CHC Trial (Sep 15, 2015) – DPP Oral Submission

DPP’s oral submission

DPP addressing to SC Kenneth Tan’s reply on behalf of Mr John Lam and SC Maniam’s reply on behalf of Ms Serina Wee. 

DDP Chionh: “Mr Tan submitted that the aim behind the sham bond investments was a laudable one; it was to evangelize, the belief of all of the accused persons was that they were doing God’s work, and evangelizing by a tent-making mission.

Mr Tan then goes on to add that the church and its board supported the Crossover Project. This is really also a part of what my learned friend Mr Maniam ended up with in his submissions, that this was really a case of well-intentioned accused who used church funds for church purposes, and that should not and cannot be criminalized.”

The case of Tan Kim Hock Anthony v PP.
The submissions we had made in relation to that case, we say, remain highly relevant for present purposes.
In the case, the appellant was the former principal of Maris Stella High School, charged with dishonestly misappropriating money from the school’s chapel building fund to pay for certain expense, including in particular, the renovation of a building, Champagnat House, which is the official residence of the Marist Brothers in Singapore. By way of background, it is an international Catholic religious order, which founded the school. The appellant himself, Brother Anthony, was a Marist Brother.

In this case, and this was on appeal before the High Court, Justice Chan Seng Onn, the submission was made on behalf of the appellant that it was reasonable for him, as long standing Marist Brother, to have thought that there was nothing untoward in his application of monies from the chapel building fund towards the renovation works at Champagnat House, and this was how the appellant sought to negative any inference of dishonest intent on his part.

In fact, his counsel argued that both Champagnat House and the school itself served in their different ways, one and the same religious mission, and that, on this view, the appellant could not have intended to cause any wrongful loss to the church, because, by improving Champagnat House with the renovation works, he believed that he was thereby benefiting the religious mission that the school was part of. Your Honour sees this at paragraph 7 of the judgment.

Your Honour will see that, in its judgment, the High Court dismissed these arguments on behalf of the appellant. The High Court noted that, although both Champagnat House and the school were no more than local touch points through which the Marist Brothers manifested its presence and advanced its mission in Singapore and that both in essence were owned by the Marist Brothers, the appellant’s submissions, the court said, had to be rejected. Because, among other things, the High Court held this: The appellant had admitted that he was aware that the chapel building fund could only be used for the school’s purposes.

This, your Honour is, in fact, the same situation we have in this case. All six accused persons admit they are aware that the Building Fund could only be used for building expenditure or for an investment.

So in Brother Anthony’s case, the High Cour said, look, the appellant admitted that he was aware that the chapel building fund could only be used for the school’s purposes, and the court noted that the monies in the chapel building fund came from public donations and the Ministry of Education and that the chapel building fund had a clear designated purpose, building a memorial chapel in Maris Stella High School.

In light of this, the High Court found that it was disingenuous for the appellant to claim that he had thought at the material time that it was permissible for there to be a loose intermingling of funds for the use of the school and Champagnat House merely because they advanced the same cause and had a common root in Rome.

Our respective submission is that, similarly, the accused persons in this case, for present purposes, John Lam, but certainly Serina and the other accused, have admitted to knowing that the Building Fund could only be used for building-related purposes or for investment. It is therefore no answer to the sham bond investment charges for the sham bond accused to say that, nevertheless, the building Fund was applied towards a laudable aim; it was applied towards a church purpose.

DPP addressing to SC Tong on behalf of Kong Hee.
DPP Chionh:
It is evident from Mr Tong’s oral reply yesterday that a key plank of Mr Kong’s defence is that Foong Daw Ching and the auditors knew all the material facts, that many CHC staff served in Xtron, that Kong Hee was “the voluntary adviser to Xtron”, that Xtron was dependent on CHC for its business, that Xtron has been insolvent for years, and that the Xtron bond proceeds were going to be used for the Crossover Project. According to Mr Tong, this is the context in which E-269 should be viewed.

With respect, your Honour, contrary to Mr Tong’s submission, E-269 was merely part of a series of deceptions perpetrated by Kong Hee and his sham bond co-accused on Foong Daw Ching and the auditors about the Xtron bonds.


For E-269 itself, you have heard several times our submission, the damning truth is that this was deliberately drafted to conceal from Foong the fact that, among other things, Kong Hee and Ye Peng controlled Xtron.

For these reasons, we submit that Mr Kong’s disingenuous reliance on Foong Daw Ching and the auditors should be rejected.

SC Sreeni on behalf of Tan Ye Peng says about Foong Daw Ching
Now we come to Foong Daw Ching. I find it ironical because the ones who pushed off responsibility as far as Foong Daw Ching is concerned is TFW, where they all came and said, “You don’t need to listen to our managing partner, you don’t need to listen to the partner in charge, you don’t need to listen in fact, “You are wrong in listening to the consultant partner”. Then we had the dancing between the rain drops about why you should talk to the engagement partner ..

