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Calvary Enters JV with Property Developer

Calvary enters JV with property developer
After banks reject loans to CCC

At the recent EGM of Calvary Church held on 23 September 2011, the Board of Deacons announced that all their recent loan applications to various Banks to finance the construction of the Calvary Convention Centre (CCC) have been rejected.

Previously, the Church had only managed to secure a RM35 million loan from Alliance Bank and a RM8 million loan from Public Bank. However, the Church is still short of at least RM75 million to complete the project.


The wasteful RM300 million project (Phase 1 and 2) has been plagued with problems after problems since commencement of works. Despite the recent fanfare of the cornerstone-laying ceremony at the site, the ability of the Church to complete the CCC remains in doubt.

Having failed to secure additional Bank borrowings, the Church is now embarking into a Joint Venture with a small Property Developer to develop the 1.75 acre commercial land adjoining the CCC site to build Serviced Apartments. The Developer, Exsim Development is a relatively new industrial park Developer with 2 on-going industrial developments in Bukit Rimau and Kota Damansara. Recently, they ventured into their first condo development at Bukit Jalil called the Treez.


The Joint Venture between the Church and Exsim has been disguised as a sale of land at a highly inflated price of RM55 million with payments staggered until 2015. Deacon Zoo Gin admitted during the presentation that the market value of the land is only about RM17 million. From this, it can be inferred that the difference of RM38 million represents the profit share from the proposed apartment development.

The obvious reason to camouflage the Joint Venture as a sale is for tax planning purposes (defined as the legal form of tax evasion). The other reason is aptly said by Senior Pastor Prince Guneratnam (PG) at the EGM that “we do not want to be seen as going into business”.


Zoo Gin claimed that the Board had consulted a Tax Agent on the tax implications of the sale and the Tax Agent has opined that the sale transaction, although at inflated price, falls under the Real Property Gains Tax and therefore, the gain is not taxable as the Church has held the land for more than 5 years. (If the sale proceeds is recorded as profit share from property development, the entire RM55 million less the original cost of land will be taxable.)


Zoo Gin clarified that the land title will be transferred to Exsim only upon full payment of the RM55 million. Should this be the case, then when the Apartments are sold, the individual Sale and Purchase Agreements will surely state Calvary Church as the Landowner and Exsim as the Developer.


In such a scenario, how then, is the Church going to convince the Tax Department that this arrangement is not a Partnership or Joint Venture and should not be taxable? PG and his Deacons may fool the members but can they fool the Tax Department?


This commonly used strategy of hiding profits from property development in marked-up Sale and Purchase Agreements can easily be challenged by the Tax Department. The Church will run the risk of public exposure and a fine but the worst consequence is the embarrassment it will bring to the Christian community.


The Calvary-Exsim Deal

Exsim will buy the land for RM55 million on a staggered payment basis as follows:-



Upon signing the Sale and Purchase agreement, Exsim pays the church 2% of Purchase Price equal to RM1.1 million. This earnest money is refundable should the Development Order (DO) for Apartment Development not be approved by DBKL. In such an event, Zoo Gin said that with the refund to Exsim, the status would be back to square one.

Exsim will pay the church RM13.0 million in February 2012 from a Bank loan which Exsim will obtain by charging the commercial land to the Bank. Exsim will bear the interest cost on this RM13.0 million loan. This will be a Third Party Charge as the land title would still be in the Church’s name. By this time, the Church would have received RM14.1 million but the land would have been charged to a Bank. Deacon Zoo Gin told the members that this is OK because the land was bought for RM7.0 million and the present value is RM17.0 million.

Exsim will pay the Church RM2.0 million a month from July to December 2012 totalling RM12.0 million and the balance of RM28.9 in quarterly instalments from March 2013 to December 2015.

In addition to the RM55.0 million, Exsim will make a donation of RM1.5 million to the CCC building fund. This donation will be paid in 2013.


