Workers' Party MPs Court Case against Aljunied-Hougang Town Council (AHTC)



Parliament: Wrong to compare lapses at public agencies to problems flagged by AHTC auditors, says Chan Chun Sing
Govt's accounts found to be in order, says minister, who cites 3 differences between the cases
By Rachel Au-Yong,  Political Correspondent, The Straits Times, 21 Nov 2018

It is wrong to compare the problems surfaced by auditors at the Workers' Party's (WP) town council to the lapses discovered by the Auditor-General's Office (AGO) at the People's Association (PA) and other public agencies, Trade and Industry Minister Chan Chun Sing told Parliament yesterday.

Mr Chan, who is PA's deputy chairman, said the Government's financial accounts were found to be in order, with public funds properly accounted for, unlike the accounts of Aljunied-Hougang Town Council (AHTC). Three MPs overseeing AHTC are facing a civil suit over $33.7 million in alleged improper payments.

The minister was responding to WP MP Png Eng Huat (Hougang), who asked about various lapses made by the PA in the AGO's report for financial year 2017/18.

"The issues surrounding AHTC are very different from the lapses found by AGO in government agencies," Mr Chan said.



He cited three differences.

One, AHTC's accounts have been found by its auditors to be unreliable since FY 2011/12.

"Your auditors repeatedly gave the town council a disclaimer of opinion as they were 'not able to obtain sufficient, appropriate audit evidence to provide a basis for an audit opinion'," he told Mr Png. When the AGO audited the town council in 2015, it concluded there was "no assurance that AHPETC's accounts are accurate and reliable or that public funds are properly spent, accounted for and managed", he said.

In contrast, the AGO has consistently given the Government an unmodified audit opinion on its financial statements. This means they are reliable, but does not mean there are no mistakes, he added.

Two, a KPMG report on AHTC's accounts had said the "control failures" were pervasive and cut across key areas, including governance and financial control, over the course of five years.

"The Government does not face similar issues," Mr Chan said, noting "rules and procedures in place to ensure proper systems of checks and balances". He added: "The difference is this: Our rules are in place. When compliance is not in order, we take officers to task and we can improve and tighten up the system."

Three, government agencies responded to lapses uncovered by the AGO by taking firm action against the individuals responsible.

Some did so when problems were surfaced in internal audits. Where criminal offence is suspected, agencies promptly escalate cases, he added, citing how, following the AGO flagging possible procurement wrongdoings at the National Library Board in 2014, the case was referred to the police and a former officer was charged with corruption.

There are other such cases, he added. "We don't hide them. We don't sweep them under the carpet. We face them squarely and we take the actions necessary," he said.



Mr Chan reiterated that the lawsuit against the WP MPs was not brought by the Government but by an independent panel.

He stressed the Government has proper rules to ensure checks and balances, including at the PA. "The fact that we run a large system with many volunteers does not excuse us from making mistakes. But when we make mistakes, we find out, we tighten the process, we improve," he said. "The public can have every confidence that this government takes its responsibility seriously, transparently."

Mr Png had also asked why the PA had six consecutive years in which its accounts received an "adverse opinion" and many years of qualified accounts before 2007.

Mr Chan disputed this, and repeatedly stressed the difference between qualified and unqualified accounts. While both may have mistakes, an unqualified statement is one that people can trust, he said.

"PA has made mistakes, we accept, we acknowledge and we will rectify and put it right," he added. "But at no time was it ever suggested that the set of accounts cannot be trusted."

Mr Chan later clarified that the PA's accounts for grassroots organisations were not consolidated before FY 2012/13, which is why the auditor had said it did not "fully comply with the standards".

"We have since taken steps to consolidate all 1,800 grassroots accounts into PA's financial statements to be in full compliance with the auditing standards, and PA has received an unqualified audit opinion since 2013," he said.













Police investigating claims made by ex-PA officer for overseas buys
By Rachel Au-Yong, The Straits Times, 21 Nov 2018

The police are looking into the case of a People's Association (PA) former staff member who made questionable reimbursement claims for overseas purchases for Chingay 2017, Trade and Industry Minister Chan Chun Sing said yesterday.

The Auditor-General's Office (AGO) said in July that the claims were accompanied by documents with "tell-tale signs" that cast doubt on their authenticity.

The officer had asked to be paid back for clothes and accessories bought overseas worth $142,000.

But there was no assurance that the reimbursement claimed by the officer was the actual amount he paid for the items, the AGO said.

Mr Chan, who is PA deputy chairman, told Parliament that an independent panel to check on past overseas Chingay buys and payments had completed its investigations.

"While there was no conclusive evidence there was wrongdoing, there were concerns over the authenticity of some transactions," he said, adding that PA had referred the matter to the police. "We will decide on further steps after the police complete their investigations."



Mr Chan was responding to Mr Png Eng Huat (Hougang), who had asked about lapses by PA that were flagged in the AGO's report.

Mr Chan said the failure of the PA to factor in additional costs in the tenders for a Mid-Autumn Festival event in 2016 and one for Chinese New Year last year was an "administrative lapse" that had since been rectified. It resulted in the organiser of the events paying over $30,000 for expenses such as transport, as the successful bidder requested.

Mr Chan said the organiser was well aware of these additional expenses as it had been bearing the cost every year, which averaged $34,000 for each event from 2014 to 2016. However, he acknowledged the "inadequacy" of not considering the total costs in a tender.

"The organiser has acknowledged the lapse and put in place measures to avoid its recurrence," he said.

Mr Chan added that contrary to how Mr Png phrased his question, the AGO's report did not make any mention of "additional costs that were hidden in the award of contracts to the overseas tenderer".

He also noted that the AGO's observations for these events were not mentioned in past external audits.

In fact, he said, the PA's own internal audit had earlier identified that the practice of overseas procurement for Chingay did not fully comply with approved procedures, and these were immediately stopped early last year, before the AGO's audit.

Mr Chan said the PA took a serious view of the matter, and will continue to educate staff, improve practices and simplify the rules so they are easier to follow. He said: "Procedures adopted by PA must be simple, robust but not onerous... We will continue to balance the need for agility and accountability."





AHTC wrap-up: What are the 2 lawsuits about?
By Adrian Lim and Rachel Au-Yong, The Sunday Times, 4 Nov 2018

The first tranche of two multimillion-dollar civil lawsuits against three Workers' Party (WP) MPs and five other defendants wrapped up last Tuesday, after a 17-day hearing in the High Court.

WP chairman Sylvia Lim, former chief Low Thia Khiang and secretary-general Pritam Singh took the stand to defend themselves against allegations that they had breached their fiduciary duties in the running of Aljunied-Hougang Town Council (AHTC).

The case centres on $33.7 million that AHTC paid to its former managing agent FM Solutions & Services (FMSS) and service provider FM Solutions and Integrated Services, between 2011 and 2015. The payments are alleged to be improper and void.

AHTC - directed by an independent panel - is suing to recover monies from the eight defendants: the three MPs, two town councillors, FMSS and its two owners.

The other suit is by Pasir Ris-Punggol Town Council (PRPTC), to recover any losses allegedly incurred when Punggol East constituency was managed by the WP-led town council. The WP had won the seat in a 2013 by-election but lost it in the 2015 General Election.

In all, 14 witnesses were called and questioned by lawyers, resulting in robust exchanges and debates, as well as unexpected disclosures before an often-packed public gallery.

Political correspondents Rachel Au-Yong and Adrian Lim recap the key issues and highlights.

HOW IT STARTED

The WP became the first opposition party to win a GRC when it wrested Aljunied GRC from the ruling People's Action Party in the May 2011 General Election. It also retained its Hougang seat.

AHTC was formed later that month. But from the start, it was unable to submit accounts without qualifications. In 2014, the Auditor-General's Office (AGO) carried out a special audit which uncovered significant lapses of governance.

The Court of Appeal later directed AHTC to appoint a Big Four accounting firm to help fix the lapses and ensure compliance with the law.

After looking into the town council's accounts, KPMG identified 71 instances of non-compliance with regulations, on top of the 115 areas uncovered by the AGO.

AHTC then appointed an independent panel to review the findings of the KPMG report.

Last year, the panel directed AHTC to file a lawsuit to recover any improper payments made to FMSS.

PRPTC appointed PwC to look into AHTC's books, and later filed suit against eight defendants.

PLAINTIFF ARGUMENTS

AHTC lawyers allege that WP's Ms Lim and Mr Low had breached their fiduciary duties and duty to act in good faith when they appointed FMSS as the town council's managing agent in 2011.

FMSS was run by WP supporters: Ms How Weng Fan and her late husband Danny Loh. Both held key positions in AHTC - Ms How was deputy secretary and general manager, and Mr Loh was secretary.

There was also inadequate disclosure of this conflict of interest to other town councillors when the decision was made to appoint FMSS, the lawyers added.

The waiver of a tender was unjustified, and Ms Lim and Mr Low had also set up or allowed a system which facilitated or contributed to improper payments to FMSS, the AHTC's lawyers said.

AHTC is also seeking compensation from Ms Lim, Mr Pritam Singh and town councillors Kenneth Foo and Chua Zhi Hon for breaching their duties as members of the town council's tenders and contracts committee. This was because of contracts the committee awarded to a more costly architect consultant, resulting in AHTC paying an alleged $2.8 million more.

PRPTC is also seeking to recover monies which lawyers said the town council could have saved by extending the contracts of existing vendors, instead of calling fresh tenders and giving them to higher-priced firms.

PRPTC lawyer Davinder Singh charged on the first day of the hearing that the checks and balances at AHTC were "so lacking and flawed that it allowed conflicted persons to enrich themselves almost at will".





DEFENCE ARGUMENTS

The WP MPs and town councillors say they acted in good faith and in the best interest of residents. They say the MPs are given latitude to run the town council according to broad and general rules laid down by the law.

Also, the claims sought by AHTC and PRPTC are based solely on the KPMG and PwC reports respectively, and do not take into account the circumstances at the time the MPs and councillors made their decisions.

Ms How and FMSS say proper payment controls were in place, with AHTC chairman Sylvia Lim being the approving authority. Among other things, Ms How and Mr Loh cannot be regarded as having fiduciary duties because they worked under the direction of the town council and its chairman, and their appointments in AHTC were administrative in nature.

WHAT'S NEXT

In March next year, the lawyers for the town councils and defendants will give their closing statements. It will be some time later before Justice Kannan Ramesh delivers his verdict.

If the defendants are found to have breached their duties and made improper payments, a second round of hearings will start to decide what ought to be paid. It will likely stretch out for most of next year.

If the WP MPs are found liable and cannot pay up, they will be made bankrupt and lose their parliamentary seats. Last week, however, the three WP MPs, in their personal capacity, raised more than $1 million in three days for their legal fees in a crowdfunding effort.

KEY DATES IN AHTC'S SAGA

May 7, 2011: Workers' Party (WP) wins Aljunied GRC in a general election.

May 12, 2011: Ms How Weng Fan's husband Danny Loh applies to register FM Solutions & Services' (FMSS) company name.

May 13, 2011: Ms How sends a letter, with Hougang Town Council's (HTC) masthead, to Aljunied Town Council, saying "we" have been instructed by WP to take over the town council.

May 30, 2011: CPG tells Aljunied-Hougang Town Council (AHTC) it wishes to terminate its contract, which has another two more years.

June 2, 2011: FMSS presents a proposal on providing managing agent services but this is circulated only among the elected MPs.

June 10, 2011: Action Information Management (AIM), the software company CPG uses, says it will give a one-month notice of termination. AIM does so 12 days later, but extends its services to Aug 31, and later, at AHTC's request, to Sept 9.

June 15, 2011: FMSS takes over HTC's staff, through a formal replacement of their employment contracts.

June 22, 2011: FMSS sends AHTC a letter of intent.

July 15, 2011: FMSS starts work as managing agent for AHTC.

Aug 1, 2011: CPG's last day.

Aug 4, 2011: AHTC meets for the second time since its formation, and appoints FMSS as its managing agent and waives calling a tender.

June 19, 2012: Ms Lim e-mails FMSS' owners to give a "heads up" they would need to justify their higher rates at a town council meeting.

July 14, 2015: FMSS stops work at AHTC.





On the stand: Workers' Party leaders fight allegations in courtroom battle
The Sunday Times, 4 Nov 2018

LOW THIA KHIANG

On the witness stand for a total of 11 hours, stretched over three days

Senior Counsel Davinder Singh charged that Mr Low released CPG from its contractual obligations as a managing agent without checking what those were, a move that put "political supporters (referring to FM Solutions & Services) ahead of residents' interests".

Mr Low acknowledged he did not make the necessary checks, which he agreed was part of the duties of a "responsible town councillor".

Another point Mr Singh made was that Ms How Weng Fan wrote a letter to CPG more than two weeks before the incumbent managing agent said it would leave, giving CPG the impression that the MPs had decided to manage Aljunied-Hougang Town Council (AHTC) in-house. He called it a "calculated" move to avoid calling a tender and risking an agent other than FMSS getting the job.

Mr Low disagreed, saying it was a contingency. He added later that he had anticipated CPG's pullout.

He also said, when cross-examined, that he did not think it was a "big deal" that he and Ms Lim failed to disclose an apparent conflict of interest: that Mr Danny Loh, whose business provided maintenance services to Hougang Town Council, was married to AHTC's then-deputy secretary, Ms How.

Mr Low said he and Ms Lim may have missed the issue as they were busy at the time. Mr Singh countered that it was a serious matter, since it was before the courts.

Mr Low later conceded it was so, but disagreed with Mr Singh that he and Ms Lim "suppressed" the information from the town councillors.

The following day, Mr Low made the unusual move of clarifying his previous day's testimony when he repeatedly said he was "uncomfortable" about CPG's presence if its executives were to sit in on a July 21, 2011 meeting, but could not tell Mr Singh why.

Although Mr Singh took issue with the fact that Mr Low was volunteering information, Justice Kannan Ramesh allowed it. Mr Low explained that he did not trust one of the CPG representatives, Mr Seng Joo How, owing to their previous dealings when he was the newly elected MP for Hougang. Mr Seng was a Housing Board official "who was supposed to help but didn't seem to do so", Mr Low said. Mr Singh said Mr Low had made up the evidence overnight.


SYLVIA LIM

On the witness stand for 4½ days

Mr Davinder Singh said Ms Lim "knowingly and deliberately" perpetuated a false impression that AHTC was forced to upscale its computer system. While she conceded that some work related to upscaling had taken place before the PAP-owned software firm Action Information Management terminated its contract, she disagreed she had lied to her "fellow town councillors, Parliament and the court", as Mr Singh had charged.

Ms Lim and Mr Singh had several protracted exchanges throughout her 4½ days on the stand, during which Mr Singh described her as an "obstreperous witness" and said she was trying to buy time to answer his questions.


One issue he said she was stalling on was when he asked if she and Mr Low had decided shortly after the 2011 General Election to appoint FMSS without calling a tender.

He could not get a straight "yes" or "no" answer. The answers she gave were qualified.

On the third day of her testimony, however, she admitted she and her fellow MPs had breached their duties by failing to disclose managing agent FMSS' rates to the rest in AHTC so that they could make an informed decision. But she conceded only after a 35-minute verbal tussle with Mr Singh that led to Justice Ramesh stepping in.

Another area where the cross-examination dragged on was when Mr Singh said Ms Lim had lied in a media statement and to the entire nation in August 2011 that FMSS would not incur any additional agent fees. But she had omitted a one-time fee FMSS had charged the town council for hiring additional staff.

Ms Lim insisted multiple times she had no intention to mislead, but after several rounds of back-and-forth, including when Mr Singh asked if to knowingly state an untruth is to lie, she said yes.

The court also heard that Ms Lim, in her own words, gave FMSS' major owners a "heads up" on the need to justify to AHTC their new rates for a 2012 managing agent tender. The rates were higher than that of their initial one-year contract, for which the tender was waived.

Mr Singh said what Ms Lim did rendered the tender process "tainted and flawed" and said she was colluding with FMSS. Ms Lim replied that her advice had to be seen differently because there was only one bidder and she wanted the town council meeting to be a "productive"one. She said she had acted in good faith at all times.

Mr Singh also said Ms Lim and her fellow WP defendants were "disingenuous" to draw a parallel between the non-disclosure of interests by shareholders of FMSS and CPG.

This was because Mr Jeffrey Chua, then Aljunied Town Council's general manager and secretary, had declared his interest as CPG managing director in a 2010 town council meeting. Not only that, Mr Chua's share options were for CPG's parent company and amounted to only 0.015 per cent.

In contrast, husband-and-wife team Mr Loh and Ms How held a 70 per cent stake in FMSS, while holding key roles in AHTC.

After another lengthy exchange, Ms Lim eventually admitted there was no similar disclosure by FMSS. Mr Singh said: "So Ms Lim, as you have been giving evidence to this court in your defence, in Parliament, in your media statements, you have no qualms lying."

"I will reject that," she replied.

During re-examination by her lawyer Chelva Rajah, Ms Lim said it would have been "redundant" to disclose the stakeholding of FMSS to town councillors - an issue Mr Singh had raised - since most of them would have known who its owners were. But Mr Singh said evidence about other people's knowledge is "inadmissible".


PRITAM SINGH, KENNETH FOO AND CHUA ZHI HON

WP chief Pritam Singh was on the stand for four hours.

Mr Davinder Singh put to Workers' Party (WP) chief Pritam Singh that in waiving a tender and appointing FMSS in 2011, AHTC had sent a message to companies in the township management industry to stay away.

This resulted in FMSS being the sole bidder for the managing agent and essential maintenance services contracts in 2012, when both were put up for tender, he said.

The WP chief disagreed, saying the "politicised town council space" must be considered, and that AHTC, as the first opposition GRC, had to take the decisions that it did.

Mr Davinder Singh also questioned why the WP MPs waited until a town council meeting to inform councillors about the appointment of FMSS, when an e-mail could have been sent out.

Mr Pritam Singh said the meeting would be a better platform for councillors to scrutinise the decision.

Mr Davinder Singh asked town councillors Kenneth Foo and Chua Zhi Hon whether they could have done more to ensure the decisions AHTC made were in the best interest of the residents.

Mr Foo said "hindsight is always the master". Still, he agreed with the senior counsel's point that it was better to have had a tender and for FMSS to bid with other firms, so that AHTC would have greater negotiating power.

Mr Chua replied that he was satisfied FMSS would take over the job of the outgoing agent at the same rate and scope of work.


HOW WENG FAN

Ms How secretly recorded a phone conversation with a KPMG executive in 2016, in which she called Ms Lim a "hopeless" chairman and said the town council would die under her watch.

The FMSS owner submitted the recording for court proceedings, and a transcript of the call was read out in court by Mr Davinder Singh.

It was revealed that Ms How also blamed Ms Lim for the death of her husband, Mr Danny Loh, who had a fatal heart attack in Japan in 2015.

Mr Singh charged that Ms How had misled the town council, by telling councillors a three-year budget projection could not be done. She did it so that the town council would award the managing agent contract to FMSS in 2012 at its proposed rates, he said.

Ms How disagreed, saying the town council's computer system had not stabilised yet, so she was unable to work out the projected budget. Uncertainties, like rising manpower costs, also meant the projection would be difficult to do, she added.





Managing agent's legal obligation, and more
The Sunday Times, 4 Nov 2018

MR OWEN HAWKES

Executive director of auditing firm KPMG, which was tasked to look into AHTC's accounts.

Senior Counsel Chelva Rajah, the WP town councillors' lawyer, put to Mr Hawkes that AHTC had to terminate the contract of managing agent CPG early, because the ruling People's Action Party (PAP) had a track record of making "things difficult for opposition town councils".

Mr Hawkes said the PAP-appointed CPG had legal obligations to fulfil.

He also said AHTC was so "obviously concerned" by a major accounting lapse by FMSS that it withheld $250,000 in fees, showing it was "not happy" with its services. But FMSS' lawyer Leslie Netto disputed this and said there was no such thing as a "perfect contract".

Another issue Mr Netto put to Mr Hawkes was how AHTC and FMSS had maintained the estates well. But Mr Hawkes said repeatedly that his concern was about how the town council manages itself. "Having been to Hougang many, many times, it is not my place to suggest it is some sort of Mad Max style wasteland," he told Mr Netto at one point, referring to the movie about a dystopian future.


MR GOH THIEN PHONG

Partner at PwC, which was hired by PRPTC to look into AHTC's books.

While PwC's report said AHTC had chosen higher-priced contractors that cost the town council more, defence lawyer Chelva Rajah said this was justified.

In the case of a contractor for refuse chute and roller shutter maintenance, the lower-priced firm told AHTC it did not have resources to take on extra work. Mr Goh replied that these reasons were not captured in the tender evaluation report.

Defence lawyer Leslie Netto put to Mr Goh that the PwC's report was "prejudiced" and did not consider other issues, like the political nature of town councils. Mr Goh disagreed and said the report was based on all available evidence.

Mr Netto said the PwC report was speculative in saying that appointing FMSS gave it an edge in a subsequent tender.

Mr Goh pointed out that other service providers had approached town councillors but were turned down, and since a tender was waived, these companies may have the impression it was not worth putting in a bid.





Workers' Party's legal bill $800,000 to date, AHTC to let court decide its fees
By Rachel Au-Yong, The Straits Times, 3 Nov 2018

The Workers' Party (WP) town councillors involved in multimillion-dollar lawsuits over alleged improper payments have paid their lawyers another $195,800.

This brings their legal bill to around $800,000 to date.

The latest bill was for "work done in the final pre-trial stage", WP chairman Sylvia Lim, secretary-general Pritam Singh and former chief Low Thia Khiang said on their blog In Good Faith yesterday, along with a picture of the receipt.

Last week, the trio raised over $1.13 million in a crowdfunding exercise that closed after three days, as the amount raised "substantially covers the legal fees required at this point in time", they wrote then.

Prior to the exercise, they had paid about $600,000 in fees out of their own pockets.

Of the crowdfunded amount, $1 million was deposited with law firm Tan, Rajah & Cheah. Senior Counsel Chelva Rajah is representing the trio and two other Aljunied-Hougang town councillors in the civil suits, for which the first leg of hearings ended on Tuesday.



The quintet, former AHTC managing agent FM Solutions & Services (FMSS) and its owners How Weng Fan and her late husband Danny Loh, have been sued by AHTC over $33.7 million in alleged improper payments.

AHTC was directed to sue by an independent panel led by Senior Counsel Philip Jeyaretnam.

Separately, the panel said in an update on Wednesday that the law firm representing AHTC will let the High Court determine its fees after the case ends, through a legal process known as taxation.

The update added that the law firm had not been paid any professional fees so far, and AHTC has only paid for its share of the hearing fees.

