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Ng Jun Sen
Friday, Sep 19, 2014

Singapore

Quizzed by new auditor

The New Paper | Ng Jun Sen | Friday, Sep 19, 2014

Finance manager Sharon Tan

The plan to use Xtron as a vehicle to buy property was approved by lawyers and auditors, City Harvest Church (CHC) founder Kong Hee had told church members in 2008.

His followers, including CHC finance manager Sharon Tan, believed him.

But a new independent auditor took over for the 2008 audits and strongly objected to the plan, warning the CHC board that the books of Xtron and CHC would be merged if they did not comply by the next financial year.

This was against the church's vision for Xtron, said Tan, who was on the stand yesterday.

The church needed Xtron to remain secular and to negotiate property deals on its behalf as banks and developers would not deal with a religious organisation, she claimed.

Said Tan: "I was very puzzled because I was under the impression that the previous audit partners had blessed the whole structure. "Now we have (a) new engagement partner who totally dislikes the whole arrangement."

The new auditor, Mr Sim Guan Seng, had replaced CHC's previous engagement partner following an internal rotation at accounting firm Baker Tilly, which audited the church's accounts.

Mr Sim's objections to the relationship between Xtron and CHC were brought up yesterday when Tan's defence counsel, Mr Kannan Ramesh, quizzed her on Mr Sim's role.

Mr Sim first met members of CHC's audit committee in a meeting on December 2008, which Tan had also attended.

Said Tan: "During this meeting, I recall that Sim questioned the purpose of the original Xtron bond (of $13 million) and inquired about its convertibility feature... he really doesn't like the bond."

The convertibility feature was part of the bond agreement as it was meant to ensure that the objectives of Xtron were aligned to the church, she had told the court on Monday.

Said Tan then: "If there were any mishaps, the church would be able to convert the bonds to shares of Xtron. This is to prevent Xtron directors from going against the visions and objectives of the church."

'COMPLEX ACCOUNTING'

She claimed that Mr Sim was opposed to it as it was a form of bond that "required very complex accounting".

He voiced his objections at another audit meeting on April 2009, which was also attended by Tan's co-accused, deputy senior pastor Tan Ye Peng and former board member John Lam.

Both Tan and Lam had tried to explain the relationship between Xtron and CHC, but Mr Sim would not budge.

"Discussions were intense. He told us that no matter what kind of stories Lam and Pastor Tan can give, he was not convinced because both Xtron and CHC are obviously related," she said.

In the end, the message by Mr Sim: Clear the bonds with Xtron by October, or he would consolidate the books of Xtron and CHC. The trial continues today at the State Courts.

ngjunsen@sph.com.sg

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