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AHTC should seek to recover misused public funds, says HDB

AHTC should seek to recover misused public funds, says HDB

Source: Straits Times
Article Date: 12 Oct 2019
Author: Linette Lai

Pasir Ris-Punggol Town Council also plans to recover monies due in next round of hearings.

The Aljunied-Hougang Town Council (AHTC) should take steps to recover funds that have been misused, the Housing Board said last night.

It was responding to a High Court judgment earlier in the day, which found three Workers' Party (WP) MPs - Mr Pritam Singh, Mr Low Thia Khiang and Ms Sylvia Lim - liable for damages suffered by the town council.

"As public monies are involved, AHTC should take the appropriate steps to recover the monies misused," HDB said. It added it will study the matter further.

In a separate statement yesterday, Punggol East MP Charles Chong said the Pasir Ris-Punggol Town Council (PRPTC) "will take the necessary steps to recover the monies due to the residents of Punggol East in the next round of hearings".

The claims by both town councils centred on the $33.7 million that AHTC paid to its former managing agent FM Solutions and Services (FMSS) between 2011 and 2015.

The civil suit was initiated in 2017 under the direction of an independent panel set up by AHTC to recover improper payments.

PRPTC, which is chaired by MP Zainal Sapari, had also sued to recover its share of losses incurred when Punggol East constituency was managed by the WP-led town council from 2013 to 2015.

The WP had won the seat in a 2013 by-election, but lost it in the 2015 General Election.

In his ruling, Justice Kannan Ramesh had found Mr Singh, the current WP chief, as well as his predecessor Mr Low and WP chairman Ms Lim to be liable for damages suffered by AHTC, which is said to have made millions in improper payments under their watch.

He said Ms Lim and Mr Low had breached their fiduciary duty, while Mr Singh had breached his duty of skill and care in the hiring of FMSS as the managing agent.

This resulted in the town council paying at least $33.7 million to FMSS from July 2011 to July 2015.

During that period, Ms Lim was chairman of the town council, while Mr Low was secretary-general of the WP. Mr Singh, meanwhile, was a member of the town council's tenders and contracts committee.

In his statement, Mr Chong said: "The court said that Mr Low and Ms Lim have acted egregiously, misled town councillors, misled the public, and allowed the town council's money to be improperly spent, profiting related parties.

"The court said that they lacked credibility, and were not honest. Public funds have been lost."

Similarly, HDB said in its statement that the court found some of the defendants had acted "dishonestly and egregiously in their capacity as town councillors".

"It found that the tender process in the town council had been subverted, related parties made money and public funds misused," it said, adding that other town councillors were also held to be in breach of their duties.

Yesterday's verdict brings to a close the first tranche of the trial to determine liability.


BOUND BY DUTY TO TOWN COUNCIL

It must be correct as a matter of law and principle that notwithstanding the political dimension of town councils and the fact that town councillors are held politically accountable to the residents via the ballot box, the town councillors remain bound by a duty of loyalty to the town council, which entails acting honestly, without conflicts of interest, and for proper purposes.

JUSTICE KANNAN RAMESH, in finding that the five defendants, including the three Workers' Party MPs, had owed fiduciary duties to the Aljunied-Hougang Town Council.


WHY NO TENDER WAS CALLED

Following the WP's victory in Aljunied GRC in the 2011 GE, two factors must have weighed on and influenced Mr Low Thia Khiang's thinking. First, his distrust of entities which he perceived to be 'PAP-affiliated' and the need to have them removed from the equation. Second, his desire to ensure the continued employment of the Hougang Town Council staff who had served the WP loyally for the past two decades. Clearly, both these concerns would not be addressed if CPG remained as managing agent for the reconstituted AHTC.

JUSTICE RAMESH, on the reasons why the WP leaders did not call a tender for a managing agent.


NO URGENCY TO WAIVE TENDER

Not only was there no real urgency or necessity in the public interest to waive tender, it would appear that the waiver was really motivated by extraneous considerations, including politics and a misguided sense of loyalty. I am not suggesting that Mr Low Thia Khiang and Ms Sylvia Lim were expected to have no regard to any political considerations in making their decisions, which would surely be unrealistic. However, they were expected to not subordinate the interests of AHTC, not to mention their statutory and fiduciary duties, to their own political interests.

JUSTICE RAMESH, in finding that Mr Low Thia Khiang and Ms Sylvia Lim had acted in breach of their fiduciary duties to act in AHTC's best interests by not calling a tender to appoint a managing agent.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

 

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