Mr Cyril Chua, director of law firm Robinson LLC, said taxation is a "transparent process that pre-empts accusations of lawyers being overpaid".

He added that judges determine the appropriate legal fees based on the time spent by lawyers and the complexity of the case, among other things.



The Pasir Ris-Punggol Town Council has also launched a lawsuit against the defendants, to recover its share of losses allegedly incurred when Punggol East constituency was managed by the WP-led town council from 2013 to 2015. It is represented by Senior Counsel Davinder Singh of Drew & Napier.

When asked about Mr Singh's legal fees, Punggol East MP Charles Chong said he would not be commenting as long as the case is still before the courts.

FMSS' lawyers Netto & Magin LLC also declined to speak about their clients' fees to date.





AHTC Trial DAY 17: 30 Oct 2018

FMSS boss How Weng Fan secretly recorded phone call in which she called Sylvia Lim hopeless
By Rachel Au-Yong, The Straits Times, 31 Oct 2018

A conversation in which scathing remarks were made about Workers' Party (WP) chairman Sylvia Lim was recorded secretly by the person who was lashing out at her.

Ms How Weng Fan, who held various key roles in Aljunied-Hougang Town Council (AHTC), had recorded her 2016 phone conversation with an executive of audit firm KPMG.

During the phone call, she described Ms Lim as "hopeless", and said AHTC would die under her watch. She also blamed Ms Lim for her husband's death in 2015.

Ms How then volunteered the recording as evidence for a multimillion-dollar civil lawsuit brought against eight defendants, including herself and Ms Lim, over alleged improper payments AHTC made to its managing agent FM Solutions & Services (FMSS) and its service provider, FM Solutions and Integrated Services.

Ms How and her late husband Danny Loh, both WP supporters, were FMSS' main shareholders. The couple also held key appointments in AHTC from 2011 until 2015, when FMSS stopped work in the town council in July that year.

This chain of events was established yesterday when Ms How was cross-examined by lawyer David Chan, who is representing AHTC, which has been asked by an independent panel to sue three WP MPs and two of its own town councillors over $33.7 million in payments AHTC made between July 15, 2011 and July 14,2015.

Ms How's responses also answer questions raised on social media by some people, who wanted to know how the recording was made. It had been the subject of Ms How's testimony on Monday.

She, however, told the High Court yesterday, the 17th and last day of the trial, that she did not inform the KPMG executive that she was recording the call.



During re-examination by her lawyer Leslie Netto, Ms How also reiterated that a letter of intent that FMSS sent to AHTC on June 22, 2011, was not a confirmation that FMSS had been awarded the contract.

She said she needed Ms Lim's reply first, which she received two weeks later.

"While we have undertaken the commitment (to take on liability and risk as a company), we equally needed the commitment from her… We needed the documents to buy insurance. It was a bit uncertain if (WP) was still going to proceed to give FMSS the contract then," she added.

Besides Ms How, five other people who worked with AHTC, including one FMSS shareholder and three former staff members, also took the stand yesterday.

This wrapped up 17 days of hearings that began on Oct 5 in a case alleging that payments made to FMSS were improper and void, as former WP chief Low Thia Khiang and Ms Lim acted in breach of their fiduciary duties.

Others named in the suit include WP secretary-general Pritam Singh and Ms How.

The Pasir Ris-Punggol Town Council (PRPTC) also filed a suit against AHTC to recover any losses suffered by Punggol East from the alleged wrongful payments. The constituency was under the town council from 2013 until 2015.

In total, 14 witnesses took the stand.

Ms Lim's cross-examination by Senior Counsel Davinder Singh, representing PRPTC, was the longest, stretching over 41/2 days. Mr Low was cross-examined for 11/2 days.

Among other things, Mr Davinder Singh got Ms Lim to admit that she and the other MPs did not disclose to the rest of the town council what FMSS' rates were. He charged that this caused them to breach their duties as town councillors.

In their defence, Ms Lim and the other MPs said they acted in good faith and in the best interests of their residents, and that they had to work in a short timeframe to get a managing agent.

Last week, the three MPs raised more than $1 million for their legal fees through crowdfunding.

The Straits Times understands the lawyers have until Jan 18 to submit their closing arguments, and up to Feb 15 to respond to one another. There will be another hearing for both sides' closing arguments, and this is expected to be in March.

Justice Kannan Ramesh will give his judgment later.

If the WP town councillors and FMSS were found to have breached their fiduciary duties, a second round of hearings to determine damages will follow.













FMSS controlled payments, says lawyer for AHTC
By Adrian Lim, Transport Correspondent, The Straits Times, 31 Oct 2018

As the deputy general manager of Aljunied-Hougang Town Council (AHTC), Mr Yeo Soon Fei was one of three key officers signing off on such documents as work orders, invoices and payment vouchers to authorise payments to the council's managing agent.

But Mr Yeo and the other two town council executives were, at the same time, shareholders of AHTC's managing agent FM Solutions & Services (FMSS).

This led to a process in which FMSS' shareholders "controlled" payments to their own firm, lawyer David Chan said in the High Court yesterday, as he sought to show the conflicts of interest in the town council run by the Workers' Party (WP).

Mr Chan is representing AHTC, which is suing eight defendants to recover allegedly improper payments made by the town council to FMSS from 2011 to 2015. The defendants include three WP MPs.

Mr Yeo, a witness in the multimillion-dollar civil lawsuit, disagreed with Mr Chan's charge that he had facilitated payments to his own company FMSS, whose other shareholders include Ms How Weng Fan and her late husband Danny Loh.

Mr Loh, who died in 2015, was AHTC's secretary, and Ms How, its general manager.

Mr Yeo said that ultimately, the town council was the "paymaster", and its chairman and vice-chairman had to sign off to approve the payments to FMSS.

The chairman between 2011 and 2015 was MP Sylvia Lim, and the vice-chairman post was held by different MPs, including MP Low Thia Khiang and MP Pritam Singh.

If FMSS did not perform, it would not get paid, said Mr Yeo, one of five witnesses who testified yesterday.


Another issue in the payment process raised by Mr Chan was a stamp used by Mr Yeo on invoices and which stated that "works have been delivered/completed".

Mr Chan said there was no certification of works being done. Instead, the stamp signified that the amounts payable on the invoice had been checked and tallied, Mr Chan added.

Mr Yeo said that was not true, as works being undertaken and done were tracked by an Integrated Maintenance Management System. This software system records residents' complaints, like faulty lights in corridors, and how they are resolved.

Mr Chan, however, said this system was limited to just monitoring issues raised by residents.

After some back and forth, Mr Yeo confirmed the stamp was only to certify whether the figures on the invoices were accurate.

Mr Yeo said the spectrum of a managing agent's work is wide, and the best people to oversee its work were the MPs, who could keep track of the agent, such as through regular meetings and the system which recorded residents' complaints, he added.

"The MPs saw us working. We were working day and night… We have so many audits, we have to do day-to-day work, it is not like we sit there and do nothing," Mr Yeo said.

Mr Chan responded: "I am not suggesting you are not working hard."

The other witnesses yesterday were former FMSS employees: Mr Ng Wai Loon, Mr Tan Han Hoe and Ms Chong Huey Jiuan, who were all seconded to work in AHTC; and Ms Serene Loi, a computer programmer deployed by her IT firm to work with the town council.

Mr Ng and Mr Tan were questioned briefly by Mr Chan about their roles in AHTC, while Ms Chong and Ms Loi were not cross-examined.











AHTC Trial DAY 16: 29 Oct 2018

FMSS' How Weng Fan calls Workers' Party MP Sylvia Lim 'hopeless' town council chairman
AHTC ex-deputy secretary and managing agent says new MP was inexperienced
By Adrian Lim, The Straits Times, 30 Oct 2018

In a phone conversation, a former key officer of the Aljunied-Hougang Town Council (AHTC) had described its chairman Sylvia Lim as "hopeless", and said that the town council would die under her watch.

Ms How Weng Fan, who was AHTC's deputy secretary, also said she felt "played out" by former Workers' Party chief Low Thia Khiang for appointing Ms Lim as the chairman in 2011, and had asked him to take over the position from Ms Lim.

In the 2016 phone conversation with an executive of audit firm KPMG, she went as far as to blame Ms Lim for the death of her husband, who was AHTC's secretary from 2011 to 2015.

A transcript of the conversation was read out by Senior Counsel Davinder Singh in the High Court yesterday when he wrapped up his cross-examination of Ms How.

Yesterday was the 16th day of the hearing of a multimillion-dollar civil lawsuit brought against eight defendants, including Ms How and Ms Lim, over alleged improper payments AHTC made to its managing agent FM Solutions & Services (FMSS) and its service provider.

Ms How and her late husband, both WP supporters, were FMSS' main shareholders.

She had been contacted by the KPMG executive who wanted a meeting with her.

AHTC had appointed KPMG in 2016 to look into the town council's books, after a special audit by the Auditor-General's Office (AGO) found significant governance lapses at the town council.



Referencing the phone conversation, Mr Singh charged that when KPMG stepped in to do its review, everything Ms How and her husband had "worked for" with the other defendants to benefit FMSS, despite the conflict of interest, had started to "unravel".

It led to "fingers being pointed at each other", Mr Singh added, alluding to Ms How's scathing comments of Ms Lim.

Ms How initially disagreed with Mr Singh's statement.

But after he pointed out that in the phone conversation she had blamed Ms Lim for AHTC's problems, Ms How said this was because her husband had died and she held Ms Lim responsible for failing to stand up to the AGO report at the start. Ms How had told the KPMG executive: "You know I had to lose my husband in the process. And because of her (Ms Lim)."
Justice Kannan Ramesh asked her to further explain her remark.

Ms How said her husband was under a lot of pressure and "went through hell" to set up AHTC properly, amid the many problems it faced.

"Nobody wants to listen to the problems we were facing and going through," she added, pointing out that they had to deal with the AGO's investigations and audits from KPMG and PwC.

She said her husband was under great stress and died of a heart attack in Japan in 2015, adding that the media wrongly reported that he had an accident there.

Ms How also said that because of the AGO report, Ms Lim imposed liquidated damages of $250,000 on FMSS.



The court also heard yesterday that Ms How told KPMG that the town council was not going to defend her because of an arbitration process between FMSS and AHTC.

"They don't know by not defending me, they are just digging their (own) grave", she had told the KPMG executive.

She added that "all the PAP (People's Action Party) needs to do is ask for my views of the (WP) MPs, I think they will die straight away".

Mr Singh asked Ms How what information she had that would destroy the WP MPs politically.

She said she did not have any, but that if the issue of financial governance was brought to court, they would all be "dragged through the mud" because of the way the media would report on the situation and how the truth would be "inverted".

She herself had been put in a "living grave" because her company cannot get any contracts now. "With all the political bullshit, they (WP MPs) will die," she added.

Justice Ramesh told Ms How to watch her language and she apologised, saying she got carried away.



Mr Singh asked Ms How what she meant when she said in the phone conversation that the "town council was going to die" if Ms Lim was the chairman.

She replied that it was because of Ms Lim's inexperience and the town council would similarly suffer if it had been any of the other new WP MPs who had taken over.

She further added yesterday that they were in a political situation and a new MP like Ms Lim would not have been able to handle a situation in which all the government bodies were coming at AHTC.

Things were political from the start, with the audits and the incumbent computer vendor withdrawing a Town Council Management System in 2011, she said.















How Weng Fan's 2016 phone call with KPMG
The Straits Times, 30 Oct 2018

During yesterday's hearing, Senior Counsel Davinder Singh read out certain parts of a transcript of a phone conversation between FM Solutions & Services owner How Weng Fan and a KPMG staff member in 2016. He then questioned Ms How about what she said during the phone call. Here are edited extracts of the cross-examination:


Davinder Singh (DS): "I already told Low Thia Khiang to remove her as chairman… I am not scared to reveal this." You told Mr Low to remove Sylvia Lim as chairman of the town council?

How Weng Fan (How): No, rotate and replace with Mr Low, to take over.

DS: Why?

How: Because we were put into this political situation whereby a new MP like Sylvia, or any other elected MP, would not be able to handle this kind of situation where all the government bodies were coming at us, so you need someone experienced to deal with it.

DS: "I told Mr Low Thia Khiang how can you not be the chairman, you put her, the town council is just going to die, enough lah!" That is clear, right?... It was an expression of your complete absence of confidence in Ms Lim, right?

How: On her inexperience, yes.

DS: "She was a councillor before at Hougang Town Council. She was so scared of everything, she just cannot be the chairman. She will just do things to protect herself only. I told Mr Low Thia Khiang… you have to come back and be the chairman for at least the first two years, straighten out the town council first. He doesn't want to listen..." Ms How, you meant she was a person of no integrity because she would look after her own interest only. Yes or no?

How: No.

DS: You said, "You know I had to lose my husband in the process. And because of her." Who is the her?

How: Sylvia... My husband was under a lot of pressure, we went through hell having to actually set up the town council properly amid all the problems that we had, and at the end of the day, we deal with all this, we deal with AGO (Auditor-General's Office), and we have to deal with an audit again, and then PwC... because of this AGO report, the chairman… imposed an LD (liquidated damages) of $250,000 on us. My husband was caught and stressed up in this kind of thing… when we were in Japan, he was still doing calculations for bonuses… he just died of a heart attack there and then... The press reported that he died of an accident. How can that be?

DS: "At the end of the day, she is a hopeless chairman." Who is the "she"?

How: Sylvia.










FMSS’ How Weng Fan wanted 'hopeless chairman' Sylvia Lim replaced, reveals Davinder Singh
By Lydia Lam, Channel NewsAsia, 29 Oct 2018

Ms Sylvia Lim was a “hopeless chairman” of Aljunied-Hougang Town Council (AHTC) and Mr Low Thia Khiang should replace her, according to the director of the town council’s former managing agent FM Solutions and Services (FMSS).

Ms How Weng Fan, one of eight defendants in the ongoing AHTC trial, was revealed to have said that in a recorded phone call to an employee of audit firm KPMG.

Portions of the 2016 phone call were read out in the High Court on Monday (Oct 29) by Senior Counsel Davinder Singh on day 16 of the trial.

"I even told Low Thia Khiang to remove her as chairman," read Mr Singh, who acts for Pasir Ris-Punggol Town Council (PRPTC).

"You told Mr Low to remove Sylvia as chairman of the town council?" he asked.

"To replace her with himself," answered Ms How.

"That would be a removal," Mr Singh said.

"No, rotate and replace," she answered.

"Why?" Mr Singh asked.

"Because we were put into this political situation whereby a new MP like Sylvia or any other elected MP would not be able to handle this kind of situation where all the government bodies were coming at us so you need someone experienced enough who can handle," Ms How replied.

Ms Lim was chairman of AHTC from June 2011 to August 2015. She assumed the position soon after Hougang Town Council (HTC) merged with Aljunied Town Council when the Workers' Party (WP) won Aljunied GRC in the 2011 General Election.

Mr Singh went on to read other portions of the transcript, where Ms How said: "You know Mr Low very well ... and he also played me out."

"Yes," Ms How responded. "That's what I felt when he informed me that Sylvia would be the chairman. I felt to put an inexperienced MP to be chairman it would (put me in a difficult position as) we need someone strong to be able to handle the matters politically."

Ms Lim sat in the courtroom listening to Ms How's testimony.

Ms How took the stand for the first time on Monday. She represents herself and her late husband Danny Loh in the lawsuits brought by AHTC and PRPTC for alleged breaches of fiduciary duty in the appointment of her company FMSS as managing agent of AHTC.

It is alleged that the appointment led to AHTC making millions of dollars of “improper payments” to FMSS. This was in circumstances where there were conflicts of interest, as both Ms How and her husband held dual roles in both AHTC and FMSS.

After the WP won Aljunied GRC, Mr Low had approached Ms How to set up a company to provide managing agent services to AHTC if needed. Ms How has worked with Mr Low for more than 20 years, having joined HTC in 1991.

She told the court that she was reluctant at first, as she and her husband were contemplating semi-retirement, but eventually agreed as she wanted to set up a company with her husband anyway.


SYLVIA LIM "SO SCARED OF EVERYTHING": HOW WENG FAN

Mr Singh continued reading what Ms How said during the phone call: "(Sighs) She was the councillor before at Hougang Town Council. She is so scared of everything. She just cannot be the chairman. She will just do things to protect herself only. Then I told Low Thia Khiang she cannot be the chairman, you have to replace her ... you have to come back and be the chairman."

Looking at Ms How, Mr Singh said: "That's nothing to do with inexperience, Ms How, it's because of the character."

Ms How disagreed.

"You said she is so scared, she will just do things to protect herself only," Mr Singh went on.

"That's because she was inexperienced," Ms How said.

"You meant she's a person of no integrity, because she will look after her own interests only," Mr Singh persisted.

He said Ms How blamed Ms Lim for the troubles in the town council, but Ms How disagreed.

He continued reading what Ms How had said in the conversation: "They do not even know, that by not defending me, they are just digging their grave."

"So you were saying that if they turn on you, you are going to spill the beans, correct?" Mr Singh asked.

"This is very natural because ... I'm going to arbitration to disagree with each other on the claims," answered Ms How.

"And the grave they are digging for themselves meant that there is something that will put an end to them right?" Mr Singh asked.

"No, I think it will be coming to this court," Ms How said.

"Many people go to court and are victorious," Mr Singh answered. "They don't dig their grave when they go to court."

"This is just a figure of speech," Ms How said.

"It is a very powerful figure of speech," Mr Singh replied. "So you were telling (them) that if they don't change course, you will come clean ..."

"Well, when you come to court everything will be exposed," Ms How said.



MS HOW HAD INFO WHICH COULD DESTROY ELECTED MPS POLITICALLY: DAVINDER SINGH

Mr Singh continued reading aloud from the phone conversation, where Ms How said: "All PAP need to do is come and ask me for my views for MPs la. I think they will die straightaway la."

"Yes," Ms How said.

"The same grave, the same death analogy. In other words, you had information that would finish them off, correct?" Mr Singh asked. "This was not inefficiency. This was not inexperience. (You) had information which would destroy them politically, correct?"

"I did not have information," Ms How replied. "But we would be dragged through the mud because of how the press would report. It's a grave. I can't get any jobs. I can't get any contracts for my company. (The MPs) will lose their seats and all that. If for one reason or another, the truth has been turned into lies ... they will lose their seats. With all this political bullshit this is what is going to happen, look at what is happening!"

At this, the judge stepped in and Mr Singh asked Ms How to mind her language, to which she apologised, saying she got carried away.

Mr Singh continued reading from the phone call, where Ms How said: "You know, I had to lose my husband in the process. I think you read in the papers you should know. And because of her."

"Who is the 'her'?" Mr Singh asked.

"Sylvia," Ms How answered. "My husband was under a lot of pressure. We went through a lot of hell having to set up the town council properly, amidst all the problems that we had and at the end of the day we deal with audit, then AGO, then we have to deal with audit again, PwC, and nobody wants to listen to the problems we were facing and going through and at the end of the day, the town council accepts the AGO’s report just like that. Which cannot.

"The report doesn't tell everything ... Events are not recorded properly. I spent five hours talking to AGO, I don't think the minutes … (reflect that). At the end of the day, because of this AGO report, the chairman felt compelled, because of the lapses, she imposed liquidated damages on us. In Japan, (my husband Danny Loh) was still doing the bonus calculation. He just died of a heart attack there and then. What did the press report? He died in an accident. Totally untruth. How can that be?"

"Ms How," Justice Kannan Ramesh began.

"And they are suing me, for S$33 million, times two!" Ms How burst out.

Another segment of the phone call revealed that Ms How had told KPMG that she had advised the town council, but they “did not want” to listen to her.

According to the transcript, she said: "I know you all (KPMG) want to rush out the report but ... you can't finalise this report like that ... Frankly speaking they get themselves into hot soup because they do not want to use advice from FMSS and now they are using such things to stab off, I will have to ... defend myself. And kill them off, and help PAP kill them off."

"What is that advice they did not want to listen to?" Mr Singh asked, referring to the town council.

Ms How explained that FMSS had told the town council that they were not in a position to do an audit, and that their advice was to honestly tell the Ministry of National Development and the Housing Development Board that they were unable to do an audit as they did not have the computer system for it, and could not balance the figures.

Ms How will take the stand again on Tuesday.





Davinder makes the case that How misled AHTC; she disagrees
By Seow Bei Yi, The Straits Times, 30 Oct 2018

A majority owner of FM Solutions & Services (FMSS), managing agent for the Aljunied-Hougang Town Council (AHTC), could have manually done a three-year projection of its fees for the town council in 2012 - ahead of being awarded its second contract. But it did not do so.

In refusing to provide the town council a projection of the managing agent's fees, and by telling AHTC that it had enough money to pay FMSS in the following year, Senior Counsel Davinder Singh put it to Ms How Weng Fan yesterday that she contributed to AHTC's decision to award a tender to FMSS.

Ms How, who was also general manager and deputy secretary of the AHTC at the time, disagreed.

Mr Singh added that her actions impacted AHTC and FMSS' finances as well. While AHTC had a $1.5 million deficit in 2013 and a $2 million deficit in 2014, FMSS' revenue rose by 30 per cent over this period - by $2 million - he told the High Court yesterday.

"What happened in those two years was, the money moved from the town council to FMSS, in a way where AHTC was funding, through its deficit, (FMSS') revenue and profits," he charged.

Ms How disagreed, but did not dispute the figures.

She said the jump in revenue was because the Punggol East constituency came under the opposition town council in 2013, after the Workers' Party (WP) won the seat in a by-election. She added that a rise in operating expenditure added to AHTC's deficit as well.

She then said Mr Singh was "wrong and misleading this court".

He replied: "Any competent, honest, conscientious and honourable secretary, deputy secretary and general manager would, in response to a request... have not just done a projection, but taken into account many of the things that you yourself have just described."

He was referring to Ms How, her late husband Danny Loh, who was the AHTC's secretary and a majority owner of FMSS, and events such as the by-election.

Ms How said she had cited uncertainties in the external environment as a reason FMSS could not give a projection. "How would we know that the Punggol East by-election would (take place)?" she asked.

She earlier also said that FMSS had trouble doing budgeting with its computer system at the time, saying a former computer vendor had "withheld" information. It would have to do projections manually, which would have been difficult.

Mr Singh said she did not cite in her evidence computer system issues as an obstacle to churning out the projection. He charged that she had "persuaded" the town council not to pursue the projection so it would award the contract to FMSS "at the rates (she) wanted".

Ms How disagreed.

The projection of fees was one of several instances Mr Singh suggested Ms How had misled the council.