The reason why Exsim was chosen

Zoo Gin informed the members that they had 3 proposals from 3 parties namely Seal Group Bhd, E & J (the contractor doing the reinforced concrete work for CCC) and Exsim. Seal Group Berhad did not turn up for the interview because they could not meet the Church’s requirements while E & J is merely a Contractor and not a Developer. Zoo Gin claimed that no other Developer was interested although invited. Therefore, Exsim was the only option.

Zoo Jin said that they have checked Exsim’s financials and found their financial strength to be “sufficient and acceptable”. A member asked him to elaborate with figures. He declined saying that it is not appropriate to disclose at the public meeting. Either he had something to hide or he was simply ignorant of the fact that private limited companies’ financials, shareholders and directors’ details are in the public domain and can be easily obtained from the Companies Commission.

Who is going to bear the risk should this JV deal not work?

Exsim has a very good deal. They only pay a refundable deposit of RM1.1 million for the option to develop the land with absolutely no risk. Even if they take up a loan in their own name to pay the Church the second payment of RM13 million, they are not at risk as the collateral is the Church land. The risk is on the Church. In the event of a default in loan repayment by Exsim, the Church will have to come out with the money to repay the bank or stand to lose the land.


Even if the DO is obtained, there is no certainty that the Apartment Development will sell. In order for Exsim to pay the Church RM55 million and still make a development profit, Exsim will have to build about 400 apartments and sell them for at least RM750,000 each to generate a gross development value of RM300 million, based on an average development profit of 30%. That is certainly a tall order for that locality and during a time of anticipated severe economic downturn by the time the apartment project is launched. If Exsim does not make profit, then the Church may not receive the full sum of RM55 million.

With such risks and the uncertainty of getting the full payment of RM55 million, why then is PG and his Deacons pushing for this transaction?

Rumours of a side deal are aplenty especially since it is an open secret that all, if not most, of the final negotiations with contractors and suppliers and probably in this case, Exsim as well, are done by PG and his son alone. That aside, without doubt, it is definitely a case of pure desperation that PG and his Deacons are willing to take this risk. The clock is ticking fast and money is just not coming in as PG had hoped.

On the EGM, it was good to note that there are new faces who are beginning to ask questions but unfortunately these voices are still few in numbers. Without saying, of course, the supporters of PG at the EGM, shouted praises to God and voted yes to the sale.



Clip #1 : Listen to the 3 Options presented by Zoo Gin.




Clip 2 : Listen to the terms of the JV

Has TOTT Worked?

Many members and ex-members of Calvary Church, KL have been asking this question :-
“Has TOTT (Turn Off The Tap) worked?”.
The answer is a resounding “Yes”.


CT has tabulated the figures below from the Annual Reports of the Church from 2007 to 2010. The total income has dropped since 2007 with the highest drop registered in 2010 of 19% from the previous year. With the expenditure remaining high, the surplus has also dropped since 2007 with the highest drop recorded in 2010 of 30% from the previous year. Similarly, the Faith Promise has also suffered the same fall in income since 2007.


This is clear evidence that when Church members are unhappy, they will “speak out” with their wallets. This should also serve as a warning to all the pastors out there that they ought to conduct themselves and their Church affairs with integrity, transparency and accountability lest they suffer the same consequences as Calvary Church.

TOTT has been giving Pastor Prince Guneratnam (PG) nightmares and scrambling for Bank loans, which he had hoped, to avoid. Despite his constant dose of prosperity gospel, continuous reminders to the members to bring their Tithes and Offerings to the storehouse (Church) and the oft-repeated remark that they should not eat in McDonalds and pay in KFC, the giving by members continue to dip.


The original plan was to borrow only RM35 million to help fund the construction of the Calvary Convention Centre (CCC), however later, the loan amount became RM43 million instead.


Now, with the cost of CCC escalating to RM200 million for just Phase 1 alone and the drop in Church Income , the Church has to borrow an additional RM75 million, making a total eventual borrowing of a massive RM118 million.

The total estimated cost of the CCC is now at RM300 million, an increase of RM150 million from the original approved budget of RM150 million in 2005.


