Monday, April 5, 2010

City Harvest ‘told to keep mum on Suntec deal’

CITY Harvest Church has taken a new round of flak over its Suntec deal.

The megachurch disclosed during its weekend Easter services that it received a lawyer’s letter last Thursday from its fellow investors in the consortium holding a majority stake in Suntec Singapore, reminding it to keep to a non-disclosure agreement in the deal.

The church, which recently invested in the consortium, said some investors in it ‘did not appear pleased’ that it had given its members information about its stake in the deal.

‘They felt the church was in breach of its obligation of confidentiality,’ said City Harvest’s senior pastor Kong Hee.

He said that the church had asked law firm Drew & Napier for advice, and the lawyers there warned that if the church made any more disclosures, it may be asked to sell its shares at a substantial discount back to the consortium.

Lawyers not linked to the case but who are familiar with such non-disclosure arguments said although they were common, few wound up in court.

‘Parties involved tend to sort it out among themselves, or seek arbitration with private tribunals,’ said Mr Steve Ngo, a legal consultant specialising in dispute management.

‘If the church wants to avoid all that, and especially a lawsuit, then it will have to do some damage control, right now.’

This development follows City Harvest’s announcement on March 7 that it had bought shares in the downtown convention centre as part of a plan to move into its premises next March.

That the church planned to spend $310 million of its donor funds on this raised public concern. People wanted to know if the church’s move to use the halls for its worship services would constitute a change of use to Suntec. Others asked if the income the church – a registered charity – will receive would be taxed.

A few church members wanted to know exactly how their donations would be spent. As questions piled up, the Commissioner of Charities came on board.

Pressed to give answers, the church responded. It told The Straits Times on March 25 that it would not have exclusive use of any area in Suntec. It also said its shares in Suntec were held by a separate investment company, a non-charity, so dividends would be taxed.

But it was short on details on how the $310 million would be spent. The church had said earlier it comprised the cost of the shares, rent, renovation and other expenses, but resisted giving a breakdown due to the non-disclosure agreement.

It added over the Easter weekend that the sum also included costs for additional Suntec shares it intended to buy later and ‘optional rentals in the coming years’.

Pastor Kong said although the confidentiality agreement barred him from revealing the number and price of the shares the church had bought, the investment was at a sum calculated to yield returns that would cover its rent at Suntec.

Referring to the ‘unfounded allegations’ online that the church was deliberately concealing embarrassing facts from its members, he said: ‘This is furthest from the truth.’

He added it had disclosed ‘all material details’ to the Commissioner of Charities and the Urban Redevelopment Authority.

Last August, Suntec Singapore was bought by ARA Asset Management for $235 million. The consortium owns 80 per cent of the shares, and Suntec Reit, an ARA-managed unit trust, the rest.

The 33,000-strong City Harvest, the largest independent Christian church here, owns a building in Jurong and holds services there and at the Singapore Expo.

Source: Straits Times, 5 Apr 2010

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