He also charged, among other issues, that she was "lying" when she said her husband had disclosed to some elected councillors that they were FMSS' owners during a June 2011 presentation about the company's set-up. Ms How said some others found out about the matter later, and the rest at an August 2011 meeting.

Mr Singh put to her that other witnesses who took the stand did not allude to such disclosures, which he noted the couple saw as necessary since they were serving in both FMSS and AHTC.

"You and your husband carefully avoided disclosing ownership interest... to have the managing agent contract that your company had obtained remain undisturbed," he said. He added that she appeared to be in "cahoots" with the WP MPs in AHTC who knew of FMSS' ownership to hide their interests from the rest of the town council.

Ms How replied: "I disagree totally with you, and how you have fully inverted the truth."

In another instance, Mr Singh questioned why she signed off as AHTC's general manager on a June 2011 invoice that FMSS issued to the town council - though she did not hold that position yet.

"You were in a blatant conflict of interest... but you were happy to facilitate AHTC's payment because it was going to be made to your company," he said.

"That is preposterous," she replied, explaining that the stamp used had been an old one and was merely to acknowledge the invoice had come to the council.

Mr Singh put to her: "Ms How, I suggest to you that this is yet another example of you acting in cahoots to get payment out of AHTC, in circumstances where you knew this was improper and dishonest."

She disagreed.










Town councillors say they could have exercised more options on hindsight
By Seow Bei Yi and Adrian Lim, Transport Correspondent, The Straits Times, 30 Oct 2018

The question of whether the appointed members of Aljunied-Hougang Town Council (AHTC) should have done more to secure the best deal for its residents in its early days took centre stage yesterday morning, Day 16 of a multimillion-dollar lawsuit alleging that its payments, including those to a former managing agent, were improper and void.

Questioned by Senior Counsel Davinder Singh on whether he would have acted differently in 2011 to ensure AHTC had considered all its available options, town councillor Kenneth Foo told the High Court: "Hindsight is always the master… I believe that I could have exercised more options at that point in time, (but I acted) to the best of my ability and knowledge."

In 2011, the Workers' Party (WP) won Aljunied GRC in a general election, leading to it taking over the running of the Aljunied Town Council from the People's Action Party (PAP). The town council was combined with that of single-seat Hougang to form the new AHTC.



Without calling a tender, AHTC replaced incumbent managing agent CPG Facilities Management with newly formed FM Solutions & Services (FMSS), which later was also awarded an Essential Maintenance Service Unit (EMSU) contract. Again, no tender was called.

Mr Singh suggested to Mr Foo that if tenders had been called on both occasions, it would have been clear whether companies were willing to make a bid to run an opposition town council.

Mr Foo conceded that this was the case. Earlier, he said he shared others' concerns that companies providing managing agent services to other town councils in Singapore - which were PAP-run - would not be willing to work with the opposition-run town council. This, Mr Foo added, could be because AHTC was an "outlier", and working with it might affect the companies' relationships with their other clients.

Mr Singh countered later that if there was a competitive tender to be AHTC's agent and companies placed bids, then AHTC would have had the benefit of at least a three-year managing agent contract "on the best possible prices".

Mr Foo said this was "possible", but added that while a tender could have garnered the town council a cheaper deal, it could also turn out to be more expensive.

Mr Chua Zhi Hon, another town councillor who took the stand, was asked, among other issues, what had satisfied him about the waiver of tender for AHTC's managing agent in 2011.

Mr Chua said he was satisfied FMSS would take over the job at the same rate and with the same scope of work as outgoing firm CPG.

He added that the political situation was such that the managing agent industry was dominated by companies affiliated with the PAP, and it was necessary to get things running so residents would not face a disruption in services.

Mr Singh said that if there was enough time, and a tender was called, companies may have put in a bid.

He later asked Mr Chua if FMSS had the "upper hand" as well, because it was appointed managing agent and EMSU provider in 2011 without a tender, and that there were no bidders in 2012, when both contracts were put up for bids.

Mr Chua agreed.

Another town councillor, Mr Vincent Koh, who was asked to be a shareholder of FMSS when it was formed in 2011, was questioned on the reasons it was set up.

While Mr Koh said the idea was to keep Hougang Town Council staff together at a time of uncertainty over their jobs during the merger, Mr Singh said it appears FMSS was formed to provide services to the opposition-run town council.

Mr Koh said he was not told of such an intent, but conceded it could be a possibility.

Mr Singh also suggested to Mr Koh that he seemed to be doing an "act of charity" by putting money into FMSS, which would pay Hougang staff's salary with no subsequent job in mind.

Mr Koh said the staff were very close-knit and it was an "act of social responsibility", not "charity". It was the best that could be done for the Hougang staff, he added.
























AHTC Trial DAY 15: 25 Oct 2018

Lawyer says AHTC sent message to industry in waiving tender and choosing firm associated with WP, Pritam disagrees
WP 'loud and clear' in telling other firms to stay away, says Davinder
Pritam Singh disagrees on implications of tender waiver, says 'politicised town council space' must be considered
By Adrian Lim and Rachel Au-Yong, The Straits Times, 26 Oct 2018

The Aljunied-Hougang Town Council (AHTC), in waiving a tender for a new managing agent in 2011, and appointing a firm associated with the Workers' Party (WP), sent a "loud and clear" message to the township management industry, said Senior Counsel Davinder Singh.

That message was "don't bother" bidding for its contract as the WP-run town council would be doing things its own way, he charged when cross-examining WP chief Pritam Singh yesterday.

Hence, no one - except for one firm - bid for the managing agency and Essential Maintenance Service Unit contracts which AHTC called in 2012, the Senior Counsel said as he sought to establish the motivations behind AHTC's decisions that led to a new managing agent being appointed.

Yesterday was Mr Pritam Singh's first and only day on the stand, and it came after five days of cross-examination that WP chairman Sylvia Lim faced in the hearing of a multimillion-dollar civil lawsuit against, among others, three WP MPs.



The sole firm that bid for the contracts, Mr Davinder Singh noted, was the incumbent, FM Solutions & Services (FMSS), owned by supporters of the WP.

The Senior Counsel put to Mr Pritam Singh: "A responsible town councillor would apply his mind to the implications of waiving his tender on future prospects of parties in industry being interested in making a bid."

The WP chief replied: "I disagree because a responsible town councillor needs to understand what is the difference between his town council, PAP (People's Action Party) town councils and the reality of the politicised town council space in Singapore.

"After the responsible town councillor goes through that process, he will understand why AHTC, as the first opposition GRC, had to take the decisions it did, particularly after Mr Lee Kuan Yew himself warned that Aljunied residents had five years to repent," he added.

He was referring to a warning Singapore's founding prime minister gave to Aljunied voters a week before Voting Day on May 7, 2011, that they would "live and repent" if the PAP was defeated in the GRC.



Mr Pritam Singh is the third defendant in the ongoing lawsuit over alleged improper payments made by the town councillors to FMSS and its service provider.

The first two were former WP chief Low Thia Khiang and Ms Lim.

Mr Davinder Singh said if Mr Pritam Singh honestly believed it was in AHTC's interest to waive the tender in 2011, the responsible thing to do would have been to "lock in" FMSS to the rates of the former agent, CPG Facilities Management, for two years rather than just one.

This would have helped AHTC avoid the rise in managing agent rates in 2012, when FMSS was the sole bidder in the open tender.

Disagreeing, Mr Pritam Singh said it was a better idea to give FMSS a one-year contract and then call for a tender so that the town council could gather appropriate rates from other players.

"You cannot have it both ways," said Mr Davinder Singh, "and expect that the market would open up and embrace an opposition-run town council a year later after saying the companies would not touch AHTC".

Mr Pritam Singh said he could not speak for other companies as "the market has money to make with a managing agent contract".

Mr Davinder Singh also asked why the WP MPs waited until a town council meeting to inform the other councillors about the appointment of FMSS, instead of informing them earlier, like via a "two-minute" e-mail.

The WP chief said a meeting would be a better platform for the councillors to scrutinise the decision.

Mr Davinder Singh pointed out that the meeting was postponed from July 27 to Aug 4, further delaying the councillors being informed and residents being told of FMSS' appointment.

Mr Pritam Singh replied: "I don't think there was any nefarious plot on that."


Mr Davinder Singh also sought several times to get Mr Pritam Singh to remember certain dates, including when he learnt Ms Lim and Mr Low were involved in talks on forming a managing agency.

The WP chief said he could not remember, as the events took place seven years ago.

Mr Davinder Singh referred him to his affidavit, in which he mentioned several meetings, one as early as in June 2011.

"I suggest to you that having remembered it so clearly in your affidavit… which you filed last month, on the stand you create a completely different impression," he added.

Mr Pritam Singh said he had nothing to hide.

The Senior Counsel also asked the WP chief if he attended any discussions where someone suggested that a tender to appoint a managing agent be called. The WP MP said he could not recall.

"For the last 50 minutes, you have told us you cannot recall so many things," Mr Davinder Singh said.

Mr Pritam Singh replied: "Do you want the truth? I am giving you the truth."

But there were some light moments during the morning hearing.

When asked to recall whether he attended a meeting in June or July 2012, Mr Pritam Singh said: "I was married around that period, so I can't remember..."

"So, you put your marriage over your town council?" Mr Davinder Singh said with a laugh.

Mr Pritam Singh replied in jest: "Nice try, Mr Singh."

Senior Counsel Chelva Rajah, the defence's lawyer for Mr Pritam Singh, then stood up and said, to chuckles in the courtroom: "That is a conflict of interest, if there ever was one."









Town council's delegation of duty to managing agent debated in court
By Adrian Lim, Transport Correspondent, The Straits Times, 26 Oct 2018

The practice of town councils delegating to their managing agents the selection of consultants for projects - from a pre-approved panel of companies - was debated in the High Court yesterday, the 15th day of a civil suit involving three Workers' Party (WP) MPs.

Senior Counsel Davinder Singh said that while the Aljunied Town Council had this practice and the WP did likewise when it took over operations from the ruling People's Action Party, "two wrongs don't make a right". Town councillors cannot "absolve" or "side-step" their responsibilities, he said while cross-examining WP chief Pritam Singh, one of the eight defendants in the lawsuit.

Such a practice of delegation to the managing agent does not follow the rationale and spirit of the Town Councils Financial Rules, the Senior Counsel added.

But the WP chief said that a properly appointed managing agent would be in the best position to decide which consultant would be better for the job. Mr Pritam Singh added that the consultants had been appointed by the town council, and had been reviewed to undertake a particular scope of work.

Mr Davinder Singh was questioning Mr Pritam Singh on the Aljunied-Hougang Town Council's (AHTC) use of an appointed panel of architect consultants, which it delegated its managing agent FM Solutions & Services to select from for construction projects.

Only two consultants, LST Architects and Design Metabolists, tendered to be on the panel in 2012, and both were selected by AHTC's tender and contracts committee.

AHTC, which had been directed by an independent panel to sue eight defendants for alleged improper payments, has claimed the town councillors failed to justify selecting the higher priced consultant, LST, in seven out of 10 projects.

This resulted in AHTC paying $2.8 million more, lawyers alleged.

Mr Davinder Singh said the town councillors should make the final decision on which consultant to use. But the WP chief said this will be "fait accompli" to some extent, as the managing agent would have conducted the evaluation process before putting it to the councillors.

Mr Pritam Singh noted the Town Councils Financial Rules provides the flexibility for the town council to delegate the duty to the managing agent. In fact, it was doing this on the basis of precedence set by those who ran Aljunied Town Council previously, he added.

Still, Mr Davinder Singh said the principle must be that if the law imposes a duty on the town councillors, they must apply their minds to choose which firm is the best, before work or services are rendered.

Mr Pritam Singh agreed the councillors are "ultimately responsible", and it is important for AHTC to establish whether they are "correct or misguided" in delegating the duties to the managing agent.

Yesterday, Mr Davinder Singh also asked Mr Pritam Singh why the contract for a conservancy and cleaning provider for the Punggol East constituency, Titan Facilities Management, was not extended.

When a fresh tender was called, the same firm was re-appointed at higher rates. This occurred when Punggol East was under the WP's purview between 2013 and 2015.

The WP chief said the then Aljunied-Hougang-Punggol East Town Council's (AHPETC) contracts manager had wrongly told the councillors there was no option to extend.

Asked whether he had checked AHPETC's contractual position, Mr Pritam Singh said he did not.













Town councillor Kenneth Foo explains why he did not query FMSS appointment
By Rachel Au-Yong, The Straits Times, 26 Oct 2018

The non-elected members of Aljunied-Hougang Town Council (AHTC) learnt on Aug 4, 2011, that a new managing agent had been engaged, after FM Solutions & Services (FMSS) had started work.

But while town councillor Kenneth Foo had not received any updates before that, he said he did not ask questions at the meeting about whether a tender was needed.

This was because he believed the Workers' Party MPs, such as Mr Low Thia Khiang and Ms Sylvia Lim, had "given thought" to the matter, he said. He added that Ms Lim had been delegated the authority to make the decision earlier that year.

Taking the stand for the first time yesterday in a multimillion-dollar civil suit, he said that when the town council was told about the FMSS appointment on Aug 4, 2011, it was "for information" and not a discussion.

Mr Foo said that based on his own experience, most tenders would take around two to three months, and thus AHTC would not have enough time to call for a tender as incumbent managing agent CPG Facilities Management had asked to withdraw by Aug 1, 2011. This led him to go along with the MPs when they announced the FMSS appointment.

But Senior Counsel Davinder Singh noted CPG's contract could be extended to give AHTC more time to call for a tender. Mr Foo disagreed, saying CPG "wanted to go".

Mr Singh then asked what factors Mr Foo took into account to justify the waiver of the tender when it was presented to AHTC on Aug 4.

Mr Foo said he remembered it being a "short timeline to take over the town", especially as there were a number of things to settle to ensure a smooth transition.

But Mr Singh said he had difficulty with this statement because the elected MPs would have already made the decision before the meeting for these details to be presented.

"So, in your mind, what was happening was that they were telling us their reasons for the waiver, and (the announcement) was for your information and any clarifications you wanted to seek," said Mr Singh.

"For clarification if we had any questions, yes," Mr Foo replied.





AHTC Trial DAY 14: 24 Oct 2018

Workers' Party chairman Sylvia Lim gave FMSS heads up about tender, tainting it, says Davinder Singh
Counsel says this tainted the process, but WP chairman says it was for practical reasons
By Rachel Au-Yong and Adrian Lim, Political Correspondents, The Straits Times, 25 Oct 2018

Two days before a meeting with the only company that bid for her town council's managing agent contract, Workers' Party chairman Sylvia Lim gave its owners a "heads up" that they would need to justify their higher rates.

Ms Lim used those words in an e-mail to FM Solutions & Services (FMSS) owners Danny Loh and How Weng Fan on June 19, 2012, in which she encouraged them to provide more details at the meeting.

Two days later, the late Mr Loh gave an 11-slide presentation to some members of the Aljunied-Hougang Town Council (AHTC) explaining FMSS' pricing strategy.



Yesterday, Senior Counsel Davinder Singh said that because of her actions, the tender process was "tainted and flawed".

"You colluded with FMSS to make sure that FMSS would come prepared with everything that was needed to secure that bid," he charged.

FMSS won the tender, which was called about a year after the WP won Aljunied GRC in the 2011 General Election.

Mr Singh is representing Pasir Ris-Punggol Town Council in a multimillion-dollar civil suit to recover alleged improper payments from eight defendants, including Ms Lim, who was on the stand for the fifth - and final - day yesterday.



In cross-examining her, Mr Singh noted that one town councillor, Mr Anthony Loh, had asked why FMSS' quote for its services was on the higher side, especially when compared with the charges of People's Action Party town councils.

"Are they having trouble breaking even or is this purely profit-driven?" Mr Anthony Loh wrote in an e-mail to Ms Lim.

She replied an hour later, noting that it was a good question, but not before she had e-mailed Mr Danny Loh and Ms How about giving them the "heads up", Mr Singh noted.

"These people had been given a tip-off, insider information, so that they could come prepared… to overcome the one difficulty you knew the committee had," he charged.

Ms Lim replied: "Sole tenderer, Mr Singh."

He asked if there was a difference between a competitive tender and one with a sole bidder.

She replied: "Yes, in the sense that there isn't information being given out to one tenderer and not the others… I wanted them to come prepared so that the meeting would be productive."

Mr Singh then proceeded to read Ms Lim's earlier testimony that in the tender process, she did her best to act with integrity and objectivity, dealing with all bidders at arm's length.

"You agreed with me that whether it is a competitive bid or sole tenderer, none of them would have an advantage. Yet, you gave FMSS the advantage of the 'heads up' to come fully prepared to defend their pricing," he said.

"It was just a practical matter," she said. "They were the sole bidder. If they had not prepared their answers, they would have to adjourn and come back again."



Mr Singh charged that the process was tainted and that Ms Lim colluded with FMSS to secure their bid.

Ms Lim disagreed.

Mr Singh also said Ms Lim withheld information from AHTC's external auditor and "played with words" to give Parliament the impression FMSS' ownership structure was disclosed to the town council.

"I suggest to you that someone as artful as you knowingly breached your fiduciary duties - duties as a trustee, duties under the law - just to get your way," he said.

"I acted in good faith at all times," Ms Lim replied.

"If this is good faith, then all of us in Singapore are in big trouble," Mr Singh said.

 
Earlier, Mr Singh posited that an external auditor AHTC hired to review its award of a new managing agent contract to FMSS in 2012, on the expiry of its one-year contract, was a "superficial job".

The firm, RSM Ethos, gave AHTC an "A" overall. But, Mr Singh said, it had based its observations only on what it had been told by town councillors such as Ms Lim.

RSM did not carry out any checks, and said its report was "not substantive in nature" and that it was "not possible to detect fraud or irregularities".

Disagreeing that it was a "paper exercise", Ms Lim countered that RSM staff had attended one of the meetings the town council's tender committee had with FMSS.

"I do not agree that they just produced a report based on what they are told. This is not fair to them," she said.

Mr Singh put it to her that there was nothing in RSM's report that said the award of the contract to FMSS was done in an "unbiased, objective, fair and transparent" way, or that its rates were reasonable.

Ms Lim said the point about how it should be awarded was made in the report and, although she could not find it there, reiterated that RSM had given AHTC an "A".

Mr Singh also charged that Ms Lim relied on "conflicted persons" - town council staff with stakes in FMSS - to check that work had been done.

Ms Lim said she worked closely with FMSS daily and was able to assess the work it did.

Mr Singh also put it to her that "the question of the protection and safeguarding of the monies was never on your mind". He added: "You had abdicated your entire role to conflicted persons."

She replied: "That is entirely false."

Mr Singh, in wrapping up his cross-examination, asked Ms Lim what her response to the various claims he had put to her in the five days of cross-examination would be.

"I am suggesting that all those claims and assertions are correctly made," he added.

Ms Lim replied: "I disagree, and I have done my best, together with my counsel, to put forward my defence."













Disingenuous to draw parallel of conflict of interest: Senior Counsel
By Rachel Au-Yong, The Straits Times, 25 Oct 2018

It was disingenuous of the Workers' Party (WP) defendants to draw a parallel between the non-disclosure of interests by shareholders of FM Solutions & Services (FMSS) and CPG Facilities Management, Senior Counsel Davinder Singh said yesterday.

This was because Mr Jeffrey Chua, CPG's managing director, declared his interest in a June 2, 2010, town council meeting when he was general manager and secretary of the then Aljunied Town Council, while it was still under the People's Action Party.

Not only that, Mr Chua's share options were for CPG's parent company and amounted to only 0.015 per cent, Mr Singh noted during his cross-examination of WP chairman Sylvia Lim in a multimillion-dollar civil suit.

In contrast, husband-and-wife team How Weng Fan and Danny Loh held a 70 per cent stake in FMSS, while holding key roles in the Workers' Party-run Aljunied-Hougang Town Council (AHTC).



Yesterday, Mr Singh asked Ms Lim if she was aware, or had ever bothered to check, if Mr Chua had declared his interest.

He was challenging a suggestion made by Ms Lim's lawyer two weeks ago that Mr Chua could also be considered a "conflicted person" if Ms How and the late Mr Loh were deemed as such.

Senior Counsel Chelva Rajah had posed this question to KPMG executive director Owen Hawkes, whose firm was tasked to look into AHTC's books.

Yesterday, Mr Singh said the FMSS owners did not disclose their interests, unlike Mr Chua, who had.

Ms Lim disagreed, saying that documents declaring the shareholdings in FMSS were submitted before it was granted the second managing agent contract in 2012.

Mr Singh pointed out that these were submitted to only a sub-committee, not the entire town council.

Ms Lim said there was no written or oral disclosure, but pointed out that town councillors "had knowledge" of the shareholding interest.

This prompted Mr Singh to seek an intervention from Justice Kannan Ramesh, as he said "this witness will try her luck and push it to the boundaries". Ms Lim later admitted there was no disclosure.

Mr Singh then said: "Ms Lim, if that disclosure of interest was of all of his interest, then the attempt to draw the parallel is disingenuous."

Ms Lim emphasised the word "if" before agreeing.

"So you see, Ms Lim, as you have been giving evidence to this court in your defence, in Parliament, in your media statements, you have no qualms lying," Mr Singh said.

"I will reject that," she replied.





Lawyers argue over questions allowed for witness' re-examination
By Adrian Lim, The Straits Times, 25 Oct 2018

The re-examination of Workers' Party (WP) chairman Sylvia Lim by her lawyer yesterday was stretched out by a tussle over the nature of questions that should be allowed during the process.

Senior Counsel Chelva Rajah, representing Ms Lim, said he was entitled to get her to explain further on matters brought up during cross-examination.

But Senior Counsel Davinder Singh said the answer Ms Lim gave him earlier to one of his questions during cross-examination on Monday was "clear and unequivocal".

Mr Singh had asked her whether she and her elected WP MPs were prepared to suppress information and breach their duties so that they could get the appointment of a new managing agent approved.

Ms Lim, who is one of eight defendants being sued for alleged breach of their fiduciary duties, replied that she disagreed.

Yesterday, picking up from where Mr Singh had left off, Mr Rajah tried to ask Ms Lim more about it. But Mr Singh interjected and said there was "no uncertainty" in Ms Lim's answer.

Mr Rajah countered that allegations were made, as far as the elected WP MPs were concerned, that they had misled the members of Aljunied-Hougang Town Council so they could get FM Solutions & Services (FMSS) appointed in 2011.

Mr Rajah said he was entitled to explore with Ms Lim whether the allegations can "hold water" or otherwise. He added that the re-examination should allow him to deal with issues raised in cross-examination that may not have been addressed.