TO RECAP : Click on the links below to read the following previous articles on the CCC :-


Article # 1 : CCC : The Alarming Facts posted on June 20, 2011

Article #2 : CCC: Calvary Convention Catastrophe? posted on June 21, 2011


Article # 3 : CCC Cost Continues to SOAR posted on June 2, 2011




The latest question on everyone’s lips is:-
“Will PG be able to complete CCC?”
The simple answer is “Yes”.

So long as the Church is able to give sufficient collateral to the Banks, the Banks will lend the necessary funds to the Church. Well, the Church does have sufficient landed properties accumulated over the last 50 years to secure the Bank loans.


However, the more important question to be asked should be:-
“If the CCC is completed with the Bank loans, will the Church be able to repay the loans?”
The obvious answer is “No”.


Based on current interest rate of say, 8% for such Commercial loans, the Interest Payable on a loan of RM118 million amounts to RM786,000 per month while the Principal Installment payable over a 10-year repayment tenure amounts to RM983,000.


The total monthly payment of RM1.769 million is way beyond the means of the Church, considering that their surplus per month for 2010 is only RM508,000.


If the loan is stretched to 15 years, the total interest and principal repayment will still be a massive RM1.44 million per month.

This is even before taking into account the cost of maintaining the CCC which is not likely to be cheap.

Based on the present congregation size and income, Calvary Church is surely headed for financial catastrophe. Calvary Church may lose all the properties charged to the Banks and the CCC itself. If this happens, Calvary Church may even go into bankruptcy.


That was what happened to the Crystal Cathedral mega church in USA when it could not service their US$36 million mortgage.

Click on Title below to read the article from Berita Calvary
US Church files for Bankrupcy




Coming back to our present topic, It is always easy to borrow money but the repayment is seldom as easy. With a world-wide recession looming ahead, times will get tougher. Members’ ability to maintain their giving will, invariably, be affected.

PG may have planned to sell off some or all of the Church properties to reduce the Bank borrowing but with the anticipated slowdown in the property sector, the properties will not likely fetch as much value as he had estimated.


This is actually the time to exercise wisdom and refrain from excessive spending and borrowing. The Bible warns against getting into financial slavery and urges the believer to always prepare for bad times. And bad times will come, that’s for sure.


Here's another article posted in Berita Calvary which is worth taking note of : Borrow to Build

Amendment to Church Constitution

At the recent AGM of Calvary Church (CC), Deacon David Peter presented a motion to amend the Church Constitution to include “a new dispute resolution” clause. 

The proposed clause to be included in the Constitution will be known as Rule XVI and basically sets out the procedures on resolving disputes in the Church. The new rule will “make it mandatory for any unhappy member to abide by the stated procedures, instead of subjecting the Church to a very public court process.” 

Although David Peter proudly proclaimed at the AGM that the CC Constitution is the “most advanced Constitution among all the AOG churches in Malaysia”, nevertheless, he admits in the preamble in the motion that the Constitution currently does not have a satisfactory dispute resolution provision. So much for his proclamation of the church having the most advanced Constitution!

Or perhaps what he meant was that the CC Constitution is the most advanced in terms of concentrating total autocratic power in the Senior Pastor whilst paying lip-service to being a congregational church? 

Or maybe, the most advanced in making it impossible for members to initiate any change to improve transparency and accountability in the church and by the church leadership? 

It is certainly the most advanced in ensuring that the Senior Pastor cannot be removed by any means and the most advanced in denying the fundamentals rights of members to voice their opinions or to question the leadership.            

Click on the attachments at the end of the Article to read David’s letter and the motion.

However, by presenting the amendment to the Constitution, indirectly Senior Pastor Prince Guneratnam (PG) and the Board of Deacons are actually acknowledging that the TTG (Truth, Transparency and Governance) Group’s process in their attempt to resolve the ongoing church crisis was correct and scriptural.  

The entire process of negotiation, mediation and arbitration were proposed and attempted by the TTG on many occasions but all efforts failed due to the recalcitrance and defiance of PG. 

