AHTC demands accountability, equitable compensation from Workers' Party top brass
Town council alleges payments to managing agent FMSS and service provider FMSI null and void
Aljunied-Hougang Town Council (AHTC) wants some of its most senior councillors - including Workers' Party (WP) chief Low Thia Khiang and party chairman Sylvia Lim - to account for more than $33 million in payments made to its ex-managing agent and service provider.
AHTC alleges in its lawsuit that the payments it made to managing agent FM Solutions and Services (FMSS) and service provider FM Solutions and Integrated Services (FMSI), from 2011 to 2015, are null and void as the councillors had acted in breach of their fiduciary duties - a charge they strongly deny.
It initiated the legal action under the direction of an independent panel it appointed in February to help recover improper payments, as first reported by The Straits Times yesterday.
It is demanding that Mr Low, Ms Lim, Ms How Weng Fan, owner of FMSS, and FMSS, give an account of the $33,717,535 in payments and wants "equitable compensation" for any sum that has been wrongfully paid out.
At the very least, it wants Mr Low and Ms Lim to be liable for a sum of $1,261,773 - which it claims was the difference in fees between the "inflated rates" charged by FMSS and the rates it would have paid under CPG Facilities Managing, the previous managing agent.
The town council, represented by lawyer David Chan from Shook Lin & Bok, set out its demands in a statement of claim filed in the High Court.
The independent panel, which directed the action, is chaired by senior counsel Philip Jeyaretnam and includes senior counsel N. Sreenivasan and KPMG managing partner Ong Pang Thye. (See report at right.)
The WP MPs have denied the allegations.
AHTC claimed that Mr Low and Ms Lim had acted in bad faith and misled other town councillors in order to justify installing FMSS as managing agent without a tender.
They then "set up and/or allowed a system" which made it possible for FMSS and its officers to "benefit themselves".
"No town councillor could have reasonably approved the system, without being in breach of his or her duties," said AHTC.
Besides the three MPs, other parties named in the suit include town councillors Chua Zhi Hon and Kenneth Foo.
The two along with Ms Lim were part of the town council's tenders and contracts committee, which was chaired by Mr Pritam Singh.
AHTC claims these four people breached their duties by causing the town council to enter into contracts in contravention of the Town Council Financial Rules.
In a separate statement, the Housing Board said it is studying the details of the claim and has asked the Attorney-General's Chambers for advice on the lawsuit.
A pre-trial conference has been scheduled for Aug 31.
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AHTC can sue councillors through independent panel
It might seem odd that the Aljunied-Hougang Town Council is bringing a lawsuit against its own town councillors.
But this is possible because the legal action was directed by an independent panel appointed by AHTC in February.
It was created to look into and help recover improper payments made by AHTC worth $6.9 million, which was uncovered by aKPMG audit last year.
The panel is chaired by Senior Counsel Philip Jeyaretnam - whose father J.B. Jeyaretnam was Workers' Party (WP) secretary-general from 1971 to 2001.
The law allows a town council to delegate its powers, functions and duties to an agent such as an independent panel.
Under the panel's terms of reference, it can take actions it thinks are in the best interests of AHTC. This includes prosecuting, filing appeals and acting in legal disputes and suits.
The terms of reference thus allow the panel to take legal action in AHTC's name against town council chairman Pritam Singh, vice-chairman Sylvia Lim and WP party chief Low Thia Khiang.
The other defendants are appointed town council members Chua Zhi Hon and Kenneth Foo, Ms How Weng Fan, as owner of AHTC's former managing agent firm FM Solutions and Services (FMSS) and as the representative of the estate of her late husband Danny Loh, and FMSS itself. - THE STRAITS TIMES