Mr Singh argued that this should not be so as re-examination will be used as an opportunity to "take off as a galloping horse", and to ask all kinds of questions because they are deemed relevant.

After much back and forth between the two lawyers, Justice Kannan Ramesh said that if the answer of a witness during cross-examination was clear, there was no need for further explanation, and Ms Lim's answer was "emphatic".

Justice Ramesh said he had to agree with Mr Singh's objection.

Mr Rajah responded: "So be it."

But Ms Lim was given the opportunity to clarify other answers.

Ms Lim said yesterday that it would have been "redundant" to disclose the stakeholding of FMSS to the town councillors during a meeting they had on Aug 4, 2011, to choose a managing agent.

Among the six appointed councillors, one was a long-time Hougang resident, and the others knew who the main owners of FMSS were.

But Mr Singh stood up and said that evidence about other people's knowledge is "inadmissible".













Workers’ Party MPs make public appeal to raise money to pay for AHTC lawsuit
WP trio appeal to public for funds to fight cases
By Rachel Au-Yong, The Straits Times, 25 Oct 2018

The Workers' Party (WP) town councillors embroiled in a multi-million-dollar civil suit over alleged improper payments have raised at least $65,000 to pay their legal fees, after launching a crowdsourcing appeal yesterday evening.

"We need financial resources to fight the legal battle and to deal with the prospect of being made a bankrupt," WP chairman Sylvia Lim, secretary-general Pritam Singh and former chief Low Thia Khiang said in their blog In Good Faith yesterday.

They said they have paid $600,000 to their lawyers for work done so far, using their own savings and contributions from friends. This has "depleted our personal resources", they said.

"We have not used any funds from the Workers' Party," they added.

Ms Lim yesterday confirmed to The Straits Times that the appeal was legitimate.

The trio and two other town councillors are facing two suits over $33.7 million in alleged improper payments - one brought by Aljunied-Hougang Town Council as directed by an independent panel, and the other by Pasir Ris-Punggol Town Council.



The suits claim that the quintet breached their fiduciary duties, and have to repay the improper payments made. They are represented by Senior Counsel Chelva Rajah from Tan, Rajah & Cheah in the case now before the High Court. The trial, which began on Oct 5, is scheduled to run until Nov 2.

"The claims against us are unfounded. We have acted in good faith, and did what we believed to be in the best interests of our residents and the town council," the MPs said.

"We will fight the claims vigorously. If we lose the suits and are adjudged to pay large sums of money, and are unable to pay, we would face bankruptcy… We now appeal to the public for financial support," they wrote.



If the MPs are found liable for the improper payments and cannot pay up, they risk being declared bankrupt and having their assets seized. MPs who are made bankrupt will also lose their parliamentary seats.

The MPs sought public contributions via bank transfer, cheque and to Ms Lim's PayNow account. They also asked donors to include an e-mail address so they could thank them.






















AHTC Trial DAY 13: 23 Oct 2018

Workers' Party chairman Sylvia Lim agrees that media statement about managing agent's fees was untrue
Under repeated questioning from lawyer Davinder Singh, she admits she knew it was a lie
By Adrian Lim, The Straits Times, 24 Oct 2018

Workers' Party (WP) chairman Sylvia Lim conceded in the High Court yesterday that a statement she issued to the media in August 2011 was inaccurate and "not true".

Ms Lim had informed the media then that the appointment of a new managing agent, FM Solutions & Services (FMSS), by the Aljunied-Hougang Town Council (AHTC) would not incur any additional agent fees.

But she had omitted a one-time fee FMSS had charged the town council for the hiring of additional staff - a detail about which she was questioned repeatedly by Senior Counsel Davinder Singh.

Ms Lim insisted initially that she had no intention to mislead when drafting the statement. But this prompted a protracted exchange, during which Mr Singh asked her again if to knowingly state an untruth is to lie.

After pausing for a while, she replied: "Yes."



Yesterday was her fourth day on the stand being cross-examined by Mr Singh in a multimillion-dollar civil lawsuit against eight people, including three WP MPs.

The issue in question was whether the statement about FMSS that Ms Lim gave to newspapers and social media was - to her knowledge - false.

She said she was conveying the "steady state" of FMSS' charges. She added that she could have included the one-time fee paid to FMSS but "didn't think it was material since it was a one-off expense".

"I can agree that I could have been more accurate, but I didn't intend to mislead," she added.

Mr Singh followed it by asking whether "to knowingly state an untruth is to lie".

"I would say I was very careless," she replied.

After he repeated his question several times, she said: "I don't agree in so far as lie implies a dishonest intention."

For 10 minutes, they went back and forth, with Mr Singh telling Ms Lim that she was "fencing" and "evading" his question.

Eventually, when she was asked yet again whether knowingly stating an untruth is to lie, she said "yes".

Mr Singh also asked if any of the elected WP MPs, who received a copy of the media statement, asked for a correction by Ms Lim or sent a correction to the media. Ms Lim said they did not.

He then charged that she "knowingly stated an untruth to the entire country", including her residents, about how much money was going to be spent by engaging FMSS.

Mr Singh noted that Ms Lim had also repeated this same point - that AHTC was not incurring additional fees by using FMSS - in her affidavit, another untruth.

She eventually agreed.


Earlier, Mr Singh also highlighted that the August 2011 media statement had stated "no WP member has any interest in FMSS".

Mr Singh asked Ms Lim why she did not disclose to the public that the main shareholders of FMSS - Ms How Weng Fan and her late husband Danny Loh - were WP supporters, and that the remaining shareholders had some association with the party.

Ms Lim replied that the purpose of the statement was to inform the public of a smooth handover of the town council to the new managing agent, and information like the shareholding of FMSS would not have been relevant.

"There was nothing sinister about it," Ms Lim told the court.

Earlier, Mr Singh had also asked her why Ms How's and Mr Loh's shareholding in FMSS was not disclosed when AHTC awarded their company the Essential Maintenance Service Unit (EMSU) contract in September 2011.

This was a "second opportunity" to inform town councillors of their ownership of FMSS, he said.

However, he noted that Ms Lim had thought it relevant to dis-close this information at a town council meeting on Aug 4, 2011, when councillors decided to hire a managing agent.

He asked why there was a difference in approach.

Ms Lim initially said the FMSS' shareholding was not material to the decision to award the EMSU contract.

But she later conceded there should have been similar considerations in both cases.

She agreed with Mr Singh that Ms How's and Mr Loh's stakes in FMSS should have been disclosed, to "make the records more robust" and that the information was relevant.

Ms Lim, Ms How and FMSS are among the eight defendants in the lawsuit, which centres on $33.7 million in payments AHTC made from 2011 to 2015 to FMSS and its service provider, and which are alleged to be improper and void.

Ms Lim is expected to take the stand again today.

In the course of his cross-examination over the past four days, Mr Singh crossed swords with Ms Lim on several occasions.

While he said that she had lied to her town councillors and Parliament by giving the false impression that AHTC was forced to upscale an IT system because a software firm terminated its contract, she disagreed with the charge.

But Ms Lim admitted she and her fellow MPs had breached their duties in failing to disclose FMSS' rates to the rest of the town council members during a meeting.










Lengthy exchange over media statement
The Straits Times, 24 Oct 2018

Senior Counsel Davinder Singh yesterday questioned Workers' Party (WP) chairman Sylvia Lim at length about a media statement which she issued in August 2011 on her town council's appointment of FM Solutions & Services (FMSS) as its new managing agent.

Ms Lim told the media then that the Aljunied-Hougang Town Council (AHTC) would not incur any additional fees.

This was untrue, Mr Singh charged during his cross-examination, as AHTC had to pay a one-time charge to FMSS for hiring new staff.

Here is an edited excerpt of the exchange.

Davinder Singh (DS): That (media) statement was to your knowledge false?

Sylvia Lim (SL): I did not think it was false at the time I wrote it. I was conveying the steady state... There was a one-time expense. I can agree that I could have been more accurate, but I didn't intend to mislead.

DS: My question is that, that statement is untrue. Do you agree?

SL: I can accept that it is not accurate.

DS: I didn't ask you that question. Do you agree it was untrue? Ms Lim?

SL: It is not true.

DS: And you knew it was not true.

SL: I would have known, yes.

DS: I asked you, that to knowingly state an untruth, is to lie?

SL: I would say I was very careless.

DS: You agreed you knew it (the media statement) was untrue when you made it. My question is (that) to knowingly state an untruth is to lie. Do you agree?

DS: Ms Lim, minutes have passed. We are waiting for an answer.

SL: I don't agree in so far as lie implies a dishonest intention.

DS: My question is to knowingly state an untruth is to lie. Do you agree?

SL: The time (when) I drafted this media release, I did not have an intention to mislead. I agree it is not accurate.

DS: I am asking a simple question. If you can't grapple with this simple moral point, then I am afraid there are serious difficulties. If someone knows that something is untrue, and he communicates it, then he is lying. Do you agree?

SL: Lying implies a dishonest intention.

DS: To knowingly state an untruth is to lie. Ms Lim, you are fencing, you are evading... So, to knowingly state an untruth is to lie?

SL: Yes.

DS: You have already said you knowingly stated an untruth. You said it was to the entire country, including your residents. It was about the amount of money that was to be spent. You have already confirmed that the elected MPs who knew about the untruth did nothing to correct the position. And you have repeated and reiterated that position in your affidavit, correct?

SL: There was no correction made.

DS: Do you agree?

DS: Ms Lim, please, it has been a few minutes.

SL: Yes.










FMSS contract for essential services comes under scrutiny
By Seow Bei Yi, The Straits Times, 24 Oct 2018

FM Solutions & Services (FMSS) began taking care of the Aljunied-Hougang Town Council's (AHTC) essential maintenance in October 2011, although there was no written agreement allowing it to do so.

This "was a breach on the part of the entire town council", Senior Counsel Davinder Singh charged in the High Court yesterday.

Yes, Workers' Party (WP) chairman Sylvia Lim conceded as she was being cross-examined for the fourth day, during which the circumstances surrounding AHTC giving its Essential Maintenance Service Unit (EMSU) contract came under scrutiny.

While she contended there had been a verbal agreement between AHTC and FMSS, she agreed that Town Councils Financial Rules state "there shall be a written agreement before the works or supply of services begin" for works, period quotations and contracts.

"(It was) not in my consciousness at that time," she said, adding it did not occur to her that this would be a problem.


Ms Lim, however, strongly disputed several other issues Mr Singh put to her yesterday.

Among them was his claim that she had created a sense of "urgency on the basis of a fictional verbal agreement" so as to waive a tender for the EMSU contract.

In her affidavit, Ms Lim had said that incumbent managing agent CPG Facilities Management initially agreed verbally to continue providing EMSU services to AHTC for another six months.

This is why, when CPG said in September 2011 that it was unwilling to continue, it "came as a surprise", she added. By then, there was no time to call a tender for a new EMSU contract starting on Oct 1, hence the need to waive the tender process.

But Mr Singh cast doubt on this account.

He noted that unlike Ms Lim, AHTC's then deputy secretary How Weng Fan had not cited its verbal agreement with CPG in her affidavit when recounting the waiver of tender for the EMSU contract.

Mr Singh then referred to an Aug 26, 2011, letter in which AHTC asked CPG and its other provider, EM Services, to extend their services for another six months, suggesting that if there were indeed an earlier agreement, it would have been reflected in this letter.

Ms Lim said there may have been reasons for the phrasing used in the letter, disagreeing with his proposition that it was therefore unlikely an agreement took place before its date.

Mr Singh then sought to establish whether there was an agreement outlining the terms and specifications for the 2011 EMSU contract.

Ms Lim said: "There (was) no written agreement, as I said, between FMSS and AHTC, setting out the terms."

He then asked if there was an e-mail, to which she said: "I think there may not have been an e-mail, but the expectations or specifications were communicated to FMSS during our interview with them."

"Let's forget about the oral side of the picture," said Mr Singh. "Let's just focus on the documents. How was AHTC going to enforce the specifications which (were) approved against FMSS?"

"It was communicated to them already," she said, adding later it was done when they met on Sept 18.

But Mr Singh said the town council would not have been protected if these agreed specifications were not in a written contract signed by both sides.

Ms Lim concurred that they would have to form the basis of any eventual contract that is awarded, though she maintained there was an oral agreement between FMSS and AHTC.

Mr Singh then asked why FMSS' presence at the Sept 18 meeting was not mentioned in the affidavits of those who were supposed to be there, including a Mr Vincent Koh. Ms Lim maintained they were present, but could not recall how the meeting proceeded.

He also asserted that when FMSS made its presentation to the town council to be the new managing agent, it also recommended that it be given the EMSU job. But Ms Lim was adamant it was part of FMSS' proposal of the services the firm would offer.

After he asked her several times if she agreed that FMSS was recommending that it provide the services, Ms Lim's lawyer, Senior Counsel Chelva Rajah, interjected to say she had given an answer.

Mr Singh called it the most disingenuous of answers, adding that he was entitled to pursue the issue: "A witness should not be allowed to treat this so lightly and ignore the word that is staring everyone in the face."

Judge Kannan Ramesh said: "I will allow you a little bit more Mr Singh, (but) I think you have to draw a line somewhere." He reminded Ms Lim to answer the question in substance, and she agreed the word "recommended" was used.

This was not the first time yesterday that Justice Ramesh asked Mr Singh to "draw a line" at some point in his questioning, after interjections from Mr Rajah.

Earlier in the day, Mr Singh and Ms Lim had also argued over whether the town councillors understood the key terms of the FMSS contract and if it would be based on the entire contract of the incumbent CPG. Mr Singh cast doubt that they knew the FMSS contract would follow that of CPG.

As Ms Lim was pressed on the matter, Mr Rajah interrupted: "This is the fourth time this question was asked." Each time, it was answered the same way, he added.

Mr Singh countered that he was "entitled to challenge the credibility of the witness".

Additional reporting by Adrian Lim






Lawyer, WP chairman Sylvia Lim disagree on whether town council position was compromised
By Seow Bei Yi, The Straits Times, 23 Oct 2018

When the Aljunied-Hougang Town Council (AHTC) hired a new managing agent in August 2011, it did so with "uncertain" contract specifications.

It also compromised the Workers' Party (WP)-led town council's contractual position, charged Senior Counsel Davinder Singh in the High Court on Tuesday (Oct 23).

Ms Sylvia Lim, WP's chairman, disagreed with his proposition, which was put to her on the fourth day of her cross-examination in a multimillion-dollar civil lawsuit that involves eight defendants, including her and two other WP MPs.


She disputed the view that the proposal FM Solutions & Services (FMSS) had put up at a June 2 meeting, to be AHTC's new managing agent, was based only on some parts of the contract of the incumbent agent, CPG Facilities Management.


Mr Singh had noted that the FMSS proposal only said it would follow the "specifications" of CPG's contract.


But in the CPG's contract, there was a section titled "Specifications" as well, he pointed out.


So, how then did the town council members understand the proposal to cover the other terms in the rest of the CPG contract as well, and not just the section titled "Specifications"? Mr Singh asked.


Ms Lim maintained, through repeated questioning, that there was an understanding among the town councillors that FMSS would keep closely to CPG's entire contract.


"Was it a responsible thing for the town councillors to have agreed to appoint FMSS on the basis, or without knowing, what the key terms were?" Mr Singh asked.


Ms Lim replied: "At the meeting, I asked them for approval and endorsement (of my decision to pick FMSS) and after discussion, they agreed."


Mr Singh asked again: "You are the chairman... you put something on the table, you don't explain what the key terms are and no one asked about the key terms. No one asked to look at the contract, and at the end of the meeting, no questions were asked...


"Having regard to those facts, was it a responsible thing for the town councillors to do, to approve the contract with FMSS without knowing the key terms (of it)?"


Ms Lim replied: "Mr Singh, I think there was an assumption that the terms of the CPG contract enabled CPG to manage Aljunied town… If FMSS could follow closely to those terms, then it should be okay."




Another point Mr Singh raised is that since there was a waiver of tender in the appointment of FMSS, the town councillors had to be even more attentive to the terms of contract, since there were no competitors involved.


She agreed.


"So, if you were a town councillor... and a new managing agent contract was being entered into, and you were sitting around the table, not knowing what the rates were and not knowing what the key terms were, would you consider it your duty… to ask about the key terms?" Mr Singh asked.


Ms Lim said: "But I would know what is being tabled is that CPG's existing contract would be used as a framework… I know that that's the principle."

She added that after FMSS presented its proposal to the elected MPs - who were also town councillors - they discussed the issue and came to the understanding that as far as possible, the entire contract would apply.

Mr Singh also highlighted that FMSS' use of the word "specifications" had not changed in its Letter of Intent, which was written after the presentation.

Ms Lim said no one had taken issue with FMSS' wording since they understood that its proposal would be based on the entire CPG contract and not just one section.

On the point that FMSS would adopt the terms of the CPG contract "as far as possible", Mr Singh asked: " 'As far as possible', Ms Lim, as a lawyer, does that give certainty to the contract?"

She conceded: "Well, there would be some uncertainty… where the clauses could not apply."

He put to her: "So you were prepared to have the town council approve a contract when you knew that there was uncertainty."

She said: "These were only specific areas. It's not as if the contract, key terms and so on were not fixed."

Mr Singh then questioned her on why the elected MPs met for discussions when they had no concerns about what the word "specifications" referred to.

Ms Lim said the town councillors met regularly to discuss matters relating to the contract, given its importance.

Mr Singh continued to cast doubt on her account, saying that if there were no concerns following the June 2 meeting, "it follows that there couldn't have been a discussion... about what it meant".

Ms Lim said the fact that FMSS would adopt CPG's terms where possible was a key issue, and therefore, naturally cropped up in subsequent talks.

When Mr Singh asked her about this point another three times, Ms Lim's lawyer, Senior Counsel Chelva Rajah, interjected: "This is the fourth time this question was asked. Each time, (it) was answered that (it was) because (they) saw it as the basis on which FMSS was going to provide the services."

Mr Singh countered that he was "entitled to challenge the credibility of the witness".

Judge Kannan Ramesh allowed him to continue but reminded him to "draw a line", as Ms Lim had already given an answer.

Mr Singh said: "The only reason you talk about that discussion is that you allowed the proposal, which relates to the specifications only, to be tabled to the town council and (be) approved."

"In other words, you allowed the town council to compromise its contractual position by agreeing to adopt the specifications, and even then, the specifications were, as you accept, uncertain," he charged.

Ms Lim disagreed that only the part about the specifications was being tabled at the town council meeting.

Asked by Justice Ramesh if she knew what information FMSS had used to formulate its proposal, and whether it was given a copy of the contract, Ms Lim said: "I don't know how they came up with this (as of) the 2nd of June."










AHTC Trial DAY 12: 22 Oct 2018

WP chairman Sylvia Lim agrees MPs breached duties by not disclosing managing agent FMSS rates
Sylvia Lim admits after repeated questioning by lawyer that they didn't comply with duties
By Rachel Au-Yong, Political Correspondent, The Straits Times, 23 Oct 2018


Workers' Party (WP) chairman Sylvia Lim yesterday admitted that she and her fellow MPs had breached their duties by failing to disclose the rates of their managing agent to the rest of the Aljunied-Hougang Town Council (AHTC) during a meeting.

Her admission came only after a 35-minute tussle on the stand, during which Senior Counsel Davinder Singh tried to get her to agree that the WP MPs, including former party chief Low Thia Khiang and his successor Pritam Singh, had failed in their roles as town councillors.

Ms Lim is among eight defendants in a multimillion-dollar civil suit over alleged improper payments filed by AHTC and Pasir Ris-Punggol Town Council (PRPTC). Mr Singh is representing PRPTC.

Asked the same question repeatedly by Mr Singh - whether her fellow MPs had also breached their duties by not informing the rest of the town council about the rates charged by FM Solutions & Services (FMSS) - Ms Lim said the rest of the town council looked to her to set the agenda as chairman.

She said she did not include the rates in a report she presented to the town council on Aug 4, 2011, but "there was nothing sinister in that".

Mr Singh then asked if it was responsible for town councillors to accept rates they did not know.

Ms Lim agreed that they should know the rates charged by FMSS.

But while she also conceded that it was the duty of the chairman who knew the rates to disclose this to other town councillors who did not, she sought to avoid getting pinned down on whether the other elected members had a responsibility too.

Among her various answers, she said: "They delegated the decision to me… I take the responsibility on myself."

But Mr Singh was adamant that she answer the question: "That is very, very big of you, but you agreed that they too were under a duty… Knowing that you hadn't (disclosed the rates), that was a breach on their part as well, agree?"

Ms Lim eventually replied: "I don't think it is fair for me to answer this question."

"If it wasn't fair, there would be an objection and (Justice Kannan Ramesh) would have stopped me. It is not for you to decide if it is fair," said Mr Singh.

But Ms Lim would only say that the omission was "inadvertent" and that it was her responsibility alone.



After around 30 minutes, the judge stepped in: "Ms Lim, the question has been asked several times over several minutes, could you try to answer it please?"

The exchange between Ms Lim and Mr Singh went on for another five minutes. Mr Singh said: "You have agreed with me that (the MPs) didn't disclose the rates, so they should have complied with their duties but didn't… Having agreed they should have disclosed the rates - and we know they didn't - it follows they didn't comply with their duties, right?"

Yes, Ms Lim replied.



Later, Mr Singh sought to establish that she breached the Town Councils Financial Rules by not calling for a tender or justifying a waiver for close to $150,000 in payments to FMSS.

These payments, he added, covered work the firm did from June 15, 2011, to July 14, 2011. But when the town council convened on Aug 4, 2011, to waive the tender to hire FMSS, it did so for the one-year period from July 15 only, he noted. "We know as lawyers that approvals only cover the points that are approved… Therefore to that extent there was a breach of the law," he said.

Ms Lim agreed.

He asked why this sum, which was "no small change", was not communicated to the rest of the town council.

Ms Lim replied: "It just didn't occur to me at the time."

But Mr Singh expressed doubt, given her previous testimony that showed how she and other MPs had "carefully thought" about the meeting, such as when it should be called and what should be disclosed.

"Isn't it the case that there was an arrangement among you and the elected MPs to be very selective about what you told the other town councillors?" he said.

Ms Lim disagreed.

Mr Singh then asked what would have happened if the town council did not approve the waiver and FMSS' appointment.

Ms Lim said the town council would have to discuss how to handle the situation without disrupting the services to residents.

"That would have been a bit of a bother, to put it mildly," said Mr Singh.

Ms Lim said: "Agreed, but we would have had to find a way to work it out."

Mr Singh charged: "But you couldn't afford (to work it out). You wanted FMSS' arrangements approved… which is why where it was necessary to withhold information, you breached your duties," he said.