The proposed dispute resolution process and the TTG’s various attempts to resolve the conflict are set out below:-

Proposed CC Conflict Resolution Process	TTG’s Efforts to Resolve Conflict (6 Separate Attempts at different times identified as 1 to 6 below. These attempts are numbered in chronological order of time)
Negotiation:  Parties in conflict to write to each other and meet up to try to resolve the issue in conflict.	1. Members of the TTG individually and/or collectively wrote numerous letters and petitions to the Board of Deacons to review a number of issues in contention including the extended ministries and the severely-flawed constitution. They received either no replies or downright meaningless response to their letters and petitions. A number of the TTG members did individually and corporately meet up with the Deacons and Pastors at various times but nothing was accomplished. All the TTG’s negotiation efforts were simply disregarded and ignored by PG and the Board.
	5.  After failure of Steps 3 and 4 by NECF, PG’s lawyer, KK Wong, also tried for out-of-court settlement.  PG’s lawyer requested the Plaintiffs (7 TTG members) to submit a proposal for an out of court settlement to PG and the deacons.  The Plaintiffs complied.   After sitting on the Plaintiffs’s proposal for almost two months, they rejected the proposal without any willingness to negotiate at all. PG’s slap in the face for KK Wong’s effort probably was the reason why the lawyer withdrew from representing PG and the deacons..
Mediation:  If parties fail to resolve the issue through negotiation, then either party can initiate mediation.  Mediator will be appointed by either the General Superintendent or Assistant General Superintendent of the AOG Malaysia.	2.  TTG members agreed to the mediation attempt by a prominent ex-Calvarite and the AOG General Superintendent as co-chairmen. Two days before the pre-agreed scheduled meeting, PG chickened out and informed the co-chairmen that the date was “not convenient”.  The prominent ex-Calvarite gave up in disappointment especially since he had purposely rushed back from an overseas event for the meeting. (This ex-Calvarite who was an ordinary member was then subsequently demoted to an associate member by PG. He has now left CC and moved to another church) To Read CT post click “PG Chickens Out”
	3.  NECF picked up from step 2 and tried to restart the mediation process (after waiting many months in vain for AOG to step in).  The Plaintiffs agreed and supported NECF’s effort. PG did not respond to NECF’s attempts and the mediation failed.
	6.  Plaintiffs made one last attempt at out-of-court settlement and initiated a “court-assisted mediation” with a proposal to drop the entire Originating Summons with only one request which is that the Constitution be reviewed by an independent committee made up of the two sets of lawyers representing the Plaintiffs and PG PG and the Board of deacons, who had agreed to this court-assisted mediation initiative by the Plaintiffs, however, rejected this one simple request and preferred the matter to be tried in court. To Read CT post click “PG Chickens Out Again”
Arbitration:  If mediation fails then either party can initiate arbitration.  Each party to appoint an arbitrator.  The two appointed arbitrators will then appoint a third arbitrator.  If the two arbitrators cannot agree on the third arbitrator, then the GS or AGS of AOG shall appoint the third arbitrator.  Decision of arbitrators final and binding.	4.  After NECF’s mediation attempts (step 3) failed, Plaintiffs agreed that NECF initiate Christian arbitration.  Plaintiffs offered to withdraw the Originating Summons if the issues can be placed before an arbitration panel of Christian senior lawyers and/or ex-judges nominated by NECF acceptable to both parties. PG informed NECF that he was not agreeable to mediation or Christian arbitration.  NECF gave up. To Read CT post click “PG says No to Christian Arbitration”

After more than 2 years, the Constitution Review Committee has only managed to come out with this one proposed change in the Constitution. And this proposed change is not even addressing the core issues of the total lack of accountability and transparency and the abuse of power by PG and his Deacons, which were the primary causes of the crisis in Calvary Church.

The joke of it is that the proposed procedures in dispute settlement as highlighted above is something PG and his deacons do not subscribe to, anyway. 

The purpose appears to be more of an attempt to muzzle the unhappy members and disallow them to refer Church disputes to external parties rather than a genuine objective of wanting to resolve Church issues amicably.

