that because the advance rental was fully repaid, when the ARLA was rescinded, no loss has been suffered by the church in relation to the debts that first started out as the Xtron and Firna bonds.]

Amicus Curiae’s submission – 15 Sept 2016

Amicus Curiae’s submission.

The hearing of Amicus Curiae’s submission took around 15 to 20 minutes on September 15, 2016.

Young Amicus was tasked to answer 3 questions.
To the best of my understanding, I summarised what Amicus presented to the 3 judges (Judge of Appeal Chao Hick Tin, and Justices Woo Bih Li and Chan Seng Onn)

Kong Hee, Tan Ye Peng, John Lam, Chew Eng Han, Sharon Tan and Serena Wee have been found guilty of charges under section 409 of Criminal breach of trust (CBT). They are appealing to the high court against both conviction and sentence.

What is section 405 and 409 of the Penal Code and Illustration (d)?

Criminal breach of trust
Section 405
Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person to do so, commits “criminal breach of trust”.

Illustration (d)
d) But if A, in the last illustration, not dishonestly, but in good faith, believing that it will be more for Z’s advantage to hold shares in the Bank X, disobeys Z’s directions, and buys shares in the Bank X for Z, instead of buying Government securities, here, though Z should suffer loss and should be entitled to bring a civil action against A on account of that loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.

Section 409
Criminal breach of trust by public servant, or by banker, merchant, or agent
Whoever, being in any manner entrusted with property, or with any dominion over property, in his capacity of a public servant, or in the way of his business as a banker, a merchant, a factor, a broker, an attorney or an agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment for a term which may extend to 20 years, and shall also be liable to fine.

Question 1: Whether a person can be said to have “dominion over property” for the purpose of section 409 of the Penal Code, if it has been entrusted to a number of individuals as opposed to one individual and each individual doesn’t have a total control.

Submission:
The target of this offence is a property offence.
You need to consider whether the accused was entrusted with a sufficient degree of control over the property.

If the accused was able to dispose the property without corporation of external party there is dominion over property. If the accused required 3rd party to approve the disposable then the accused has no dominion over the property.

<He skipped on the question about the rule of precedent>

Question 3: Whether the element of dishonesty is made out in a situation where a person had acted in what he believed would be in the best interests of the victim.

Submission:
He mentioned that, “Motive is not the same as mens rea.” and “Dishonesty in the Penal Code is not the ordinary meaning.”

Illustration (d) to section 405 shows that it is possible for dishonesty to be absent even though there is misappropriation, because dishonesty is the intention to cause wrongful gain or wrongful loss.  Misappropriation, for the purposes of the Penal Code, is just taking or appropriation of the property in a wrongful manner but without the intention to cause wrongful gain or wrongful loss.

He further mentioned that the good faith element in illustration (d) is not really necessary. You can read good faith out of illustration (d) and it doesn’t really make a difference.

He made some analysis points of illustration (d) such as
1. Did Ali had known or believed that bank X shares would have provided a greater return.
2. Did Ali really intend for the returns to go back to Z?

When the transaction was entered into by Ail, when he bought bank X shares, did he believe that it would return more monies than government securities? If the answer is “yes”, he wasn’t intending to cause loss to Z.

When there is a comparable
The crucial factor is did Ali have sufficient facts or are there sufficient objective facts to show that Ali believed that the investment would return something positive or greater than what Z instructed.

When there is no comparable (No Government securities what Z instructed)
The court has to analyze is when Ali makes the investment, did he have sufficient facts to believe that the investments would actually generate a return?

Amicus quoted an example of Ali decides to invest in a company that its whole business is to grow bananas in the Antarctica. It doesn’t work.

He didn’t give a direct answer to the question in court. I would think he was saying an accused person is able to act dishonestly even he had acted in what he believed would be in the best interests of the victim.

Appeal

Five City Harvest Church members (Founder Kong Hee, Pastor Tan Ye Peng, John Lam, Serina Wee and Sharon Tan) and one ex-member (Chew Eng Han), a total of 6 appeal against the conviction and sentence.

Possible hearing dates on
18 July to 31 July 2016
OR
19 September to 23 September 2016.
Judges: Chao Hin Tick, Woo Bih Li and Chan Seng Onn
Venue: High Court

As a Christian, what did you do to help the 6 of them?

City Harvest Church WAS my church. I have left the church and settled in a new church with great mentor now. During the crossover project days, the congregation was told how successful Sun Ho was. Some music charts and videos on salvation through the crossover concert were shown on the screens. Believe me, it was during many church services. The Crossover Project was a church project. I remembered worship songs such as “If You Can Use Anything, Lord You Can Use Me” were sung. I personally thought that God’s hands were in the Crossover project. If you have God in the your project, don’t you think that He is the best guarantor? Who else do you need? To me, it wasn’t about Sun Ho, it’s about God. I thought that the pastors were all godly people. But the success of Sun Ho turned out to be self bought as heard in the court.

To the people who were involved in this “marketing strategy”, you have cheated my faith! Though I have forgiven you, I believe you have to live in your consequences of sins. It’s yet to come. As for Chew Eng Han, I feel the need to stand up for him, as he is a victim and was not part of this marketing strategy team. For those who have been betrayed by your pastors, loved ones or best friends, you will know the groan and understand what I am saying.

As for this court appeal, I suggest that the people, who do not have the facts and cannot verify the truth, to please show mercy to Chew. How many people can truly grasp the case?

I know that Chew is currently also facing another court case; City Harvest Church is suing Eng Han for his personal guarantor’s obligation.
Does the church truly want to see Chew bankrupt? Does the church want to add pressure to his family?

Of course, such an act isn’t vicious at all! It’s totally righteous on their part! If I was not a Christian, I would choose the broad way too, sue City Harvest Church for lying and cheating my faith. Sue City Harvest Church for all my emotional turmoil. Phew!

To end this off on a positive note, I want to thank the following group of people,
1. My friends who have shown love and support to Eng Han and his family.
2. Readers who wrote words of encouragement to Chew.
3. Pastors who went to his office to pray for Chew.
4. All the angels who supported the Chew’s family financially. I know that you do not judge according to appearance. May God bless you.

Lastly, if the content of my blog has upset you, please forgive me. God gave me a brain to think, and I will continue to discern between the right and wrong. City Harvest is definitely a wrong church to go to.

Happy Chinese New Year
Mrs Light