Ms Lim replied: "The councillors were familiar with (FMSS majority owners How Weng Fan and Danny Loh) and the circumstances of FMSS being set up. I don't agree in that sense that they had the relevant information withheld."





Sylvia Lim concedes fellow Workers' Party MPs 'breached duties'
By not disclosing to other town councillors the rates charged by an incoming managing agent, the elected members had failed to comply with their obligations to residents, charged the plaintiff’s lawyer.
By Justin Ong and Lianne Chia, Channel NewsAsia, 22 Oct 2018

Following a half-hour impasse that saw Senior Counsel Davinder Singh ask for “respect” to be shown to the court, Workers’ Party chairman Sylvia Lim on Monday (Oct 22) acknowledged that she and fellow elected Members of Parliament (MPs) for Aljunied-Hougang Town Council (AHTC) had breached their duties by not disclosing the cost of a new managing agent to other town councillors.

Ms Lim, Low Thia Khiang, Pritam Singh and other town councillors are embroiled in a civil lawsuit over millions of dollars of “improper” payments that were allegedly made to new managing agent FM Services and Solutions (FMSS).

They are being sued by AHTC as well as Pasir Ris-Punggol Town Council (PRPTC) for alleged breaches of fiduciary duty in the appointment of FMSS.

Mr Singh, the lawyer for PRPTC, had earlier on Monday already subjected Ms Lim to a bruising interrogation.

He resumed his cross-examination in the afternoon by noting that the former AHTC chair had not reproduced for the rest of the town council the rates charged by FMSS, despite it being the same as those of the outgoing managing agent, CPG Facilities Management.

“This is the most important contract of the town council,” said Mr Singh. “When you waive a tender, you don’t have the advantage of competitive rates - so all the more reason to know what the rates are going to be. So why didn’t you tell the rest of the town council what the rates were going to be?”

Ms Lim said there was “nothing sinister” in play and that the “key thing” was FMSS committing to taking over at CPG’s prevailing rates. She acknowledged she should have reproduced the rates, but also said it was an inadvertent omission not done with any deliberate intent.

“Do you agree it’s the duty of the chairman and others who knew the rates to disclose them to other town councillors, so they would know the rates before deciding?” Mr Singh asked.

Ms Lim agreed.

“Do you agree that duty was breached by you and other elected members?” Mr Singh added.

“In the sense that I should have included rates in my report, I agree,” Ms Lim replied. But she refused - initially - to agree the same of the other elected members, reiterating that “they had delegated the responsibility of the presentation” to her.

“Well, that’s very big of you, but you agree with me that they too were under a duty,” Mr Singh fired back.

“Answer my question … Ms Lim, we are waiting for an answer,” he pressed, in a refrain that would be repeated over the next 30 minutes.

“I don’t think it’s fair for me to answer the question,” said Ms Lim.

To which Mr Singh said: “If it wasn’t fair, there would be an objection and His Honour would have stopped me. It’s not for you to decide whether it’s fair.”

But Ms Lim would only say: “They didn’t disclose the rates.”

Said Mr Singh: “You agree they had a duty to disclose rates. You agree they did not disclose the rates. If someone has a duty to do something and he doesn’t do it, it follows the duty has not been complied with.”

After a long pause, Justice Kannan Ramesh stepped in to ask Ms Lim to respond. “The question has been asked several times over several minutes. Answer it please,” he said.

Ms Lim repeated her stance that the rates had not been disclosed, adding that the rest of the town councillors should have been informed.

Mr Singh said: “I can understand if you are fencing with me. But it’s not just me asking the question, it’s the court. Please show some respect.

“When you say they should have disclosed the rates, in other words - they should have complied with their duties but they didn’t,” he re-emphasised.

“Yes, your honour,” Ms Lim finally said.



SYLVIA LIM AND OTHER MPS “VERY SELECTIVE” ABOUT INFORMING OTHER TOWN COUNCILLORS: DAVINDER SINGH

During the cross-examination, Mr Singh also accused Ms Lim of breaching her duties in another area - by withholding information from her fellow town councillors with regard to a payment made to FMSS prior to the start of FMSS’ managing agent contract on Jul 15, 2011.

He said Ms Lim had an arrangement with the other WP MPs to be “very selective” about what they told the other town councillors - an allegation which Ms Lim denied.

Referring to a report circulated to other town councillors, Mr Singh noted that the report does not show that FMSS would begin charging the town council on Jun 15, a month before its contract officially began. He added that one particular invoice had in fact already been paid by AHTC at the end of June.

Ms Lim maintained that the report shows that FMSS would take over the existing employees of Hougang Town Council from Jun 15, and that it would also engage new employees as necessary in preparation for the takeover. “The implication is clear,” she said, adding that “it is understood” from a paragraph in the report that FMSS would have taken over as the managing agent from Jun 15.

She agreed, however, that specific approval for FMSS to begin charging for the period of Jun 15 to Jul 15 had not been given by the town council. She also added that information about the cost of hiring new employees for the month of June should also have been given to the town councillors.

After a further back-and-forth between the two, Mr Singh charged that Ms Lim, as well as the other elected WP MPs, had decided to give “as little information” as possible to the town council about “relevant events”. Ms Lim disagreed, saying Mr Singh’s allegation was not true.

Mr Singh then put it to Ms Lim that she “could not afford” to have the town council not approve the appointment of FMSS, pointing out that there would be “severe disruption” to residents had the town council rejected it.

While Ms Lim agreed on the point, she said she “did not know” about Mr Singh’s characterisation that she could not afford to have FMSS rejected.

“But you wanted the FMSS arrangement approved,” countered Mr Singh. “Which is why where it was necessary to withhold information ... you breached your duties, you all prepared to do that to get the approval.”

Ms Lim disagreed.

The trial continues on Tuesday, with Mr Singh expected to resume his cross-examination of Ms Lim.





WP chairman Sylvia Lim knew her duty to inform town council secretary of tender waiver but did not do so, court heard
By Seow Bei Yi, The Straits Times, 23 Oct 2018

Workers' Party (WP) chairman Sylvia Lim did not inform the Aljunied-Hougang Town Council's (AHTC) then secretary about a waiver of tender for its new managing agent despite knowing she had a duty to do so for him to discharge his duties, the court heard yesterday.

This emerged on the third day of her cross-examination by Senior Counsel Davinder Singh, when Ms Lim conceded that given the town council rules, then secretary Jeffrey Chua needed to know that AHTC had waived a tender and appointed FM Solutions & Services (FMSS) as its managing agent in July 2011.

Section 20 of the Town Councils Act says that a town council's secretary is responsible for its "proper administration and management".

"For Mr Chua to discharge his duty... you would have to share with him the fact of the binding commitment, the fact that no tender had been called and the fact that there had been a waiver," Mr Singh said.

"With hindsight, I agree with you," Ms Lim replied.

But she contended yesterday that although she did not specifically tell Mr Chua about the waiver of tender, he already knew of it.



Ms Lim and seven other defendants are being sued over alleged improper payments of millions of dollars stemming from the appointment of FMSS.

Yesterday, Mr Singh questioned Ms Lim about a July 6, 2011, e-mail she sent to Ms How Weng Fan, a majority owner of FMSS and then deputy secretary of AHTC.

In it, Ms Lim asked if it would be all right to defer the formal appointment of FMSS until after Aug 1, when incumbent managing agent CPG Facilities Management was due to step down - or if it was necessary to get the town council to waive the tender first. In the latter scenario, CPG would "needlessly" be involved, as Mr Chua was AHTC's secretary and CPG's managing director.

Mr Singh noted that CPG was still the managing agent for AHTC in July, to which Ms Lim replied that CPG would not be interested in details of the new agent's appointment as they already wanted to leave. She later added the details were not of concern and not relevant to CPG.

Asked if CPG said they had no interest in matters that would normally be tabled at town council meetings, Ms Lim said this was implied in their communications.

The Senior Counsel later asked Ms Lim if Mr Chua knew there had been a waiver of tender, to which she said: "He would have known."

Mr Singh then put it to Ms Lim that she was inconsistent, in first saying there was no need for CPG to know about the waiver, and later saying Mr Chua already knew.

Ms Lim disagreed, and said Mr Chua would have known there was a new managing agent appointed and that no tender was called.

"He doesn't know the terms and conditions, and he didn't need to know that," she said.

Noting that Ms Lim had earlier said the matter was not of Mr Chua's concern, Mr Singh charged: "The reason you changed your evidence is that you realise that you breached Section 20. You caused and created a situation together with your fellow elected MPs, of putting a secretary in a situation where he could not discharge his functions. Isn't that the reason for your sudden change in your position?" he asked.

Ms Lim paused for about two minutes before replying: "I will just say that (Mr Chua) was an outgoing secretary, and he knew what was needed. That is all I will say."

After repeated questioning, Ms Lim conceded: "I agree that (Mr Chua) did not know the full details... that seemed to be required under Section 20."

Mr Singh said she again did not answer his question. After another long pause, he said: "You have now had many chances to answer that question. A lot of time has passed."

Ms Lim replied: "Well, Mr Singh, I have to agree... what we did was what we felt was necessary that the handover was smooth and in the interest of the residents."









AHTC trial: Sylvia Lim ‘inconsistent’ in giving evidence: Davinder Singh
By Lianne Chia and Justin Ong, Channel NewsAsia, 22 Oct 2018

After being repeatedly accused of providing “inconsistent” evidence, former Aljunied-Hougang Town Council (AHTC) chairman Sylvia Lim admitted that the town council’s former secretary had not been kept fully informed about details necessary for him to discharge his duties as required under the law, the court heard on Monday (Oct 22), the 12th day of the landmark AHTC trial.

The secretary, Mr Jeffrey Chua, was also the managing director of outgoing managing agent (MA) CPG Facilities Management.

These details that Mr Chua was kept in the dark about, charged Senior Counsel Davinder Singh, included the fact that a new managing agent - FM Services and Solutions (FMSS) - was being appointed, and a tender was to be waived.

Ms Lim, who took the stand for a third day, said that Mr Chua “did not know the full details as required under Section 20” of the Town Councils Act. She later elaborated that by this, she was referring to the secretary’s duty to ensure proper records are kept of decisions made.

“What we did was what we felt was necessary to ensure there was a smooth handover and it was in the interests of the residents,” said Ms Lim.

Ms Lim, along with fellow MPs Low Thia Khiang and Pritam Singh, and AHTC councillors Kenneth Foo and Chua Zhi Hon, are being sued by AHTC and Pasir Ris-Punggol Town Council (PRPTC) for alleged breaches of fiduciary duty relating to the appointment of FMSS.

This, along with “flawed governance” of the town council and “improper” payments of more than S$33 million made mostly to FMSS, is the subject of two lawsuits that also are aimed at FMSS employees How Weng Fan and Danny Loh, who also held positions at AHTC.


“YES OR NO”

Ms Lim, who is also a Member of Parliament for Aljunied GRC, was being cross-examined on the witness stand by PRPTC’s Senior Counsel Davinder Singh on Monday (Oct 22).

The morning session focused on an email sent on Jul 6, 2011 by Ms Lim to Ms How - a former AHTC deputy secretary who was also a director and shareholder at FMSS.

Ms Lim had asked if a town council meeting could be deferred until after Aug 1 – by which time CPG would have stepped down – or if the council had to be involved to waive the tender for a new MA, in which case it would “needlessly” involve CPG.

“For the terms of appointment of a new MA, I don’t think CPG was interested because they wanted to leave in any case, so there was no need to discuss these details in front of them,” Ms Lim explained. “I don’t think these details were of any concern or relevance to CPG.”

A tense back-and-forth ensued with Mr Singh repeatedly demanding that Ms Lim answer his questions with a “yes or no”. The PRPTC lawyer then pointed out that for Mr Chua, the outgoing secretary, to discharge his duty to ensure the town council complies with the law, he must be given whatever information is relevant for that purpose.

“The secretary, Mr Jeffrey Chua, was being kept out of the fact that there had been a binding commitment,” said Mr Singh. “That tenders had not been called, that the matter had not been put before the town council, and the issue of the waiver had also not been put before the town council: Sitting there today Ms Lim, do you say it was not necessary for Mr Jeffrey Chua to know all that?”

Ms Lim said that Mr Chua knew a new MA had been appointed, and that “he would have known” there was a waiver of tender.

“Really?” Mr Singh raised his voice. “If you go to your email on Jul 6, isn’t the entire purpose to ask Ms How ‘do we need Jeffrey Chua to know about the waiver’?

“From saying there is no need for CPG to know, to now saying CPG knew about it - it’s being inconsistent.”

Ms Lim denied the repeated charge, saying the email had to be viewed in the entire “context” of terms and conditions of appointing FMSS as the new MA - specific details which Mr Chua “did not know” and “did not need to know”.

To which Mr Singh charged: “The reason you changed your evidence from CPG not needing to know everything to CPG knowing everything except the terms, is because you realise you’ve breached section 20 of the Town Councils Act.

“Together with your fellow MPs, you’ve created a situation where the secretary cannot discharge his functions. Isn’t that the reason for the sudden change in position?”

What followed was a lengthy stand-off with Ms Lim at one point noting: “I will just say that Jeffrey Chua was an outgoing secretary, and he knew what was needed. That's all I will say.”

A dissatisfied Mr Singh then called on Justice Kannan Ramesh to “let the record reflect that Ms Lim refuses to answer the question”. Several minutes later, the Workers’ Party MP finally conceded that she had “to agree” with Mr Singh.

SYLVIA LIM “CONCOCTED EVIDENCE”: DAVINDER SINGH

During the cross-examination, Mr Singh also argued that evidence Ms Lim had given – that it had “slipped her mind” to bring up information about the shareholdings of FMSS during a town council meeting in August 2011 – was “concocted”. This included the results of an Accounting and Corporate Regulatory Authority (ACRA) search performed on the company.

Pointing to emails that Ms Lim had sent on Aug 3, 2011, a day before the meeting to fellow WP MPs Yaw Shin Leong and Low Thia Khiang, Mr Singh noted that she had indicated that she had said the information “can and should be disclosed”, and asked her repeatedly why, if she had felt this way, the information had not been shared with councillors at the meeting.

Mr Yaw was MP for Hougang and was expelled from the Workers' Party in February 2012 over allegations of extramarital affairs.

Ms Lim at first said that while doing so would have made the records more robust, she “didn’t think” councillors would want to know “all those details”. She later said that while she felt it was important to disclose the information, it “must have slipped her mind” and it was not produced during the meeting.

To that, Mr Singh pointed out that this evidence was coming out for the first time, and was not stated in her affidavit or in the defence’s opening statements.

“But it’s the truth,” Ms Lim countered.

“I have some difficulty with that,” Mr Singh responded, noting that Mr Yaw and Mr Low were also present at the meeting, but had also not brought up the ACRA search.

“Since August 2011, there have been public statements ... statements in Parliament about this,” he said. “There have been numerous occasions where this issue was ventilated.”

Accusing Ms Lim of only saying this at this point because she “had to think of an answer”, Mr Singh said the evidence that it had “slipped her mind” was “concocted”. She disagreed.

The trial continues.









Davinder Singh questions why shareholder details of FM Solutions & Services (FMSS) were not disclosed
By Seow Bei Yi and Rachel Au-Yong, The Straits Times, 23 Oct 2018

On Aug 4, 2011, the new Aljunied-Hougang Town Council (AHTC) held its second meeting, during which its members were to decide on hiring a new managing agent.

But when they decided to hire FM Solutions & Services (FMSS), some of them could have been in the dark about the firm's shareholder details, the High Court heard yesterday.

Why was the information not disclosed, Workers' Party chairman Sylvia Lim was asked by Senior Counsel Davinder Singh. It must have slipped her mind, she replied.

Earlier, she acknowledged the details would be good for the councillors' decision-making, and make AHTC's records more complete.

Ms Lim was being cross-examined for the third day in a civil suit involving eight defendants.

Mr Singh represents the Pasir Ris-Punggol Town Council, which is suing the eight for losses Punggol East allegedly suffered under the opposition-run town council.

Another point he raised was Ms Lim's e-mail on Aug 3, 2011, to former MP Yaw Shin Leong, who had asked if there was a need to reveal FMSS' exact stakeholders in the town council's minutes or report.

Ms Lim said: "We can/should enclose the Acra (Accounting and Corporate Regulatory Authority) search... let me arrange."

Mr Singh sought to show that using the word "should" implied Ms Lim considered the information relevant to the other councillors.

Ms Lim disagreed, saying several times she meant it was "good for councillors' decision-making" and for "more robust" record-keeping. She added that she did not think it would have affected their decision on FMSS.

At the meeting, the town councillors approved the waiver of tender for a managing agent and appointed FMSS for a year.

Among FMSS shareholders were Ms How Weng Fan and her late husband Danny Loh. Both were AHTC members too: Mr Loh was its secretary, and Ms How was re-appointed its deputy secretary.

Mr Singh pointed out that in the seven years since the meeting, not once had it been said that Ms Lim forgot to inform the town council of the shareholder details - not in "public, Parliament, in court, in (her) responses to KPMG reports, in (her) defence, affidavits".

"I suggest that this evidence of it having slipped your mind is concocted," charged Mr Singh.

Ms Lim disagreed. It was not the only time yesterday Mr Singh suggested she had misled others.

He put it to her that FMSS' Letter of Intent, which stated its rates, among other details of its managing agent services, was not introduced at the meeting as well.

Ms Lim replied that she had reproduced it in a report that was circulated to the other councillors.

But Mr Singh said: "Having already decided to waive (the tender) in June, you were now giving the impression to the town council, that (on the) 4th of August, there was no time to call for a tender because of the position in which (former managing agent) CPG and (software provider) AIM put us in."

Ms Lim replied: "I don't agree with your characterisation."

Mr Singh also contended that Ms Lim should have told the meeting how much AHTC was charged by FMSS for Hougang Town Council staff it took over and others it hired.

Ms Lim said: "In the interest of giving them full information, I can agree." She later conceded it did not occur to her to provide it.

Mr Singh said: "It didn't occur to you to produce the Acra search, it didn't occur to you to tell them about this figure, (or) to put the Letter of Intent on the table.

"This was a very carefully thought-through meeting. There were e-mails leading up to (it) about when should it be called, should it be postponed, what should be disclosed... what should go into the report - you amended it, and you want this court to believe that all these relevant matters didn't occur to you?"

Ms Lim replied that she had answered as honestly as she could.





AHTC Trial DAY 11: 19 Oct 2018

Sylvia Lim admits to breaching town council financial rules by not calling for tender
Davinder Singh points out that this was done without discussing any special circumstances
By Seow Bei Yi, The Straits Times, 20 Oct 2018

Workers' Party (WP) chairman Sylvia Lim admitted yesterday that she had breached Town Councils Financial Rules when she failed to call a tender for managing agent services in 2011.

The Aljunied-Hougang Town Council (AHTC) had waived a tender for managing agent services provided by FM Solutions and Services (FMSS) to Hougang SMC in June 2011, which amounted to $92,000. The AHTC merger took place after the WP won Aljunied GRC in the May 2011 General Election.

Town council rules stipulate that tenders must be called for services that are estimated to cost more than $70,000, and should be waived only "under very special circumstances and must be fully justified".

During his cross-examination on day 11 of the hearing, Senior Counsel Davinder Singh asked Ms Lim if there was any discussion about waiving a tender for services by FMSS following its June 2 proposal about providing managing agent services.

"No," Ms Lim replied.

"So, being aware, as you claimed this morning, of the town council rules, you disregarded them. You breached them. Right?" he asked.

Ms Lim said she had exercised her authority to act on behalf of the town council to waive the tender, "in circumstances of urgency".



But Mr Singh noted that there was no discussion of the urgency or circumstances of that period in Ms Lim's affidavit, "nothing in (former Workers' Party chief Low Thia Khiang's), nothing in the elected MPs' affidavits."

There was nothing on record about a waiver as of mid-June 2011, said Mr Singh, who asked Ms Lim if she agreed that was a breach.

"I have to agree, technically, yes." Ms Lim replied.

"Technically?" Mr Singh asked, repeating his question.

"On this date, I agree, yes," Ms Lim said, later adding that the date would have been around June 15.

Mr Singh later asked Ms Lim if it was correct that anyone who knew about the rules would know there was a breach, to which she said yes.

He then asked her who else among the elected WP MPs knew about the matter.

"I cannot remember distinctly but I believe Mr Low knew and I believe the other MPs also knew," she replied.



The Aljunied GRC MP is one of eight defendants in a multimillion-dollar civil suit to recover alleged improper payments.

Mr Singh also charged that FMSS was hired as AHTC's managing agent "under the cover of darkness" in 2011 to avoid calling for an open tender.

He noted that Ms Lim did not tell the other AHTC town councillors about the incorporation of FMSS at a meeting on June 9, 2011, at which she was given the authority to act for the town council. Neither did Ms Lim say that FMSS would be appointed without a tender to take over from incumbent managing agent CPG Facilities Management.

Mr Singh made the case that Ms Lim and the other WP MPs had decided not to tell the others about FMSS, so it could be appointed without questions.

Ms Lim disagreed.

Mr Singh later asked why a June 2 proposal by FMSS was circulated only to the elected MPs but not the other appointed councillors.

Ms Lim said she could not recall the date it reached the rest, and that the need to send them the FMSS proposal was superseded by the delegation of authority to her. She added that they did so, trusting her to make decisions accordingly.

Mr Singh said: "You did a dirty on your own town councillors."

She replied: "I disagree totally."

Mr Singh also asked Ms Lim why AHTC retained CPG's services for essential maintenance, but chose to release it as managing agent.

She had earlier suggested there was ground feedback against CPG and that, as it was "committed" to the People's Action Party cause, the opposition MPs might not be able to predict its behaviour.

Mr Singh noted that essential maintenance services would need to be carried out by a reliable company, and Ms Lim agreed. He made the point that if she was content to use CPG for some projects also beyond August 2011, when its contract would end, it meant her argument that there were complaints from the ground against CPG and that it could not be trusted, was "utter rubbish" and "all made up".

He also said the WP-led town council wanted CPG out so FMSS could come in, but at the same time wanted to take advantage of CPG's services.

Ms Lim disagreed, saying the projects were in advanced stages. She also said it was CPG that had suggested that it would continue.

"We agreed that it was reasonable," she said. "They did not ask to be relieved of all their projects."

Against claims that she wanted to have her cake and eat it too, Ms Lim replied: "That's very creative, Mr Singh, but that's not what it is."










Breach of Town Councils Financial Rules
By Seow Bei Yi, The Straits Times, 20 Oct 2018

On his second day of cross-examining Workers' Party (WP) chairman Sylvia Lim, Senior Counsel Davinder Singh said she had breached Town Councils Financial Rules by letting a new company take over the staff of Hougang Town Council - and charge the Aljunied-Hougang Town Council (AHTC) for the costs incurred.