Anyhow, the members at the AGM approved the adoption of the amendment to the Constitution and it is understood that the Church has submitted the same to the AOG Malaysia for their endorsement. 

It should be highlighted here that the approval and adoption of this Proposed Amendment to the Constitution may be invalidated, if challenged in Court due to the breach of the Rules and Procedures set out in the Constitution governing such motions. The breaches are:-

1.  Rule IX (6) (c) requires that such motion must bear the full name and address of the proposer and seconder and duly signed by them. 

If you look at the letter below from David Peter and the motion, there are no details and no signatures of the Proposer and Seconder. David Peter submitted the motion to the Board of Deacons but he did not specify if he was the Proposer or if he was merely submitting a motion he has received from someone else.

2.   Rule IX (6) (d) requires that the Secretary of the Board of Deacons distribute the   motion to all members at least 14 days before the AGM.

      This was not done. A copy of the motion was slotted into the Annual Report,     which was not mailed to the members but was required to be personally collected by the members prior to the AGM. Since not all members collected their Annual Report, many attended the AGM with no knowledge of the proposed motion. The onus is on the Secretary to prove the distribution of the motion to all members at least 14 days before the AGM.

The Proposed Amendment is also not well thought out. It does not spell out what the aggrieved member can do if the Church, Pastor or leader or the AOG General Superintendent or Assistant General Superintendent refuse to cooperate and abide by the rules, that is, if they refuse to negotiate, refuse to mediate or refuse to join the arbitration. It is also not stated what happens if they abide by the procedures but refuses to abide by the decision of the arbitrators. 

It is surprising that David Peter, as a lawyer, is unable to adequately advise his fellow Deacons on the above rules and draft a better crafted Amendment. 

As the Chairman of the Constitution Review Committee, he should make it a priority and a matter of urgency to look into the areas of check and balances that any good Constitution must have. 

He should look into provisions that will safeguard the interests of the members and prevent the unhealthy situation of a Senior Pastor having absolute power and control.  

He should study some of the other Churches’ Constitutions where the spirit of love, justice and respect for the members are embodied, where the need for accountability and transparency is recognized and accepted.

There is no hope for Calvary Church if things do not change. Times have changed, people have changed. The cry for greater transparency, accountability and good governance is getting louder by the day. This is evident in our country and everywhere else. It is indeed “Bersih” time for Calvary Church. If the Board of Deacons do not start the clean-up in God’s House now, God Himself will do it !!

To read click on the images to enlarge

David's letter

Page 1

Page 2

Page 3

Page 4

PG turns nasty as usual at AGM

Senior Pastor Prince Guneratnam (PG) had looked forward to a quiet AGM last Monday, 27 June 2011 on the anticipation that none of the 7 Plaintiffs/Concerned Members will show up at the meeting. He almost had his wish come true until Sister Liza appeared at the AGM.

The 7 concerned members were earlier informed by other members that their names were not on the membership rolls put up on the church notice board. None of 7 also received the usual letter from the church to collect the Annual report and that further confirmed the belief that they had been removed as members. In the late afternoon of the AGM day, another member, who happened to drop by the church, alerted one of the 7 concerned members that all their names have re-appeared on the membership rolls. Hence, the attendance of Sister Liza at the eleventh hour.

1. The AGM proceedings

PG started the meeting with his own house rules. This is a clear deviation from the past where he had always quoted Robert’s Rules for the conduct of the meeting. Robert’s Rules in reality, allows much freedom in expression of opinions, questions and comments during debates on resolutions. However, despite proclaiming to use Robert's Rules in previous AGMs and EGMs, PG has never followed the said rules to the book. Members' rights, especially to speak, are often denied.

He then went on to share his message. He admonished the members to live by faith and walk in the ways of the Lord. He warned them not try to “gain the whole world and lose your soul”. It was ironical, listening to this message. PG needs to embrace the truth of this message much more than the members he was preaching to. It was a case of PG telling the members that there’s a speck in their eyes when there’s log in his (PG) own eye.