So as far as Foong Daw Ching is concerned, if at all there was any evasion of responsibility, it was Mr Foong himself. Your Honour will recall he can’t remember almost anything. He was a witness whom the prosecution had put forth for a limited purpose, but his evidence was enlightening.

Your Honour, I don’t intend to repeat all the key evidence, but I’m just going to highlight evidence that’s both important and representative of the position. The first document ….is TFW-14, the audit papers which counsel for the 3rd defendant had gone through great pains to take out an put.
It is stated by the auditor:
• XPL main activity is in production of music albums etc whose main artiste is Sun Ho, spouse of Pastor Kong Hee.
• Will this be viewed as for personal gain?
• XPL has no good track record to-date (making huge losses for the past few years)
• Potential Issues: Fair values of bonds at year end.
• Potential Issues: XPL ability to redeem the bonds.

Then if we go to the second side of TFW-14, they repeat the point about $7million bonds, XPL’s main activities and its poor track record, and then, under the church’s comments, in the last column,
it says: “These $7m bonds will be converted to 10 years bonds with effect from Aug 08. This $7m bond is part of the $18m bonds XPL issues to CHC..” [This is referring to the ABSA Riverwalk]
Then they have the income projections that will redeem the bonds within ten years.

So what is missing? Nothing, because when Chew Eng Han, in a few minutes back, said, “Listen, the investment was in the album”,

I mean, Xtron was a company, Xtron had the legal obligations, when you invest in something, the money must go somewhere, and, in this case, that money went to the album. TFW-14 shows, crystal clear, that the aditors knew that the money went to the album.
This document is E-269. So we have Tan Ye Peng talking to Serina Wee in BB-19, saying, “Hey, when we write to Mr Foong Daw Ching, can you think of all the risk factors we can tell him?’
If we want to nitpick, and if we want to criticize, we can say E-269 didn’t say this, and E-269 didn’t say that. But your Honour will recall that E-269 was produced by the defence to back up its argument that Foong Daw Ching was asked for advice, and it was put to Foong Daw Ching in his cross-examination. He was twisting and turning, but in the end he was pinned down by E-269.
The prosecution, your Honour will recall, had raised some issues about what was sent, and fortunately we also have the SMS which shows that E-269 was sent.
So when E-269 came up, as part of the defence case put to the key prosecution witness, the prosecution’s tack, which it has been since them, is it never told the whole story about E-269. Of course, it didn’t reflect what has come out in a 140-day trial. But I’m just taking BB-19 to show one thing. If there was a conspiracy, and it is part of the prosecution’s case, to mislead, that the accused persons wanted to mislead Foong Daw Ching and, therefore, your Honour should ignore John Lam and Chew Eng Han and Kong Hee and Ye Peng’s conversations and reliance with Foong Daw Ching, it’s very, very strange. You have, in the midst of preparing the document, one co-conspirator writing to another co-conspirator saying, “Can you put in all the facts that we need about the risk factors?”

[Mrs Light: My older post about Elder Foong Daw Ching]

200,000 album sales figure 
DPP Chionh:
“In his oral reply yesterday, Mr Tong also said that he wished to clarify Mr Kong Hee’s position about the 200,000 album sales figure. Mr Tong said that Kong Hee’s position is that he was aware of a possible projection of 200,000 album sales because it was one of the bases with which Justin Herz suggested that the projections be done. However, Kong Hee says that hew was not aware of this in July 2007 prior to the first Xtron Bond Subscription Agreement being entered into.

Mr Tong says that this position was not challenged by the prosecution. This is untrue, your Honour. In fact, in cross-examination, we had put it to Mr Kong that hew provided the 200,000 sales projection figure to Serina, which she then worked on in July 2007, and Mr Kong disagreed.

Your Honour has seen our detailed arguments on this at paragraphs 586 to 590 of our closing submissions. Your Honour has also seen that, completely contrary to what Kong Hee says, Mr Tan Ye Peng actually testified that the projection of 200,000 album sales in E-1 and E-197 was a figure that Kong Hee told Tan Ye eng and Serina to put into the cashflow for planning purposes.”


Christina Ng and Jimmy Yim
On behalf of Mr Kong Hee, my learned friend Mr Tong has also said that if, indeed, the prosecution felt that Christina Ng or Jimmy Yim was misled, it behoves the prosecution to have called that evidence, and they did not. Our short submission to this is that the argument has no merit, because the accused person’ own evidence on what the lawyers were told indicates that they were misled. A point we have made at paragraphs 165 to 166 of our reply. Since the accused person’ position on the Xtron and Firna bonds from the outset has been to deny the facts demonstrating the sham nature of those bonds, they deny, for example, Kong Hee’s and Ye Peng’s control of Xtron, they deny the Crossover teams’ control of the bond drawdowns and use of the procees since this has been their position on the bonds from the outset, it follows that they must also have taken the same position with their lawyers.

If your Honour agrees with us that the Xtron and Firna bonds were sham, it follows that the accused persons have deceived the lawyers, and cannot, in their defence, rely on their communications with their lawyers.

[To be continue…]