Ms Lim, as AHTC's chairman, had been given authority on June 9, 2011, by others on the AHTC to exercise its powers and duties to facilitate the handover of Aljunied matters after the WP won the GRC in the 2011 General Election.

The new firm, FM Solutions & Services (FMSS), before it started running AHTC, moved the entire staff of Hougang Town Council to its payroll. FMSS then charged AHTC $92,000 for managing agent services it provided in June 2011 to Hougang.

Mr Singh said the town council rules require a tender to be called for services of this amount.

This is an edited excerpt of their exchange.

Davinder Singh (DS): So, being aware, as you claimed this morning, of the town council rules, you disregarded them. You breached them. Right?

Sylvia Lim (SL): I exercised my authority.

DS: Answer my question please. You breached them right?

SL: I waived the tender in circumstances of urgency.

DS: There was no urgency discussion, no circumstances discussion, nothing in your affidavit, nothing in (Mr Low Thia Khiang's), nothing in the elected MPs' affidavits.

SL: This waiver was discussed subsequently in the combined proposal.

DS: Ms Lim, we are now just before the 15th of June. Let's take ourselves back in time. We are now on the 13th, 14th, and we are having a chat. You have already decided no tender, and there is nothing on the record about a waiver, right?

SL: At this point, no.

DS: So that is a breach, right? You know the rules.

SL: I have to agree, technically, yes.

DS: Technically?... Ms Lim, let's move on , it is a breach, right?

SL: At this point, yes.

DS: What do you mean at this point? My question is, was there a breach of the rules, yes or no?

SL: On this date, I agree, yes.

DS: If anyone knew about the rules, they would know it is a breach, correct?

SL: Yes.

DS: Who else among elected MPs knew about this?

SL: I cannot remember distinctly, but I believe Mr Low knew and I believe the other MPs also knew.









WP chairman Sylvia Lim gave 'blank cheque' to agent to hire staff, says Senior Counsel Davinder Singh
By Rachel Au-Yong, Housing Correspondent, The Straits Times, 20 Oct 2018

Workers' Party (WP) chairman Sylvia Lim had given her town council's managing agent a "blank cheque" to hire whoever it wanted, by failing to impose a limit on the number of staff it could employ.

This was one of several examples Senior Counsel Davinder Singh gave yesterday as he sought to paint Ms Lim as someone who was careless with the monies of the residents of Aljunied-Hougang Town Council (AHTC).

Ms Lim is among eight defendants in a multimillion-dollar civil suit to recover alleged improper payments.

Mr Singh, pointing to a contract in which Ms Lim signed off as town council chairman, noted that it allowed FM Solutions & Services (FMSS) to be reimbursed for new hires for an interim period without a cap. "You gave them a blank cheque. They could have hired three, 50, 250, 700 people… Where is the limit?" he asked.

Ms Lim said the limit came in the form of a limited timeframe - by July 15, 2011 - as the hires were meant to help FMSS take over the expanded town council.

FMSS got the contract to run AHTC without a tender being called for a replacement of incumbent CPG Facilities Management, which was managing the Aljunied Town Council.



Mr Singh then asked if she thought it was a "responsible thing" to let a managing agent employ workers without a cap.

After he repeated his question six times, Ms Lim said: "I believe I acted responsibly in the circumstances."

Mr Singh wanted to know how she had done so, and Ms Lim replied that there was no way to fix the number of hires.

He responded: "Can it not be that any staff to be employed would be subject to the prior consent of AHTC? As a lawyer, do you not know of that formula?"

Ms Lim said she believed FMSS would act responsibly.

Mr Singh then gave the analogy of a hired gardener who might need extra hands: "Would you tell (him), 'I will give you one month, go hire as many as you like and I will pay, but don't have to check with me'?"

Ms Lim, after some back and forth, said no.

He then asked what was the difference between the gardener and FMSS.

Ms Lim said: "With the garden, there is no need to hire people earlier, (while) the managing agent contract is a big undertaking… It is reasonable for FMSS to ask to prepare for the takeover."

Mr Singh replied: "The difference is that the first example of the garden is your money. The second is not your money, it is other people's monies… which is why you so readily agreed to give FMSS carte blanche, (telling them) not to worry, the residents will pay for it."

Another area of the contract Mr Singh found fault with was FMSS charging AHTC $1.114 million in 2011 - the same amount CPG would have billed that year.

Ms Lim admitted that at the time she signed the contract, she did not know several details, including FMSS' price and staff structure.

Mr Singh wondered how she found it reasonable to pay "a newbie" the same fees as an experienced managing agent like CPG.

Ms Lim said she was "comforted by the fact" that the price of managing agent services would remain the same.

"You seem to be a bit casual about other people's money," Mr Singh said. "Because it was the residents' money, and not coming out of your pocket, it didn't matter to you to apply your mind to negotiate for a better deal."

Ms Lim disagreed.

He added: "You were content because it served your political purpose of getting rid of CPG and having your own people in… to use residents' monies to achieve these political purposes."

Ms Lim disagreed.

Mr Singh also questioned why, under the contract, FMSS had "taken over" former Hougang Town Council staff on June 15, 2011 - a whole month before the managing agent took the reins of the entire AHTC.

Mr Singh charged that Ms Lim and other WP MPs did so to "provide sanctuary" to these workers, who may be let go if they were in AHTC while CPG was in charge.

Laughing, Ms Lim said: "I don't think so."

Mr Singh added: "You very craftily… protected WP members and supporters using the hard-earned monies of the residents… It was plotted, it was calculated and it was implemented."

Ms Lim replied: "We planned for this contingency, but I don't agree with whatever derogatory term you used."





WP-run town council had time to call a tender for new managing agent, says lawyer
By Adrian Lim, Transport Correspondent, The Straits Times, 20 Oct 2018

The Workers' Party-run Aljunied-Hougang Town Council (AHTC) could have kept its incumbent managing agent for longer, and this would have given it up to four months to call a tender for a replacement in 2011, Senior Counsel Davinder Singh said yesterday.

There was "no need to get rid of" CPG Facilities Management after July 31, 2011, as it could have been retained by AHTC exercising its contractual rights, he added, in an ongoing hearing of a multimillion-dollar civil suit alleging improper payments.

But AHTC removed CPG because WP chairman Sylvia Lim had decided that a new agent would be appointed and an open tender waived, Mr Singh charged when cross-examining Ms Lim for the second day.

Mr Singh said there were even discussions for CPG to stay until Sept 30, 2011, to ensure that the handover was done properly.

As CPG had told the AHTC on May 30, 2011, that it was terminating its contract, retaining it until Sept 30 that year would have given the town council four months to call a tender, Mr Singh said yesterday, the 11th day of the lawsuit against eight people, including three WP MPs.

Ms Lim responded that the Town Council Management System (TCMS) - a software offered by CPG's computer vendor - was no longer available in September.

Keeping CPG on was possible legally and "in theory", she said, and the tender would have required two months. But the WP MPs' assessment was that they had to put in a "committed team" that would work for the residents, Ms Lim added.

Mr Singh retorted: "Don't blame the residents for your decision to not have a tender."



In 2013, Ms Lim had said in Parliament that an open tender was waived because a managing agent had to be put in place quickly for a handover. Yesterday, Mr Singh also established that on May 9, 2011 - just two days after winning Aljunied GRC in a general election - the WP MPs had already decided to appoint their own managing agent.

He said they should have considered then the need to call a tender.

He asked Ms Lim how she had "jumped" from considering calling a tender to waiving one.

Ms Lim said this was decided based on the assumption that CPG had been working with People's Action Party-run town councils, and since the way MPs managed their town councils would have some bearing on their electoral success, CPG would be committed to the PAP.

When Mr Singh asked Ms Lim again for an answer on not calling a tender, she replied: "It is a timing issue, and secondly, based on the experience of the past, we knew that very likely, we had better rely on ourselves and do risk mitigation."

Mr Singh asked: "Therefore, when you thought about a waiver, you thought about relying on yourselves?"

Ms Lim replied: "We had to plan."

Asked who the "we" referred to, Ms Lim said it was herself and WP's former chief Low Thia Khiang.

Mr Singh responded: "Which means that as of May 9, it would at least have been decided by the two top people of the party that you were going to appoint your own managing agent."

At yesterday's hearing, Mr Singh said repeatedly that Ms Lim was refusing to give a "yes" or "no" answer.

It led her lawyer, Senior Counsel Chelva Rajah, to point out that she was also entitled to say she was "unable to answer yes or no", and then proceed to explain.

At one point, Mr Singh told Ms Lim: "You can be an obstreperous witness if you like... but you still have to answer the questions."








AHTC Trial DAY 10: 18 Oct 2018

Workers' Party chairman Sylvia Lim lied to town councillors, Parliament, court, says Davinder Singh
WP chairman disagrees with lawyer's claim she misled them on why town council software had to be upscaled
By Seow Bei Yi, The Straits Times, 19 Oct 2018

Workers' Party (WP) chairman Sylvia Lim lied to her fellow town councillors, Parliament and the court by giving the false impression that the WP-led town council was forced to upscale a computer system because a software company terminated its contract, Senior Counsel Davinder Singh charged yesterday.

Mr Singh noted that according to Ms Lim, the termination by Action Information Management (AIM) led to an urgent need to upscale an existing management system used in Hougang to avoid a disruption of services to residents in Aljunied GRC, which the WP won in the 2011 General Election.

But he put it to her that it was a false impression that she "knowingly and deliberately perpetuated", which she disputed.


During his cross-examination, Mr Singh pointed to several documents to make the case that the Aljunied-Hougang Town Council (AHTC) had decided to upscale a software system even before learning on May 30, 2011, that AIM would discontinue its contract.

This included a May 13 letter signed off by Ms How Weng Fan, a majority owner of AHTC managing agent FM Solutions & Services, which mentioned information and documents needed by Hougang Town Council's computer vendor.

Mr Singh suggested that the reason the vendor required this information was to upscale Hougang's software so it could now serve the purposes of the enlarged AHTC.

"Before May 13 when this letter was sent out, it had already been decided that the Hougang Town Council computer vendor would be asked to upscale the computer system, right?" Mr Singh asked.

Ms Lim replied: "It could be on the 13th itself, but I agree it would have to happen before the letter was sent out."

She later said the town council had started "preparatory works" on upscaling the computer system in anticipation of AIM terminating its contract, based on past experience.



In another instance, Mr Singh noted that Ms Lim had said in her affidavit that she and Ms How were informed in early June 2011 that AIM would withdraw its town council management system.

But following questioning by Mr Singh, Ms Lim conceded that some work related to upscaling took place in May - before AHTC faced "imminent termination" of AIM's contract.

The WP chairman is one of eight defendants in a multimillion-dollar civil lawsuit brought by AHTC and the Pasir Ris-Punggol Town Council, which Mr Singh is representing.

Mr Singh also contended that far from causing AHTC to have to upscale its software, AIM had given the town council all the time it needed to transition to the new computer system.

He noted that AHTC had put up a request to continue with the AIM system until Aug 31, 2011, which AIM agreed to. The software company had earlier said on June 10 that it would be giving a one-month notice of termination, but did so only on June 22, he added. It subsequently extended its services to Aug 31, and later, at AHTC's request, to Sept 9.

Ms Lim replied that the first extension was in part for the benefit of AHTC's then managing agent CPG Facilities Management, which needed to use the system.

The Sept 9 extension was to facilitate CPG's audit work as well, she said, although she agreed that it was also for the benefit of the new management.

"You see, Ms Lim, far from AIM trying to undermine AHTC or the WP, it bent over backwards to accede to the requests that were sought... do you agree?" Mr Singh asked.

"Bent over backwards is a very loaded phrase," Ms Lim replied.

Mr Singh put to her that the company agreed to give AHTC the time that it needed, despite being under no obligation to do so.

Ms Lim replied: "They agreed to do that, yes."

Mr Singh also noted that AIM's representative Sasidharan Nair had been described as helpful and nice by Ms How.

Despite this, said Mr Singh, Ms Lim had "misled everyone" that the opposition-run town council had to upscale its computer system because AIM terminated its contract.

"You lied to your town council members, you lied to Parliament, you lied in this court in your defence... And even now, you don't have the honour to accept that what you did was wrong," he charged.

Ms Lim disagreed.












Workers' Party town council said to have given impression it would use own IT systems
By Adrian Lim, The Straits Times, 19 Oct 2018

In May 2011, Hougang Town Council secretary How Weng Fan sent e-mails to the incumbent managing agent of Aljunied Town Council, CPG Facilities Management, and the Housing Board was copied in the course of the correspondence.

These e-mails created the impression that Workers' Party (WP)-run Aljunied-Hougang Town Council (AHTC) would be using its own IT systems to run its operations, Senior Counsel Davinder Singh said yesterday.

Hence, it would not be unreasonable for computer vendor Action Information Management (AIM), which was servicing Aljunied Town Council, to start the process of terminating its contract with the town council, Mr Singh added.

He made the point, when cross-examining WP chairman Sylvia Lim, to show that AHTC had begun to upscale an existing IT system it had, even before it was told on May 30 by CPG that AIM would be pulling out.



The existing IT system was being used in the Hougang Town Council, and its expansion was to enable it to also serve the residents of Aljunied GRC, which the WP had won from the ruling party in the May 7, 2011, General Election.

So, the decision by AHTC to upscale the software was not based on anything which AIM had told the town council, Mr Singh said.

Ms Lim agreed, saying the decision was based on what had happened in the 1990s, when opposition-run town councils had to fend for themselves and develop their own IT systems.

This happened to former WP chief Low Thia Khiang when he won single-seat Hougang and ran its town council, she said.

Hence, when the WP won Aljunied GRC in 2011, "we came to the conclusion that we had better take some pre-emptive measures to safeguard our residents' interests", she added.

Mr Singh also said that the e-mails the WP MPs circulated among themselves in May 2011 did not show there was any concern over AIM terminating its contract with Aljunied Town Council.

He asked if there was any e-mail or correspondence which showed this.

Ms Lim replied that she recalled a meeting which the WP MPs had with HDB's town council secretary Chong Weng Yong on May 20, 2011.

Mr Chong had asked them if they had an IT system they could upscale, Ms Lim said.

Mr Chong later wrote to Ms How to provide her with the contact details of the AIM representative, she said.

Ms Lim added that Mr Chong copied the e-mail to the WP MPs because he knew of their concerns.

Mr Singh responded: "What concern? I asked you to find something, anything which recorded a concern. All I see instead is your objective to upscale (the computer system)."

The lawyer highlighted several May 2011 e-mails that were sent among Ms How, Aljunied Town Council general manager and CPG managing director Jeffrey Chua, and the HDB.

These were to arrange for meetings between the incumbent and new computer vendors as well as for the transfer of data and information, among other issues.

On the issue of how AIM might have reacted to the e-mails, Mr Singh asked: "If a contracted party gets the impression that the other party wants to go it alone, it would be reasonable for that unwanted contracted party to initiate the separation process?"

Ms Lim said that it depends, and later explained that the correspondence up to end-May was about the financial collection system only, and what AIM was providing - the Town Council Management System (TCMS) - was much more.

Ms Lim said the WP MPs decided it was not likely they would be able to use the TCMS, and that starting to upscale their IT software was a "contingency".








Sylvia Lim, Davinder Singh cross swords on software firm
The Straits Times, 19 Oct 2018

Workers' Party chairman Sylvia Lim and Senior Counsel Davinder Singh yesterday disagreed over whether Ms Lim lied that the Aljunied-Hougang Town Council (AHTC) began to upscale its computer system only after the People's Action Party-owned software firm Action Information Management (AIM) said it would terminate its contract. Here is an edited excerpt.

Davinder Singh: In your defence, you gave the impression that it was because AIM had terminated its contract that AHTC had to upscale its computer system. In your affidavit, you gave that same impression. In Parliament, you gave that very same impression. To your own town council members, you gave that impression as well. In all the instances I have shown you, you led the town council, the court, Parliament and the public to believe that it was because AIM had terminated (its contract) that AHTC had no choice but to upscale, and therefore was put in a difficult position as far as its collections were concerned, correct?

Sylvia Lim: Yes.

DS: And as we know from the documents, that was a false impression that was knowingly and deliberately perpetuated by you because you knew the facts.

SL: I disagree.

DS: The facts were that the upscaling was already decided before and AIM, far from causing the (need for) upscaling, was giving AHTC all the time it needed for the (software tests).

SL: I was there, and it was not as you put it.

DS: But you agreed earlier that the upscaling commenced in May.

SL: Preparatory works, yes.

DS: You agreed it was before the tip-off from Jeffrey Chua.

SL: Yes.

DS: You agreed with me that when you wanted until Aug 31, AIM gave you till Aug 31.

SL: Yes.

DS: You agreed with me that AIM had no contractual obligation to give you until Aug 31.

SL: I believe so.

DS: You also agreed that AIM went beyond its contract to assist the town council.

SL: Yes.

DS: Despite all of this, you misled everyone. You gave them the false impression, including in Parliament... that AIM terminated and therefore you had to upscale. You lied.

SL: I disagree.

DS: You lied to your town council members, to Parliament, in this court, in your defence.

SL: I disagree.

DS: And even now you don't have the honour to accept that what you did was wrong.

SL: I disagree, Mr Singh.










Unusual start to trial as Low Thia Khiang seeks to clarify why he felt 'distrust' over ex-managing agent
Low says he had doubts about CPG's agent on town council
Davinder questions whether ex-WP chief should be allowed to clarify previous answers
By Rachel Au-Yong, Political Correspondent, The Straits Times, 19 Oct 2018

Former Workers' Party (WP) chief Low Thia Khiang was so troubled by some answers he gave on Wednesday that the next day, he asked the court to let him clarify his testimony.

But Senior Counsel Davinder Singh objected, saying it was "inappropriate for a witness to volunteer" information when he was not called to do so.

The request was an unusual start to yesterday's session, the 10th day of a civil suit to recover alleged improper payments Mr Low and seven others made to their managing agent, FM Solutions & Services (FMSS), using Aljunied-Hougang Town Council (AHTC) funds.

The issue that troubled Mr Low was his answers on letting incumbent managing agent CPG Facilities Management sit in on a meeting on July 21, 2011.

On Wednesday, he had said repeatedly he was "uncomfortable" about CPG's presence and that there was a level of "distrust" but could not tell Mr Singh why he felt that way.

Mr Singh then charged that he and his fellow MPs did not want CPG to find out they were appointing a new managing agent because they wanted to avoid calling a tender.

Yesterday, Mr Low told the judge: "If I don't clarify, Your Honour might smell a rat with the suggestion from Mr Singh that I had something to hide (and that would be) a miscarriage of justice. I thought it was better to explain... what was ( behind) my hesitancy."

The reason he was not comfortable having one of the CPG representatives present at the meeting was due to his previous dealings with the man, he said.

Mr Singh countered that Mr Low had made up the evidence overnight.



For 20 minutes, Mr Singh and Mr Low's lawyer, Senior Counsel Chelva Rajah, argued whether the veteran MP should be allowed to take the stand.

Mr Singh said, among other things, that letting Mr Low speak in this "twilight zone", between the end of cross-examination and the start of re-examination, would give him "carte blanche… to add anything he wishes to add".

"There is no such provision in our rules and processes which allows the witness to dictate what he wishes to state," Mr Singh added, urging the court to take a "principled approach".

But Mr Rajah said Mr Low's request was not an unusual one, and the court normally takes what is a "sensible, proactive and fair" stand.

In the end, Justice Kannan Ramesh allowed the WP MP to make his clarifications.

Mr Low said he did not trust Mr Seng Joo How, the CPG representative appointed AHTC's deputy secretary on June 9, 2011, a few weeks before the July 21 meeting.

His bad experience with Mr Seng, now CPG's chief executive, dated back to 1991, when the latter was a Housing Board official dealing with town councils, Mr Low said.

At that time, Mr Low had just been elected MP for Hougang, and he encountered several obstacles that he believes were politically motivated, including the sudden termination of his town council's office at HDB premises.

Mr Seng was a "public servant who was supposed to help but didn't seem to do so", he said. "I can't expect… to feel comfortable discussing matters of importance to the town council."

He added: "I was hesitant yesterday because this goes into personal matters and it may not be fair to him because he is not here... But because of the inference Mr Singh made, it would be an injustice to us if I let this injustice (to Mr Seng) take priority."

Mr Singh charged that Mr Low made up the evidence, after realising people would wonder why he could not give an answer.

"You considered it would not just be damaging to you legally but politically, because you could not answer why something, which you claim is completely defensible, was suppressed," he said.

Mr Low disagreed, and said later that he did not share his concerns about Mr Seng with his fellow town councillors as he thought it was not fair for him "to question his integrity" over issues that took place more than 20 years ago.

Mr Seng was unanimously appointed AHTC's deputy secretary in June 2011, and when Mr Low was asked repeatedly if he supported the decision, he answered each time that he "did not object" instead of giving a yes or no answer.

Finally, Mr Singh asked: "You were a member of the town council, all of whom appointed Mr Seng as deputy secretary, correct?"

Mr Low said: "Yes."

Mr Singh responded: "So the evidence you dreamt up last night is not just false, but you came to this court this morning... determined to lie and mislead His Honour."

Mr Low said that was not true.









AHTC trial: Low Thia Khiang explains reason for distrust of CPG, Davinder Singh says he's lying to the court
By Lydia Lam, Channel NewsAsia, 18 Oct 2018

The 10th day of the Aljunied-Hougang Town Council (AHTC) trial opened with a series of sharp exchanges on Thursday (Oct 18), with Workers’ Party (WP) Member of Parliament (MP) Low Thia Khiang attempting to explain evidence he had given a day earlier to strong objection from lawyer Davinder Singh, who accused him of lying to the court and misleading the judge.

Mr Singh, who acts for Pasir Ris-Punggol Town Council (PRPTC), stated at the outset of the morning’s proceedings that he was done with his cross-examination of Mr Low. At this, Mr Low cut in and asked the judge if he could clarify an answer he had given on Wednesday.

Mr Singh objected strongly, saying that this was “not permissible” as any clarification should have been done during the cross-examination itself, and not at this point before re-examination by the defence lawyer Chelva Retnam Rajah.

Mr Rajah in his client’s defence asked Justice Kannan Ramesh to allow Mr Low to clarify what he had earlier said, as "it is in my experience invariably allowed".

Mr Singh referred to the Evidence Act, saying that "none of what Mr Low seeks to do is permitted" under those rules.