The items on the agenda including the appointment of Deacons and Auditors were quickly dealt with, with hardly any questions from the members.


2. The drop in income

Deacon Edward presented the Financial Report and admitted that total income from offerings, tithes and faith promise has been declining since 2008. He alluded this to the challenges and struggles the church has been facing in recent years, avoiding the mention of the church crisis, which is the real cause for the decline in income.

3. The drop in attendance

Deacon Ngeow presented on the church attendance and informed the meeting that the attendance for all the Sunday services have dropped by 13% from 2009 to 2,278 as at end 2010. After discounting the toddlers and babies and taking into account the double counting of the pastoral and church staff and helpers who attends all 3 services, the actual number should be just above 2,000.

It is, therefore, an established fact now that Calvary is no longer the second largest church in Malaysia. FGA remains the largest. SIB, DUMC and possibly Glad Tidings have overtaken Calvary in terms of numbers. Click on the audio clip below to listen:-

4. The Special Resolution

Deacon David Peters presented a special Resolution on the provision for dispute settlement which will be an addition to the Church Constitution. The proposed provision sets out the procedures to resolve conflicts and disputes between the church and the members.

The proposed steps in dispute resolution include negotiations, mediation and arbitration which is exactly ALL the steps the TTG brothers and sisters have undertaken in the last 3 years in their efforts to resolve the crisis in Calvary Church.


David Peters turned comedian where he stated proudly that the Calvary Church Constitution is the most advanced constitution among all the AOG churches in Malaysia!

It is sad indeed that this brother, although a lawyer by profession, does not see that the Calvary Church Constitution is actually the most flawed Constitution among the AOG churches in Malaysia. Click on the audio clip below to listen:-

(Full details of the Resolution will be posted in the next article)


5. The mis-treatment of Sister Liza

After the presentation by David Peters, Sister Liza went forward to express her views on the Resolution. She wanted to explain that the Plaintiffs had, as a matter of fact, attempted and exhausted all avenues of negotiation, mediation and arbitration in trying to resolve the conflict in the church. However, before she could finish speaking, she was abruptly stopped by PG. When she persisted to speak, PG quickly instructed that her microphone be switched off. She was then asked to leave the meeting but she stood her ground and stayed on.

Later, she attempted to voice her objection that the special Resolution was passed without PG making a count of the number of votes in support of the Resolution. This was because such a Resolution which pertains to the Constitution, requires a two-thirds majority before it can be adopted.

PG did not allow her to speak and instead instructed his “bouncers” namely Pastor Susan Tan, Pastor Richard and 2 other leaders to escort her out of the meeting. Sister Liza again refused to leave and was finally left alone.

Listen to PG’s high-handed treatment of Sister Liza in the audio clip below:-

CCC: Calvary Convention Catastrophe?

(EGM Update Part II)

We have tabulated the figures presented to the members at the EGM into the tables below  for easy understanding:-

CCC PROJECT COST  as reported             

	RM’ Millions
Prior to Phase 1A		38.6	Foundation, sub-structure, Nam Fatt’s claims
Phase 1A
- incurred and paid	11.7
- committed and contracted	63.6
Total Phase 1A		73.5	After anticipated savings of 1.8m
Consultants Fees		5.8
Phase 1B
-Preliminary	2.2
-Architectural	11.72
-ID	12.0
-M&E	38.43
-Other Ancillaries	17.7
Total for Phase 1B		82.1
Total for Phase 1A & 1B		200.0

Our Estimated Eventual CCC Project Cost

Land Cost (plus incidentals):		36.0
Phase 1A & 1B		200.0
Phase 2 (estimate)		50.0
Capitalized Interest during construction (estimate)		15.0
Total Estimated CCC Cost		301	excluding loan interest during the 10-year repayment period

If and when the CCC is fully completed, it would be at a whooping cost of RM301 million.

RM301 million for a 5,000-seating church works out to RM60,200 per seat. All the big churches in the Klang Valley incurred between RM8,000 to RM12,000 per seat. A reasonable cost per seat is RM10,000. 

