$23m financial irregularities alleged; church funds used to support wife’s music career
Emilyn Yap 27 June 2012
Alleged fake donations, tithe transfers and a hidden private fund.
A more than two-year inquiry into City Harvest Church (CHC) has uncovered financial irregularities of at least $23 million, with funds going to support the music career of Ho Yeow Sun, wife of CHC founder Kong Hee.
Five people including Mr Kong were arrested yesterday and will be charged in court today, said the police yesterday.
Ms Ho has not been charged but she is among eight people suspended by the Commissioner of Charities (COC) from holding any job or office at CHC.
COC started its probe on May 31, 2010 and unearthed financial irregularities which took place from 2007 to 2010. At the heart of it all was a “crossover” project, aimed at using Ms Ho’s secular music to connect with people and reach out to non-Christians.
“COC’s inquiry revealed misconduct and mismanagement in the administration of the charity, particularly in relation to the funds that were in the building fund,” COC said in a statement.
The building fund is meant for the purchase of properties for CHC, for renovation, hall rental and other building-related expenses. Funds were used to finance Ms Ho’s music career and “there was a concerted effort to conceal this movement of funds from its stakeholders”.
Unknown to executive members, CHC’s funds were going towards the project. Between December 2007 and May 2010, at least $2.1 million was transferred from CHC to an affiliated church, City Harvest Church Kuala Lumpur (CHCKL), under the guise of donations. CHCKL then transferred the funds to support the project in the United States.
There were also transfers of donations and tithes to CHC to a private fund known as the multi-purpose account (MPA), administered by the charity’s ex-finance manager Serina Wee and the former personal assistant to Mr Kong, Jacqueline Tan. Monies from the MPA then went to the project. From April 2007 to March 2010, around $600,000 and $3 million was used for the purported expenses of Mr Kong and Ms Ho respectively.
Selected donors were asked to transfer contributions meant for another CHC campaign to the MPA. Apart from this small group of members, no other members knew about the MPA. There was even an attempt to hide its existence by closing the joint bank account and dealing only in cash, which was kept in a safe at CHC.
Apart from Mr Kong, those facing charges include CHC board chairman Lam Leng Hung, board vice-chairman Tan Ye Peng, investment manager Chew Eng Han and finance manager Sharon Tan.
All five have also been suspended from holding any office at CHC along with Ms Ho and executive members Kelvin Teo and Jacqueline Tan.
It is alleged that around April 2009, Mr Tan, Mr Chew, Ms Wee and Ms Sharon Tan also came up with a plan to transfer a $600,000 donation to CHC’s building fund to the MPA, via a “refund” of building fund donations. The crossover project needed money, which included US$100,000 to get a media team to publicise Ms Ho’s music career in the US.
CHC drafted letters from the donor and another person, indicating that their donations were meant for specific pastors and employees of CHC as love gifts. The pastors and employees were to receive the “refund” and deposit them into the MPA. Evidence suggested that the “refund” letters were backdated.
There were also schemes to avoid the disclosure of related-party transactions. Between 2006 and 2008, Mr Kong’s company sold over $3 million of merchandise to CHC, but he did not reveal his interest. In 2008, he “refunded” royalties of around $770,000 to CHC, concealed as a sales discount to CHC.
Subsequently though, MPA and CHCKL reimbursed Mr Kong for the purported refunds. His “refunds” were therefore cosmetic, COC said.
COC flagged other governance and control issues which helped CHC to maintain the above-mentioned activities for three years. Evidence suggested that certain CHC board members were “less than prudent” in the discharge of their duties towards the church and its members, COC said. For instance, the appointment of Mr Chew’s investment company was not properly tabled and discussed by the board.
When Mr Chew suffered financial difficulties, CHC refunded donations of about $338,000 to him in two tranches. But the board approved one of them only nine months after the refunds were made.
COC said it will consider taking further action under the Charities Act against the eight individuals it suspended to protect the charitable property of CHC.
As for the five facing charges under the Penal Code, the potential penalties are substantial. All five will be charged with conspiracy to commit criminal breach of trust as an agent under Section 409 read with Section 109. Those found guilty under Section 409 “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”, according to the Penal Code.
Mr Tan, Mr Chew and Ms Sharon Tan will also be charged with conspiracy to commit falsification of accounts under Section 477A.
“I would like to stress that the charges filed by CAD are against five individuals from the City Harvest Church (CHC) regarding the use of church funds. They are not filed against CHC itself. CHC is free to continue its church services and activities,” said Deputy Prime Minister and Minister for Home Affairs Teo Chee Hean yesterday.
Yesterday’s developments again shone the spotlight on governance standards in the charity sector. “The Charities Act, Regulations and Code of Governance are reviewed periodically,” COC told BT. “For example, the Code of Governance for Charities and Institutions of a Public Character was most recently reviewed last year. A current priority is to ensure that the charities are able to meet the recently revised good governance code and practices.”
National Volunteer and Philanthropy Centre CEO Laurence Lien said that most charities practise good governance. “What is perhaps more critical though is good leadership and planned leadership succession.”