"Your honour, my learned friend's point that if Mr Low had made this statement (to clarify) hours after the cross-examination had ended, that would be a different thing," Mr Singh said. "Whereas here, according to him, Mr Low spoke five seconds after I said my cross-examination is complete. It is not the time that matters, it is the principle."

The judge agreed. However, he eventually allowed Mr Low to explain his earlier evidence "briefly", as he said "it's only in my interests to see the full picture".



Mr Low then addressed a point which Mr Singh on Wednesday had grilled him on - the reason for the feelings of distrust and discomfort which Mr Low had with regard to allowing incumbent managing agent CPG Facilities Management to sit in on a meeting on Jul 21, 2011.

Mr Singh had asked Mr Low why an email trail appeared to show that he and his fellow elected MPs moved the meeting back so that CPG employees would not attend it.

Pressed by Mr Singh to explain why they decided to defer the meeting, Mr Low repeatedly said that he was “uncomfortable” having certain discussions with a CPG representative in attendance, and that there was a level of “distrust”. However, when asked by Mr Singh at least 26 times to explain why he felt that "distrust", Mr Low had no direct answer.

On Thursday, however, Mr Low told the court that he went home and thought about it and decided to explain. Otherwise he said it could “undermine” his and his fellow defendants’ case.

Mr Low, along with fellow MPs Sylvia Lim and Pritam Singh and AHTC councillors Kenneth Foo and Chua Zhi Hon are being sued by AHTC and PRPTC for alleged breaches of fiduciary duty relating to the appointment of its former managing agent FM Solutions and Services (FMSS).

This, along with “flawed governance” of the town council and “improper” payments of more than S$33 million made mostly to FMSS, are the subject of two lawsuits that also are aimed at FMSS employees How Weng Fan and Danny Loh, who also held positions at AHTC. They are themselves being sued as well.

MR LOW'S DISTRUST WAS OF CPG CEO, FORMER HDB STAFF

Interrupted by Mr Singh at several points, Mr Low told the court that his distrust pertained to Mr Seng Joo How, the chief executive of CPG.

He explained that Mr Seng was one of "the key personnel who was managing Aljunied Town Council (ATC)". WP was to take over ATC after it won Aljunied GRC in the 2011 general election. It then merged ATC with Hougang Town Council (HTC), to form AHTC.

Mr Low claimed that his distrust of Mr Seng was based on his previous experience with him in 1991, when Mr Seng was "a public servant at the Housing Development Board (HDB)".

According to Mr Low, HDB allegedly "terminated" managing agent services provided to the town council and also terminated the tenancy agreement of the HTC office.

"I was certainly faced with that situation of no office, no one to manage HTC," said Mr Low. "At that point in time, when I was faced with that situation, I thought the only possible source of redress was to seek help from HDB, which has a town council secretariat. So I went to HDB and I asked them, and HDB (was) not prepared to build an office for me." Mr Singh then said that Mr Low was "going into the history" of what happened in 1991, when his question was about the circumstances in 2011.

"Please Mr Low, please mind your place," Mr Singh said.

The judge asked Mr Low to address directly what his discomfort was with CPG.

Mr Low agreed and answered: "Because of this experience I had with Mr Seng Joo How in 1991, being a public servant supposed to help but didn't seem to do so, I can't expect myself to feel comfortable sitting with him at the same table discussing matters important to the town council."

"The reason I was hesitant yesterday was ... because it went into personal matters. I think it may not be fair to (Mr Seng) as he was not here," Mr Low explained. "I thought if the plaintiff can call him here ... I think it will be easier, but my concern is that because it may affect Mr Seng, if the media may pick it up and spin it ... it may be injustice to him."

"But because of the inference Mr Singh made, I thought it may do injustice to us (the defendants), if I'm so concerned about the injustice to him (Mr Seng). I did not expect the cross-examination to end so fast," said Mr Low.

Taking his turn to question Mr Low on the evidence he had just given, Mr Singh said: "Mr Low, I suggest to you that you have made up this evidence."

"Not true," Mr Low replied.

"I suggest to you that overnight, and this morning, after reading the reports of yesterday's proceedings, you realised that you have to come up with some sort of a reason otherwise the public and the residents of AHTC would wonder why if there was nothing to hide, you didn't want to talk about FMSS and the letter of intent in the presence of CPG," said Mr Singh.

"This is not true. I have not read the -"

"That's my suggestion," Mr Singh cut in. "And you considered that it will not just be damaging to you legally but politically because you cannot answer why something that you claim is completely defensible was suppressed. Do you agree?"

"I disagree," Mr Low answered. "I have not read the press reports. Neither did I even read the transcript."

Mr Singh then brought Mr Low through the minutes of the first AHTC meeting on Jun 9, 2011.

He asked Mr Low if a town council meeting was held to discuss matters of importance to the town council and to the residents that may be confidential. Mr Low agreed to this. 

He then asked Mr Low if the appointment of a secretary and deputy secretary of a town council was a very important appointment, to which Mr Low again agreed.

"You would not appoint someone a secretary unless you considered him to be good, reliable and trustworthy?" Mr Singh asked.

"Yes," Mr Low replied.

"Likewise for deputy secretaries?"

"Yes."

Mr Singh then referred to minutes that showed that the town council approved the appointment of Jeffrey Chua as secretary and Seng Joo How as deputy secretary.

"As of June 2011, you considered Mr Seng Joo How to be good, reliable and trustworthy, correct?" Mr Singh asked.

"Not me," Mr Low replied.

"Was this decision to appoint Mr Jeffrey Chua and Mr Seng Joo How not a unanimous decision?" Mr Singh questioned.

"It is," Mr Low answered.

"You already told us that the appointment of a deputy secretary is (for) one whom you would consider is good, reliable and would trust," said Mr Singh. "Now, if you voted to appoint Mr Seng Joo How deputy secretary on Jun 9, 2011, would you agree with me that it follows from your own answer that you considered him good, reliable and trustworthy? Yes or no?"

"I did not share-" Mr Low began, but was cut off by Mr Singh. After a long back-and-forth where Mr Low did not answer yes or no, and instead said he did not object to the appointment of Mr Seng as deputy secretary, Mr Singh rephrased his question, saying he would continue until he got his answer.

"Having regard to your own belief that you act responsibly and honestly, having regard to your own belief that you had to appoint the best man to the job, having regard to your own belief that the deputy secretary had to be good, reliable and trustworthy, you were a member of the town council, all of whom appointed Mr Seng Joo How as deputy secretary, correct?" Mr Singh asked.

"Yes," Mr Low answered.

"So Mr Low," Mr Singh continued, "The evidence that you dreamt up last night is not just false, but you came to this court this morning ready and determined to lie and to mislead His Honour."

"That's not true, Mr Singh," Mr Low said.

"I have no further questions," Mr Singh said to the judge.

Lead lawyer for AHTC, David Chan, said he had no questions for Mr Low, and defence lawyer Chelva Retnam Rajah began his re-examination of Mr Low.

The trial continued with Ms Sylvia Lim taking the witness stand.





FMSS not 'locked in' as managing agent, says ex-WP chief Low Thia Khiang
By Seow Bei Yi and Adrian Lim, The Straits Times, 19 Oct 2018

Former Workers' Party (WP) chief Low Thia Khiang clarified yesterday that he had not agreed to a previous assertion by Senior Counsel Davinder Singh that FM Solutions & Services (FMSS) had been "locked in" as the managing agent of the opposition-run town council.

Instead, when he replied in the affirmative, it was to the first part of Mr Singh's question.

The question put to Mr Low was whether he had said that none of three experienced companies would have been prepared to provide managing agent services to the Aljunied-Hougang Town Council (AHTC), and that FMSS was "locked in" as AHTC's agent.

His clarification was made when he was re-examined by his own lawyer Chelva Rajah.

Senior Counsel Rajah had asked him what his answer was to the second part of Mr Singh's question - on whether FMSS was locked in.

Mr Low replied: "No."

Yesterday, Mr Rajah also sought to establish that a hypothetical scenario put to Mr Low by Mr Singh on Wednesday was not realistic.

Mr Singh had said that it seems Mr Low would have rejected a cheaper tenderer with more experience than FMSS and more qualified staff - if it did not fulfil one condition. And that condition is that it must hire the existing staff of WP-run Hougang Town Council, because Mr Low's overriding concern was their employment.

Mr Low had replied: "Yes."



Yesterday, Mr Rajah asked Mr Low if, in reality, he expected any of the established companies to put in such a tender.

Before Mr Low could answer, Mr Singh objected, saying that was a different question and not a clarification of Mr Low's earlier reply.

Justice Kannan Ramesh noted that the thrust of Mr Singh's question had been whether Mr Low's overarching consideration was the employment of the Hougang staff, suggesting the clarification was not relevant.

To this, Mr Rajah replied: "The relevance of my question is to show that the hypothetical is, in fact, a non-existent (one)."

Mr Singh interjected: "My question was not designed to ask him if that hypothetical is something that he accepts, (if it) is realistic or unrealistic; my question was to explore his state of mind and what was driving him at that time."

Mr Rajah replied: "The state of mind that is driving him is not one that is formed by the hypothetical, especially non-existent (ones)... it is formed by reality."

Justice Ramesh said the point had been raised in Mr Low's affidavit, bringing the matter to a close.





AHTC Trial DAY 9: 17 Oct 2018

Workers' Party's Low Thia Khiang had no intention to call for a tender, says Davinder Singh
Lawyer asks how matter could have escaped attention of experienced town councillor
By Rachel Au-Yong, Political Correspondent, The Straits Times, 18 Oct 2018

Several times yesterday, former Workers' Party (WP) chief Low Thia Khiang said the idea of calling a tender to appoint a new managing agent for Aljunied-Hougang Town Council (AHTC) did not cross his mind.

His cross-examiner, Senior Counsel Davinder Singh, pointed out that Mr Low had been chairman of a town council for 20 years, and said it could not have escaped his attention that a tender was needed.

He also asked why Mr Low did not get incumbent managing agent CPG Facilities Management to stay on while a tender was called.

Referring to Mr Low and the other WP MPs, Mr Singh said: "How can it be that all these MPs, including an experienced town councillor who has been a chairman for 20 years and three lawyers, didn't even raise this issue of the need to call for a tender, and for that purpose, to ask CPG to hang on until the tender is done?"

"But that is a fact," Mr Low replied.

"It is either that, Mr Low, or as I suggest to you, there was no intention to call a tender," Mr Singh said.

Mr Low responded: "It did not cross my mind whether a tender should be called under the circumstances... The thought just didn't arise in the mind."

The exchange unfolded on the ninth day of a multimillion-dollar civil suit to recover alleged improper payments made by AHTC. Mr Singh is representing Pasir Ris-Punggol Town Council in the case.



The Senior Counsel subsequently sought to establish that Mr Low and his fellow town councillors had planned for FM Solutions & Services (FMSS) to manage the town council from the start, as evidenced by notes that indicated new staff would "take over" from CPG on July 15.

According to the defence, CPG had told the town council of its desire to leave its contract only on May 30, 2011. But as there was a July 15 date marked for takeover, there was no time to carry out a tender.

Mr Singh said calling a tender "would have upset the plan".

Mr Low disputed this, and said the "contingency plan" for FMSS to serve as managing agent only kicked in when CPG asked to leave.

Mr Singh said: "The reason it would appear that it didn't occur to you (to call a tender) is because you were proceeding with FMSS, when it comes down to it."

FMSS was "the best possible option we could have", Mr Low said.

But Mr Singh pointed out: "It is not a question about there being no time to do a tender, it is not a question where you were being put in a situation where it would be a rush to call a tender... Your own fallback plan would be inconsistent with calling a tender."

Mr Low replied: "Yes, you can say that, but it has never been on my mind to call a tender in the first place."



Mr Singh then highlighted various e-mails to make the point that Mr Low knew that CPG's services could be extended beyond July 31 if needed - contrary to his defence that there was not enough time to call for a tender.

"According to your case, the time that AHTC would have needed to call for a tender is two months… So, there would have been enough time to do a tender, and even if time was a bit tight, you could have asked CPG to stay on," said Mr Singh.

Mr Low said: "In theory, yes."

Mr Singh responded: "What do you mean in theory? In your own defence you said two months (was needed)... you had the two-month period between June 1 and July 31. In fact, if you needed more time, you could have asked CPG to stay on for a little longer."

Towards the end of the six-hour hearing, Mr Singh drew Mr Low's attention to an e-mail he received from a WP member six days after his party won Aljunied GRC in May 2011. The WP member had advised Mr Low to prepare to call a tender for a new managing agent.

Mr Singh charged: "Therefore your entire evidence that you gave today about the tender having not crossed your mind and no one telling you about the tender is regrettably untrue."

Mr Low disagreed.

Mr Singh said: "In fact, it would appear from the documents that there was a concerted attempt to hide this plan so that you can avoid a tender, so that nothing can stop you from engaging FMSS."

"No, there was no such plan," Mr Low replied.





Disclosure of conflict issue not a big deal: Low Thia Khiang
He says he and Sylvia Lim intended to disclose it but may have missed issue as they were busy
By Seow Bei Yi, The Straits Times, 18 Oct 2018

Former Workers' Party (WP) chief Low Thia Khiang did not think it was a "big deal" when he and party chairman Sylvia Lim failed to disclose an apparent conflict of interest in the town council they were running.

This was revealed in the High Court yesterday, the second day Mr Low was on the stand in the ongoing multimillion-dollar civil lawsuit involving three WP MPs.

Questioning Mr Low about conflicts of interest, Senior Counsel Davinder Singh put to him that he had been aware of them as early as Aug 3, 2011, when then WP MP Yaw Shin Leong had copied Mr Low in an e-mail addressed to Ms Lim.

In it, Mr Yaw asked if there was a need to disclose that Mr Danny Loh - whose business, FM Solutions & Integrated Services, provided maintenance services for Hougang Town Council - was married to the town council's then secretary How Weng Fan.



The Hougang Town Council had previously awarded Mr Loh's firm an Essential Maintenance Services Unit contract. The couple were involved in setting up Aljunied-Hougang Town Council's (AHTC) new managing agent, FM Solutions & Services (FMSS).

Mr Low replied to the e-mail saying there was no harm mentioning it, while Ms Lim said they should enclose a document - showing the company's stakeholders - in the AHTC minutes. She added that she would arrange for it.

Mr Singh, who represents the Pasir Ris-Punggol Town Council which is suing Mr Low and Ms Lim, among others, pointed out that the disclosure was not made: "Did you ask Ms Lim why it wasn't done?"

Mr Low replied that he did not. When pressed to give a reason, he said: "Why should I? She is the chairman."

Mr Singh's retort: "You are a town councillor, and the vice-chairman."

Mr Low explained that he and Ms Lim may have missed the issue as they were busy at the time.

Mr Singh put to him that he could not have missed her e-mail response indicating her intent to do so, given that it was a day before the town councillors' meeting, and she replied two hours after he did.

To this, Mr Low said he did not know if he read her e-mail then, but added he did not ask her about it.

"It would appear that having decided initially it should be disclosed, a decision was made not to," Mr Singh said.

Mr Low replied that it would be best to ask Ms Lim, and questioned if it was "a big deal" to disclose it.

To which Mr Singh said: "It is not a big deal? Do you know we are in court today because of this?"

Mr Low clarified: "At that point of time, it wasn't a big deal."

Mr Singh asked: "Today, now that you know what the issues are, having heard everything, it is still not a big deal?"

On further questioning, Mr Low conceded it did appear to be a serious matter, given the court case had advanced to this stage.



Mr Singh pressed on: "The e-mails show that it was an important issue even then. Three minds were applied to the issue, and... a decision was made to suppress this from the town councillors."

Mr Low held his ground, maintaining that it was "absolutely not true".

The disclosure of Ms How's marriage to Mr Loh, who died in 2015, was one of several conflicts of interest that came under the spotlight yesterday. Earlier in the day, it was also revealed that Mr Low and Ms Lim did not think it was a big issue that Mr Loh and Ms How - both of whom were majority owners of AHTC's managing agent FMSS - were going to be employed by AHTC as well.

"Could you explain why in circumstances where your senior employees at AHTC, the most senior employees, were shareholders of FMSS... that did not give rise to a concern?" asked Mr Singh.

Mr Low replied that it was industry practice for it to happen that employees hold appointments on both sides - it was up to the town council to manage this conflict.

"It is a conflict which can be mitigated," he added.





ON THE DISCLOSURE NOT BEING MADE

Senior Counsel Davinder Singh: Did you ask Ms (Sylvia) Lim why it wasn't done?"

Former WP chief Low Thia Khiang: Why should I? She is the chairman.

Mr Singh: You are a town councillor, and the vice-chairman.

Mr Singh: It would appear that having decided initially it should be disclosed, a decision was made not to.

Mr Low: Why is it a big deal whether or not to disclose it?

Mr Singh: It is not a big deal? Do you know we are in court today because of this?

Mr Low: At that point of time, it wasn't a big deal.

Mr Singh: Today, now that you know what the issues are, having heard everything, it is still not a big deal?... The e-mails show that it was an important issue even then. Three minds were applied to the issue, and... a decision was made to suppress this from the town councillors.



ON AHTC STAFF HOLDING APPOINTMENTS ON BOTH SIDES

Mr Singh: Could you explain why in circumstances where your senior employees at AHTC, the most senior employees, were shareholders of FMSS... that did not give rise to a concern?

Mr Low: (replying that it was industry practice... and that it was up to the town council to manage this conflict) It is a conflict which can be mitigated.








Ex-WP chief Low Thia Khiang 'directed' new managing agent, FMSS even before official appointment, says lawyer
By Adrian Lim, The Straits Times, 18 Oct 2018

Former Workers' Party (WP) chief Low Thia Khiang had "directed" a new managing agent to bring Hougang Town Council's staff under its control even before it was officially appointed, lawyer Davinder Singh said yesterday.

The Senior Counsel also charged that Mr Low had already conceived a plan to fund the newly formed FM Solutions & Services (FMSS) using monies from the Aljunied-Hougang Town Council (AHTC).

But Mr Low said his May 2011 e-mail to Ms How Weng Fan, whose late husband Danny Loh started FMSS, was just stating the conditions FMSS would have to meet in the event the firm was appointed managing agent for AHTC.

Mr Singh repeatedly questioned Mr Low about where FMSS would find the money to hire the staff from Hougang Town Council.

Mr Low replied: "They will go and find the money. It is their company... I am sure they have their own plan."

Mr Singh said: "You were the one who told Ms How to set up the company, and told Ms How that FMSS should engage the Hougang (Town Council) staff... When you say their plan, it was all your plan... It was you who was driving the entire thing."

Mr Low said it was up to FMSS to find an investor and the money.



Mr Singh made the case that Mr Low and his fellow WP MPs had already decided to terminate the incumbent managing agent for Aljunied Town Council, CPG Facilities Management, before CPG told them on May 30, 2011, that it wanted out.

That was evident, he said, in an e-mail circulated among the WP MPs days before May 30. It said "the existing managing agent of Aljunied Town Council will report to us until we release them at such date, no later than Aug 1".

Mr Low said this was just an assumption the town councillors made, that CPG would ask to leave.

Nothing in the e-mail suggested any such assumption, said Mr Singh, who is representing Pasir Ris-Punggol Town Council in the civil lawsuit.

Mr Low said: "It is not here (in the e-mail), lah. It has always been on our minds."

Mr Singh responded: "I am sorry to say that you are not being honest."

Mr Low replied: "I am here looking you in the eye and telling you the truth."

Mr Singh said many people have looked him in the eye and told him things that were untrue.

"I declare I am honest," Mr Low responded.

After being pressed again by Mr Singh, Mr Low said: "I think you are right. It appears to be that we have decided. But the fact is that we haven't."



The High Court also heard yesterday that in FMSS' Letter of Intent sent to AHTC in June 2011, the firm said its scope of work would follow the specifications stipulated in CPG's contract with Aljunied Town Council.

Mr Singh said that Mr Low should have checked CPG's contract before deciding to sign on FMSS, as it was what a "responsible town councillor" would have done.

Mr Low agreed, and said he himself did not look at the contract, but he could not assume that others also did not, including then AHTC chairman Sylvia Lim.

Mr Singh also asked about why FMSS' managing agent fees were structured in a way to include a $1.1 million annual cost for employing all the existing staff of Hougang Town Council.

Mr Low said the negotiations had been left to Ms Lim, and he was not privy to the information.

Mr Singh responded to Mr Low, who was on the stand for the second day in a row: "And that might shorten your cross-examination."





Low Thia Khiang prioritised Hougang staff and WP supporters over residents, says lawyer Davinder Singh
Low Thia Khiang disputes his action was at the expense of his residents
By Rachel Au-Yong, Political Correspondent, The Straits Times, 18 Oct 2018

It was of "overriding importance" to former Workers' Party (WP) chief Low Thia Khiang that staff at his old constituency kept their jobs, even if another managing agent that was "cheaper and more experienced" threw in a bid.

By prioritising the job security of these Hougang Town Council staff - many of whom were WP supporters - Mr Low had "locked" Aljunied-Hougang Town Council (AHTC) into its managing agent FM Solutions & Services (FMSS), at the expense of his residents.

Senior Counsel Davinder Singh laid out this argument yesterday, which Mr Low disputed.

Mr Singh brought up the point Mr Low raised last week that town councils were political entities and that none of the three managing agent firms around in 2011 would have worked for AHTC.

Among other things, these companies were concerned that working for AHTC would affect their business with other People's Action Party-led wards, Mr Low said.

Thus, he felt he had no choice but to ask his supporters, Ms How Weng Fan and her husband Danny Loh, to set up FMSS.



But yesterday, Mr Singh argued that if FMSS was engaged and led by WP supporters, it would give these companies an "additional reason" not to bid for AHTC's contract in subsequent tenders.

Mr Low disagreed.

Mr Singh said: "Your whole thesis is that this is political, that some (companies) will only serve the PAP and so you had to start your own... (Did you therefore know that) having a tender after the first term would not result in any bids coming from these companies?"

Mr Low replied: "No, this is (on) a commercial basis. Anyone who thinks that it is a good (deal) would tender for it."

Mr Singh said: "You can't have it both ways… Now, AHTC has gone beyond just being a WP town; it has engaged a WP company to provide managing agent services. You would have known that calling a tender for the second year would have resulted in no bids except from the chosen one."

In appointing FMSS as managing agent from the get-go, Mr Singh added, Mr Low had "effectively put AHTC in a position where it was locked into FMSS, going forward".

He contended that AHTC lost its negotiating power when no other company, apart from FMSS, submitted bids for the managing agent tender it called in April 2012.

Mr Low disputed this: "If FMSS wanted something ridiculous, I would revert to direct management."

Mr Singh responded: "You were putting AHTC in a position... where FMSS had been given a gun they could put to AHTC's head."