A good example is The Blessed Church in Kuching which is building a 5,000-seating church with a 1,000-seating chapel at a total cost of RM50 million only.  Although the land cost is cheaper in Kuching, the construction cost is higher there.

On average, one can easily build a church that sits 200 to 400 persons for RM2 million. Based on this amount, with RM301 million, we can build 150 churches, which would translate to having a total of 58,000 seats!

Spending RM200-300 million for a church of 5,000-seating capacity is a sheer waste of the Lord’s money. This is a classic example of very bad stewardship and the egoistic ambition of a man.

FORECAST FUNDING POSITION  as reported                            

	RM’ Millions
Total Building Cost		200.0	Partially completed building only
Less: paid up to end 2010		43.3
Balance Funding required		156.7
Funds Available:
At end 2010 Fixed Deposits	26.5
Projected surpluses 2011/12	12.2		Prior to completion of CCC
Secured Bank Loans	43.0		Alliance 35m and Public 8m
		81.7
Balance to be raised		75.0	Additional bank loan being sought

Although the Deacon expressed confidence in securing an additional bank loan of RM75 million, it is easier said than done. Assuming the bank grants the loan at a margin of finance of 70%, the Church will have to provide collateral of about RM107 million to the Bank.

Since the CCC land and the Damansara Perdana (DP) Church building have already been charged to the Banks for the RM43 million loans, the remaining properties are insufficient to obtain an additional RM75 million loan.

REPAYMENT OF LOANS  as reported                    

	RM’ Million
Existing Bank Loans	43.0
Additional Bank Loan	75.0
Total bank Loans	118.0
Repayment:
Share of Condo Project Profit (JV)	(50.0)
Disposal of 5 bungalows in DH	(35.0)
Balance of Loan not repaid	33.0
Members Advances outstanding	6.0
Estimated Loan interest for 10 years	30.0
Balance to be repaid over 10 years	69.0

The Loan repayment of RM69m over 10 years works out to RM6.9m per year or RM575,000 per month. The church claims that the amount is within their ability to repay as this is the average monthly income surplus in the first quarter of 2011.

The assumptions made by the Church leadership are:-

1)   There will be a projected income surplus of RM12.2 million over 2011-2012.

2)  The additional bank loan of RM75 million can be secured

3)   The Condo project JV will generate a net profit of RM50 million

4)   The 5 DH bungalows can be sold for RM35 million

5)   The church will continue to generate an income surplus of RM575,000 per  month for the next 10 years to repay the loans.

Here are some reasons why we have doubts about the Church leaderships’ assumptions and why the assumptions are misleading and not achievable.

1)    The Church’s Income Surplus has been dropping over the last 2-3 years and with TOTT (turn off the tap) stance taken by many members, the surplus can be expected to drop further. Therefore, the projected income surplus of RM12.2 million over 2011-2012 may not be realized.  With even more members leaving after the recent conclusion of the court proceedings, we can expect the offering and tithes to dip even further this year and going forward. The continued lack of transparency and accountability will put off some of the remaining congregation from giving.

2)  As stated earlier, it will not be easy to secure the additional loan of RM75 million. If they cannot get the additional RM 75million loan, they will not be able to even start Phase 1B.  What would have been accomplished then would just be a shell and core of the main building. It may be protected from the elements and deterioration but it will be an unusable building.

3)  It was not explained whether the projected RM50 million profit from the JV is an ‘after tax” or “before tax’ profit. Obviously, any income from non-church activities is taxable. If the projected profit is “before tax”, then the net profit will be less than RM50 million.

However, the more pertinent question is how is the RM50 million profit from the JV achievable?

If Calvary Church is entitled to RM50 million profit, then obviously, the JV partner will also get at least RM50 million profit from the development. To achieve a RM100 million profit from a residential development, the gross development value must be at least RM300 million to be viable.

The small land size of 1.75 acres at a road corner, with its triangular shape, does not provide much flexibility in layout planning. At most, it can accommodate a single tower block of serviced apartments. The configuration could range from a high density 400-unit condo tower to a low density 150-unit tower with prices ranging from RM750,000 to RM2 million each.