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City Harvest Church founder faces the music
$23m financial irregularities alleged; church funds used to support wife’s music career
Emilyn Yap
27 June 2012
Alleged fake donations, tithe transfers and a hidden private fund.
A more than two-year inquiry into City Harvest Church (CHC) has uncovered financial irregularities of at least $23 million, with funds going to support the music career of Ho Yeow Sun, wife of CHC founder Kong Hee.
Five people including Mr Kong were arrested yesterday and will be charged in court today, said the police yesterday.
Ms Ho has not been charged but she is among eight people suspended by the Commissioner of Charities (COC) from holding any job or office at CHC.
COC started its probe on May 31, 2010 and unearthed financial irregularities which took place from 2007 to 2010. At the heart of it all was a “crossover” project, aimed at using Ms Ho’s secular music to connect with people and reach out to non-Christians.
“COC’s inquiry revealed misconduct and mismanagement in the administration of the charity, particularly in relation to the funds that were in the building fund,” COC said in a statement.
The building fund is meant for the purchase of properties for CHC, for renovation, hall rental and other building-related expenses. Funds were used to finance Ms Ho’s music career and “there was a concerted effort to conceal this movement of funds from its stakeholders”.
Unknown to executive members, CHC’s funds were going towards the project. Between December 2007 and May 2010, at least $2.1 million was transferred from CHC to an affiliated church, City Harvest Church Kuala Lumpur (CHCKL), under the guise of donations. CHCKL then transferred the funds to support the project in the United States.
There were also transfers of donations and tithes to CHC to a private fund known as the multi-purpose account (MPA), administered by the charity’s ex-finance manager Serina Wee and the former personal assistant to Mr Kong, Jacqueline Tan. Monies from the MPA then went to the project. From April 2007 to March 2010, around $600,000 and $3 million was used for the purported expenses of Mr Kong and Ms Ho respectively.
Selected donors were asked to transfer contributions meant for another CHC campaign to the MPA. Apart from this small group of members, no other members knew about the MPA. There was even an attempt to hide its existence by closing the joint bank account and dealing only in cash, which was kept in a safe at CHC.
Apart from Mr Kong, those facing charges include CHC board chairman Lam Leng Hung, board vice-chairman Tan Ye Peng, investment manager Chew Eng Han and finance manager Sharon Tan.
All five have also been suspended from holding any office at CHC along with Ms Ho and executive members Kelvin Teo and Jacqueline Tan.
It is alleged that around April 2009, Mr Tan, Mr Chew, Ms Wee and Ms Sharon Tan also came up with a plan to transfer a $600,000 donation to CHC’s building fund to the MPA, via a “refund” of building fund donations. The crossover project needed money, which included US$100,000 to get a media team to publicise Ms Ho’s music career in the US.
CHC drafted letters from the donor and another person, indicating that their donations were meant for specific pastors and employees of CHC as love gifts. The pastors and employees were to receive the “refund” and deposit them into the MPA. Evidence suggested that the “refund” letters were backdated.
There were also schemes to avoid the disclosure of related-party transactions. Between 2006 and 2008, Mr Kong’s company sold over $3 million of merchandise to CHC, but he did not reveal his interest. In 2008, he “refunded” royalties of around $770,000 to CHC, concealed as a sales discount to CHC.
Subsequently though, MPA and CHCKL reimbursed Mr Kong for the purported refunds. His “refunds” were therefore cosmetic, COC said.
COC flagged other governance and control issues which helped CHC to maintain the above-mentioned activities for three years. Evidence suggested that certain CHC board members were “less than prudent” in the discharge of their duties towards the church and its members, COC said. For instance, the appointment of Mr Chew’s investment company was not properly tabled and discussed by the board.
When Mr Chew suffered financial difficulties, CHC refunded donations of about $338,000 to him in two tranches. But the board approved one of them only nine months after the refunds were made.
COC said it will consider taking further action under the Charities Act against the eight individuals it suspended to protect the charitable property of CHC.
As for the five facing charges under the Penal Code, the potential penalties are substantial. All five will be charged with conspiracy to commit criminal breach of trust as an agent under Section 409 read with Section 109. Those found guilty under Section 409 “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”, according to the Penal Code.
Mr Tan, Mr Chew and Ms Sharon Tan will also be charged with conspiracy to commit falsification of accounts under Section 477A.
“I would like to stress that the charges filed by CAD are against five individuals from the City Harvest Church (CHC) regarding the use of church funds. They are not filed against CHC itself. CHC is free to continue its church services and activities,” said Deputy Prime Minister and Minister for Home Affairs Teo Chee Hean yesterday.
Yesterday’s developments again shone the spotlight on governance standards in the charity sector. “The Charities Act, Regulations and Code of Governance are reviewed periodically,” COC told BT. “For example, the Code of Governance for Charities and Institutions of a Public Character was most recently reviewed last year. A current priority is to ensure that the charities are able to meet the recently revised good governance code and practices.”
National Volunteer and Philanthropy Centre CEO Laurence Lien said that most charities practise good governance. “What is perhaps more critical though is good leadership and planned leadership succession.”
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