SINGAPORE, July 26 — Rejecting allegations that they have acted in breach of their fiduciary duties, three Workers’ Party (WP) Members of Parliament (MPs) said this morning they will contest the lawsuit brought against them by the Aljunied-Hougang Town Council (AHTC).
In a public statement, WP chief Low Thia Kiang, town council chairman Pritam Singh and vice-chairman Sylvia Lim said they have “acted in good faith and in the best interests of the Town Council and our residents”.
Confirming that they received the individual statements of claim filed by AHTC, the Aljunied Group Representation Constituency MPs said they have engaged law firm Tan Rajah and Cheah to defend them.
They also categorically rejected “all” allegations cited in the lawsuit. The WP MPs’ statement listed out three specific allegations, which they rejected: * That they acted in breach of their fiduciary duties and duties of care and skill owed to ATHC. * That they had set up a faulty system that allowed the appointment of the town council’s former managing agent firm, FM Solutions & Services (FMSS), and made it possible for FMSS and/or officers to benefit themselves. * That they entered into contracts with architects in breach of duties owed to AHTC.
On being asked to give an account of profits made from the appointment of FMSS or pay damages not less than S$1.25 million (RM3.923 million), Low and Lim responded that they have “not benefitted a single cent”.
In the lawsuit, Lim and Singh have also been asked to pay damages of S$2.8 million for the wrongful appointment of architects.
The three WP MPs said they will be furnishing more information during the course of legal proceedings so that “all concerned will be clearer on the issues and why we made the decisions and acted as we did”.
The suit was filed by an independent panel, chaired by Senior Counsel Philip Jeyaretnam, which was appointed in February to recommend the recovery actions the AHTC needs to take over the large sums of improper payments that it had made from its funds. The payments were flagged by the town council’s auditor KPMG in October last year.
The other members of the panel are Senior Counsel N Sreenivasan and Ong Pang Thye, the managing partner of KPMG.
In a report released last October, independent auditors from KPMG found that flawed governance in AHTC led to “improper payments” running into the millions to various parties such as FMSS and service provider FM Solutions and Integrated Services (FMSI).
The panel will consider what recovery actions should be taken with respect to the report’s findings. Under its terms of reference, the panel is to “act in the best interests of AHTC” and “remain independent and impartial at all times”. While it is entitled to seek and consider the views of AHTC or the Housing and Development Board, it should not take any direction from them or other stakeholders.
The improper payments uncovered by KPMG include overpayments for project management fees, overpayments to FMSS for purported overtime and CPF contributions payments to FMSS without certification that work had been performed, as well as payments made without the requisite co-signature of members of the town council.
These amounted to about S$1.5 million, of which at least S$600,000 ought to be recovered by the town council, said KPMG. The report also said the tendering out of the contracts to FMSS and FMSI was “deficient in numerous respects”, particularly in terms of cost.
In its October report, KPMG said it was beyond its mandate to conclude whether any offence had been committed, but noted: “We are advised that, had the shortcomings (identified in) this report been committed deliberately, they could amount to criminal conduct, the implications of which the town council should consider.” —TODAY