The question is would anyone buy such expensive apartments in a middle-class neighbourhood and which fronts onto a congested, busy and noisy highway with poor road access.

4) Targeting to sell the 5 DH bungalows for RM35 million or RM7 million per lot is certainly a tall order. All the 5 bungalows have been converted for church use and are no longer suitable for residential dwelling. Therefore, the buyers will only be paying for the land.

At an average of 6,000 sq ft per lot and at say, a discounted price of RM300 per sq ft (assuming buyers are willing to fork out such a price to live next door to a church), the 5 lots will only generate a total proceeds of RM9 million, which is way below the projected amount of RM35 million.

5)  Based on the current scenario and the dwindling membership, it does not appear that the monthly Income surplus of RM575,000 as anticipated by the church is maintainable. Therefore, the church’s ability to repay the loan is in question.

6) The church has also not factored in the maintenance cost of the CCC. Time and again, the leaders have skirted this major issue. A simple arithmetic will reveal the scary figures. If the CCC costs RM300 million and using basic accounting principles of depreciation of say, over 50 years, it would require RM6 million a year just to maintain the building in its fair condition.

7)  Coupled with the running costs of the massive facility like electricity for the lighting and air-conditioning, this will wipe out all the income surplus, the church is expecting. That means the church will never be able to pay off the bank loans which in turn, means that it is a matter of time, the banks will foreclose and auction off the CCC and possibly whatever properties that are also charged to the banks. CCC can destroy Calvary Church.

The possibility of a financial catastrophe for Calvary Church is real. Borrowing such large amounts to build the CCC monument is akin to subjecting the church to the bondage of financial slavery.  Borrowing and pledging all the assets built up by the members over the last 50 years makes the church a slave to the banks.    

Rev. Susan Tang in her latest book “Prayers in the End Times” wrote:

“Israel was not related to God, they were related only to their religious system and this provoked God to anger.  God felt anger each time they mentioned, not His name, but their temple – that beautiful, gold –laden, majestic and spectacular building.  What is this grand artifact without the presence of God?  Did you know that God allowed this beautiful building to be crushed, defiled and destroyed?

‘Do not trust in these lying words; saying, the temple of the Lord, the temple of the Lord, the temple of the Lord are these.’ (Jeremiah 7:4)”

This is the attitude of the pastors of Calvary Church.  PG’s wife actually told the leaders that after CCC is completed, all those who left will come back because it would be such a beautiful building. PG is also known to have such unscriptural thinking.  He once told a young pastor, “Get the people in, the money will follow.”  He has turned the house of God into a den of thieves.

If CCC is completed with bank borrowings, Calvary Church will continue to neglect the poor for another ten years. Rev. Susan Tang wrote, “God had no intention of taking the poor out of the land.  He purposely left them for us to take care of them because He wanted to deal with our character of selfishness and greed….Modern-day Christianity today hardly does prayers nor remembers the poor on a consistent basis.  We do concerts and rallies and conserve money to build monumental buildings.  The concentration is on the rich, not the poor because the poor have no money to contribute to our church building and when they come, they give our beautiful multi-storey buildings a poor image.  In order to relieve our conscience, we do remember to give them a little hamper, a ‘shoebox’ of goodies, some shoes and clothes at Christmas and then we forget about them until the next Christmas.”

Rev. Susan Tang continues,

God’s word is clear on this:

• wealth acquired with a ‘closed heart’ towards the poor will bring an active curse (Amos 5:11).
• that if we neglect our duty towards them His love cannot dwell in us for neglect of the poor is sin against God (1 John 3:17, James 2:5-9, 5:1-4).
• where we will be in eternity depends on our attitudes towards them (Matthew 25:31-46)
• taking care of them will secure for us blessings from above!  We need not pray for blessings, they will come as we bless the poor.  So much of our ‘bless me’ prayers is useless if we neglect the poor (Psalm 41)”