Mr Low said: "They may have a gun but they don't have the trigger."



Mr Singh then said Mr Low's suggestion of reverting to direct management of AHTC was merely an assertion.

"Because of the path you chose, you put AHTC in a vulnerable position and therefore compromised the interests of the residents," he added.

Later, Mr Singh questioned why Mr Low had allowed FMSS - "a new kid on the block with no experience managing a town of this size" - to charge AHTC the same price that former managing agent CPG Facilities Management commanded.

Mr Low said FMSS was "the best possible option we had at the time".

Mr Singh also made the case that Mr Low and his fellow town councillors did not do what responsible town councillors would have done, in agreeing to FMSS' contract - which made reference to CPG's previous terms - without ever reading the original contract.

He said: "A responsible town council with responsible town councillors must ask themselves which part of that CPG contract is now applicable and which part is not applicable. It's very basic... and you didn't ask that question."

Mr Low said: "Yes, I didn't ask."

Mr Singh said: "As far as you know, none of the elected MPs asked that question. So it follows that none of you conducted yourself responsibly."

Mr Low replied: "Yes, specifically we didn't."









AHTC Trial DAY 8: 16 Oct 2018

Workers' Party Low Thia Khiang concedes he didn’t check existing managing agent, CPG's contract
That would have been the 'responsible' thing to do, he accepts in reply to lawyer's question
By Adrian Lim, Transport Correspondent, The Straits Times, 17 Oct 2018

If a managing agent wanted to terminate its contract with a town council, a "responsible town councillor" would check on its contractual obligations and not simply release the firm.

This was what former Workers' Party (WP) chief Low Thia Khiang failed to do in 2011, and he jumped at the chance to fulfil his plan to appoint a new company run by his supporters, Senior Counsel Davinder Singh said yesterday.



Mr Singh said Mr Low had put his "political supporters ahead of the residents' interests", and he did not check whether Aljunied-Hougang Town Council (AHTC) would be entitled to any damages when CPG Facilities Management terminated its contract.

"Was it the responsible thing to check if (CPG) was entitled to get out?" Mr Singh asked.

"That was not on my mind," replied Mr Low, who is one of eight parties being sued for an alleged breach of fiduciary duties in running the town council.

Said Mr Singh: "I'm asking you now. Was it the responsible thing to do?"

"Yes," Mr Low said.

"Thank you," Mr Singh said. "And you didn't do that, yes?"

"Yes," Mr Low acknowledged.



When Mr Singh suggested that the lack of checks gave Mr Low the opportunity to bring in FM Solutions & Services (FMSS) as the new managing agent, Mr Low disagreed and said that was Mr Singh's "own story".

Mr Low said that at the time, it was "uppermost" in his mind to protect the interest of his residents.

The eighth day of a multimillion-dollar lawsuit saw sharp exchanges as Mr Singh cross-examined Mr Low before a packed courtroom, with close to 50 people in the public gallery.

Tensions hit a high point during the three-hour session when Mr Singh repeatedly made the point that Mr Low had no intention of extending CPG's contract and wanted to keep his plans under wraps.

This, Mr Singh said, was evident in an e-mail circulated among the WP MPs about a journalist's query on whether AHTC would be taking over various contracts for Aljunied Town Council.

Mr Singh said Mr Low did not want to give an answer to the press, which would expose AHTC to any claims by CPG for terminating the contract.

Mr Low said there was no intention then to extend CPG's contract beyond what was in force.

But it was "mind-boggling", Mr Low said, to assume that the town council would want to have a claim filed against it by CPG. "I'm not that stupid, Mr Singh," Mr Low said.

Mr Singh replied: "You may want to contain your anger and focus on the question."



Yesterday, the lawyer also charged that Mr Low had misused public and residents' monies to fund a start-up - referring to FMSS.

This was because Mr Low wrote in his affidavit that having a new player in the township management market would be good for competition, and would be an attractive alternative option to other opposition candidates.

Mr Low disagreed, saying that he had asked for FMSS to be formed as a contingency measure if CPG pulled out. Having a new player in the market was just a consequence or a positive outcome, and not the intention, he added.

Mr Singh also said Mr Low was "reckless" by "merrily" allowing FMSS to charge the town council rates set by CPG.

He added that Mr Low ought to have considered the "dollars and cents" more carefully, because they did not belong to him.

Mr Low denied this, and said he was not aware of what cost structures CPG or FMSS had. "Whether they are going to make a profit or not, I don't know," he said.



Mr Singh also said that Mr Low had "misled" CPG into thinking that AHTC would be run in-house, to avoid calling a tender for a new managing agent.

This was seen in a May 13, 2011 letter which was sent by Hougang Town Council (HTC) to Aljunied Town Council, which Mr Singh said "was deliberately designed to give the CPG the impression that the elected MPs had decided to manage AHTC in-house as you did previously for HTC".

That was how "calculated" Mr Low's plans were, Mr Singh said.

"That's your own calculation, not mine," Mr Low replied.

Mr Singh later pointed out that Mr Low was approached by two other companies that expressed interest in providing managing agent services around May 2011.

He said these two companies were in the same position as FMSS, in terms of not having staff or experience managing a township of that size.

He added that Mr Low did not do his due diligence on the two companies, and had rejected them "because FMSS was a done deal and it was going to be FMSS regardless".

Mr Low replied that he needed to make an assessment before he spoke to the other MPs.

"What you did is you found a way to get rid of them so that nothing could threaten your plan to have FMSS in place," said Mr Singh.












Workers' Party decided to have new managing agent just days after GE 2011, says Davinder Singh
By Seow Bei Yi, The Straits Times, 17 Oct 2018

The Workers' Party (WP) plan to hire a new managing agent for its town council in 2011 was not devised as a contingency against the withdrawal of its existing agent, Senior Counsel Davinder Singh said yesterday.

Instead, the WP MPs had decided to appoint a new managing agent within three days of winning Aljunied GRC - even before the GRC's agent CPG Facilities Management had told them on May 30 that it wanted to pull out of its contract.

Mr Singh made the point when cross-examining former WP chief Low Thia Khiang on the eighth day of a multimillion-dollar civil lawsuit involving three WP MPs.

He said: "I suggest to you, Sir, that on the morning of the first working day after the election, you had sealed CPG's fate."

"You had decided to... appoint a company in which (then secretary of Hougang Town Council How Weng Fan) would be involved as the managing agent," Mr Singh added, referencing an e-mail that Mr Low sent to his party's newly-elected MPs.

This was despite CPG's experience and Mr Low not having read the terms of its contract, said Mr Singh, who argued that in doing so, the WP MPs compromised residents' interests.

Mr Low disagreed on every count, saying repeatedly: "That is not true."



The sequence of events from 2011 that emerged from the cross-examination was as follows:

• May 7: WP wins Aljunied GRC in the general election.

• May 9: WP MPs meet to discuss what Mr Low Thia Khiang says was a contingency plan should CPG pull out of running the town council. But Mr Davinder Singh suggests it was in preparation for the setting up of FMSS.

• May 12: Application made to register the FMSS company name.

• May 13: Ms How Weng Fan sends letter to CPG on taking over management of Aljunied Town Council. Mr Singh suggests it was clear Hougang Town Council will take over management of Aljunied GRC, but Mr Low says it refers to WP taking over the GRC from the PAP.

• May 30: CPG informs WP it wants to pull out of contract.

During the cross-examination, Mr Low, when asked if any of the "highly educated" members of his team referred to the plan as a contingency in their e-mail replies, said there was no such reply.

He added that on May 9, no decision had been made to replace CPG and appoint another agent.

Mr Singh said Ms How's husband Danny Loh had, on May 12, 2011, applied to the Accounting and Corporate Regulatory Authority to register FMSS' company name.

Logically, Mr Singh said, this meant Mr Low and Ms How had discussed setting up the company before that date. Yet, nothing was done to inform CPG there would be a new managing agent.

Mr Low replied there was no decision made at the time to replace CPG and, if the MPs had made such a decision, CPG would have to be told. He also said CPG had wanted out and asked for mutual release. When it was released, the town councillors appointed a new agent.

But Mr Singh noted that a letter which was sent by Ms How to CPG on May 13 - 17 days before CPG said it would pull out - gave a different impression.

Written with the letterhead of Hougang Town Council, she said "we" had been instructed by the MPs to arrange to take over the town council management.

Mr Low replied that this referred to the WP taking over from the People's Action Party (PAP).

Mr Singh said the letter was deliberately designed to give CPG the impression that the MPs had decided to manage AHTC in-house. It was a "calculated" move to avoid calling a tender and risking that another agent other than FMSS would get the job, he added.

Mr Low disagreed that this was the intent, saying it was a contingency, and later adding that it anticipated CPG's pullout.

Mr Low, WP chairman Sylvia Lim and current chief Pritam Singh are among eight defendants sued by Pasir Ris-Punggol Town Council (PRPTC) over alleged losses suffered when Punggol East was run by the opposition town council.

Mr Singh represents PRPTC, which in 2016 appointed audit firm PwC to review past payments made by Aljunied-Hougang Town Council (AHTC) relating to Punggol East, which the WP took charge of after a 2013 by-election. The PAP won it back in the 2015 polls.

The other defendants include AHTC's former managing agent FMSS and its main owners, Ms How and the late Mr Loh.

Earlier in the day, Mr Singh said residents would expect their town councillors to watch their money, act lawfully and manage the transition well, and not cut off an experienced firm without proper due diligence and consideration.

"But none of that mattered... You have come to this court to talk about politics, but instead what you were doing was putting politics above the residents," he added.









Testy showdown between Low Thia Khiang and Davinder Singh over language use
By Rachel Au-Yong, The Straits Times, 17 Oct 2018

From spelling out certain words to giving the definition of others, yesterday's trial saw Senior Counsel Davinder Singh and former Workers' Party chief Low Thia Khiang taking digs at each other in the course of a three-hour hearing.

The eighth day of the multi-million-dollar civil lawsuit opened with the question of whether Mr Low's command of English was strong enough that he could do without an interpreter.

Defence lawyer Chelva Rajah had asked for an interpreter, in case his Chinese-educated client felt that answering in Mandarin would better capture the nuances of his thoughts.

But Mr Singh, who is representing Pasir Ris-Punggol Town Council (PRPTC), objected to the request. He pointed to Mr Low's written testimony, and said it showed the MP "has a very strong command of the English language".

Mr Low is one of three Workers' Party MPs, and eight defendants in total, in the trial to recover alleged losses suffered by Aljunied-Hougang Town Council (AHTC) and PRPTC under his party's watch.



Mr Singh went on to charge that any translations would eat into the time he was given to cross-examine Mr Low. Not only that, "it would appear that Mr Low is seeking to reserve to himself more time to think about the questions, by having things translated to him before he gives his answers", he said.

Responding, Senior Counsel Rajah said there was "no need for that kind of rash and unfounded allegations", adding it was his suggestion that Mr Low have an interpreter.

Justice Kannan Ramesh said he expected Mr Low to give most of his answers in English, and should he need an interpreter, he would have to explain why. "Given the nature of the content of his (affidavit)... those instances should be fairly rare."

Mr Low did not require the services of his translator for yesterday's hearing, which unfolded into a testy showdown between the veteran politician and Mr Singh, a top litigator.

At one point, Mr Singh was questioning Mr Low about the software he would need to manage AHTC.

"But... if you were going to continue to use your in-house software for a larger constituency, it would need to be upgraded," said Mr Singh.

"Upscaled," Mr Low interjected.

Mr Singh retorted: "Thank you for correcting my English."

"Thank you, Mr Singh, for giving me a higher grade of English than Mr Lee Kuan Yew," replied Mr Low, to laughter from the packed gallery.

Mr Low did not specify what he was referring to, but in the 2006 General Election, the founding prime minister said Mr Low could not have written an apology letter by then WP candidate James Gomez because it was drafted in tight legal language and Mr Low's English was not good enough.

At another point during the cross-examination, Mr Singh spelt out the word "sources" letter by letter when Mr Low did not seem to understand his question about where a town council gets its money from.

Mr Singh also had to explain what "a herculean task" - a difficult job - meant, when he used the phrase in questioning.

Mr Singh also brought up grammatical tenses when he pointed to an e-mail Mr Low sent on May 9 2011, two days after the WP won Aljunied GRC. He noted Mr Low used the phrase "we will be appointing a (managing agent) instead of self-management". Aljunied Town Council was still being managed by CPG Facilities Management at that time.

Mr Singh sought to make the point that Mr Low and his fellow MPs had already decided to terminate the contract with CPG and appoint FM Solutions & Services in advance, which Mr Low disputed.

Mr Singh said: "Whether one is good at English or not... you wouldn't say something is to be done (if it was already the case) - it is done."

He referenced Mr Low's use of the phrase "we will appoint" to drive home his message.








AHTC Trial DAY 7: 15 Oct 2018

Defence lawyer says PwC report is prejudiced
PwC contests claim that report went beyond its remit and failed to consider certain issues
By Seow Bei Yi, The Straits Times, 16 Oct 2018

A report by audit firm PwC looking into past payments made by the Workers' Party (WP)-led town council was "prejudiced" and cannot be "regarded as an independent opinion of a fair-minded accountant", defence lawyer Leslie Netto has said.

In his cross-examination of PwC partner Goh Thien Phong, Mr Netto, who represents Aljunied-Hougang Town Council's (AHTC) former managing agent FM Solutions & Services (FMSS) and its majority owners How Weng Fan and her late husband Danny Loh, suggested that the 2017 PwC report went beyond its remit and contained generalisations.

Mr Goh contested them, saying his firm based its report on available evidence.

In drawing its conclusions, the report also failed to consider issues such as the nature of town councils and how this relates to politics, Mr Netto said yesterday, the seventh day of the multimillion-dollar civil lawsuit involving three WP MPs.



Mr Goh disagreed, saying his firm did consider the issues.

Among other matters, the PwC report said FMSS' fee structure appeared to have an element of "double charging", and that the 2011 appointment of FMSS as AHTC's managing agent for a year without tender may have had a bearing on the award of a subsequent contract when a tender was called.

PwC was appointed by Pasir Ris-Punggol Town Council to review past payments by AHTC in relation to Punggol East, after the People's Action Party took back the constituency in the 2015 election.

Asked why PwC went into the issue of higher fees and "unjustified payments" in its report when this was covered by KPMG in an earlier one on AHTC's books, Mr Goh said PwC's report had clearly referenced KPMG's findings.

Mr Netto then asked where in the KPMG report did it say the payments constituted double-counting. Mr Goh said PwC arrived at the conclusion based on its own judgment.

Mr Netto also put to him that the PwC report was speculative in claiming the initial appointment of FMSS gave the company an edge in the subsequent tender.

Mr Goh replied that other service providers had approached the town councillors but were rejected, and with the tender waived initially, people may have had the impression that it was not worthwhile putting in any tender.

"These are not borne out by facts because they did not submit the tender," Mr Netto countered.



The defence lawyer argued that PwC's report also should have, and had failed, to consider six other issues - hence, showing "prejudice".

First, it should have considered how more time is needed to call for tenders when an opposition party takes over a GRC.

Second, the former managing agent CPG Facilities Management was unwilling to continue serving under the WP, and it was not in the interest of residents for the WP to keep an unwilling agent.

Third, the withdrawal of Action Information Management left the town council in a serious predicament without its computer system.

Fourth, there are only three key players with experience running town councils - CPG, EM Services and Cushman & Wakefield.

Fifth, none of them made a bid for the town council and, finally, there was "sufficient oversight" of FMSS by the town councillors.

Responding to each point, Mr Goh said he considered them before forming his judgments.

While waiving a tender is justifiable when the situation is urgent and in the public's interest, the town council had two to three months to call the tender, he said.

He added that CPG had expressed its desire to be discharged but it was done after FMSS was promised a one-year contract, and it is the managing agent's duty to provide a computing system.



Mr Goh questioned how it could be known that no one was prepared to tender, when no tender was called initially.

He also said there was no need to seek the views of the defendants, including Ms How, as his report referred to KPMG's findings, and feedback she gave to KPMG would have been addressed in its report.

On whether considering Ms How's perspective would have changed things, Mr Goh said it would not. "That is because you are prejudiced," Mr Netto retorted.

The hearing resumes today, and former WP chief Low Thia Khiang will take the stand.






AHTC Trial DAY 6: 12 Oct 2018

AHTC trial: PAP town councils enjoy economies of scale, says defence
Lawyer noted that AHTC's managing agent cost more as WP ran just one town council
By Rachel Au-Yong, The Straits Times, 13 Oct 2018

Town council management fees in People's Action Party (PAP) wards were lower because they could enjoy economies of scale, said Senior Counsel Chelva Rajah.

But unlike the PAP, which had 15 town councils under its belt, the Workers' Party (WP) had only one: Aljunied-Hougang Town Council (AHTC).

For this reason, AHTC's managing agent, FM Solutions & Services, cost more than if the town council had stuck with CPG Facilities Management, Mr Rajah said yesterday.

He made the point when he was cross-examining PwC partner Goh Thien Phong, whose firm looked into the financial management of Punggol East by AHTC.

The town council had taken over the running of Punggol East constituency after the 2013 by-election, and was subsequently reconstituted as AHPETC.

But after the PAP took back the single-seat constituency at the 2015 General Election, the town council reverted to its old name.

The Pasir Ris-Punggol Town Council, which oversees Punggol East now, is suing eight defendants - including three WP MPs and two town councillors - over alleged losses suffered when the constituency was run by AHPETC.

Yesterday, the sixth day of a multimillion-dollar civil suit, Mr Rajah cited a May 2013 parliamentary statement made by Dr Teo Ho Pin, the coordinating MP for PAP town councils.

Mr Rajah noted that PAP town councils could call for joint tenders and reduce costs for residents.

Running an opposition town council does not have the advantages of these economies of scale, he suggested.

Mr Goh said AHTC could have chosen a managing agent that worked with the PAP town councils to enjoy similar rates.

Mr Rajah said simply: "For the lion to lie down with the lamb."



Earlier in his cross-examination, he took issue with PwC's finding that the town council racked up $400,000 in extra fees in calling a tender for a new conservancy and cleaning provider.

The incumbent provider, Titan Facilities Management, was chosen but, in the new contract, the cleaning rate per dwelling unit rose from $6.30 to $10.55.

But the auditor, in calculating the difference, had failed to take into account the number of parking spaces, Mr Rajah noted.

Mr Goh said none of the documents he had stated the correct number of units. Even factoring in Mr Rajah's estimated number of spaces, the new contract was still more expensive, he added.

To this, Mr Rajah said: "One of the less happy aspects of modern life is that the cost of living does not observe the laws of gravity."

Another area of disagreement was whether AHTC was justified in waiving the tender for a new managing agent.

Mr Goh said: "I don't see any reason why (AHTC) should get waivers because there was nothing urgent." He added that the town council had about two to three months to call for the tender.



Mr Rajah said that if Mr Goh "had approached this investigation with an open mind, you would have given far more attention to the plight in which the newly elected MPs of AHTC found themselves soon after the results of the 2011 General Election".

But Mr Goh countered that his audit did not "consider any emotional factor" as his role was to determine if Town Council Financial Rules had been breached.

One issue brought up repeatedly at the trial is whether AHTC should have agreed to CPG's request to terminate its contract before it was up.

Mr Rajah asked him if he was aware that CPG would not have been able to run the town council once the PAP-owned software company, Action Information Management, removed its computer system.

Mr Goh said: "That is CPG's problem. They may have to find another service provider for the computer system, but the fact remains they have a contract to fulfil."









Town council had reasons for choosing higher-priced contractors, says defence lawyer
Counsel, witness debate issue of contracts
By Adrian Lim, The Straits Times, 13 Oct 2018

In 2015, the town council run by the Workers' Party (WP) chose to include Punggol East in an existing contract it had with the firm Red-Power after the single-seat constituency's contract with another vendor expired.

Audit firm PwC later pointed out that the former Aljunied-Hougang-Punggol East Town Council (AHPETC) could have saved nearly $26,000 for a year if it selected Tong Lee Engineering Works to do booster pump, refuse chute and roller-shutter maintenance.

Yesterday, defence lawyer Chelva Rajah said Tong Lee verbally told AHPETC it did not have sufficient resources to take on Punggol East, and that this was reflected in a note by an AHPETC staff member which was attached to an e-mail.

The town council's tenders and contracts committee later decided to terminate Tong Lee's services because it was not up to standard, the Senior Counsel said on Day 6 of the multimillion-dollar civil lawsuit involving three WP MPs. In citing this example, Mr Rajah sought to illustrate that AHPETC had reasons for choosing higher-priced contractors when running the single-seat Punggol East constituency from 2013 to 2015.



But PwC partner Goh Thien Phong, whose firm looked into the financial management of Punggol East by AHPETC, said these justifications were not captured in the tender evaluation reports. His team was also not provided with supporting documents during its audit.

The Pasir Ris-Punggol Town Council (PRPTC) in 2016 appointed PwC to review past payments made by Aljunied-Hougang Town Council (AHTC) in relation to Punggol East, which the People's Action Party wrested back in the 2015 General Election.

PRPTC, which oversees Punggol East, is suing eight defendants - including three WP MPs and two town councillors - over alleged losses suffered when the constituency was run by AHPETC.

As to why AHPETC chose Rentokil over Pest-Pro for its pest control services, Mr Rajah said Rentokil was more familiar with the National Environment Agency's "Rat Attack" programme, and had a more qualified team. In its report, PwC had said that AHPETC could have saved $2,700 in a year by going with Pest-Pro.

These considerations, among others, were captured in the minutes of a meeting the town council had and were provided to a PwC staff member, said Mr Rajah, who is representing the WP MPs and town councillors.



Mr Goh said he accepted there was such an e-mail sent, but the employee in question had left the company.

Separately, Mr Rajah said that then chairman for AHPETC Sylvia Lim and the tender committee had also checked into whether contracts for two incumbent vendors could be extended, but Ms Lim was wrongly advised by her contracts manager that they could not be.

They checked not once, but twice, Mr Rajah said.

Mr Goh said an extension clause is common for most service contracts with town councils. "One will exercise more caution to look at the existing contracts," he said.

Another issue brought up yesterday was why PwC had suggested Punggol East was entitled to a share of any surpluses, even if any alleged improper payments took place before the ward fell under AHTC.

Mr Goh said that if AHTC had indeed depleted any reserves, what Punggol East would have received when it joined the town council would be affected.

Mr Rajah said that was a matter between Punggol East and the town council, and not the town councillors themselves.





AHTC Trial DAY 5: 11 Oct 2018

AHTC withheld $250,000 in fees to FMSS, says auditor
Move showed town council's concern over major accounting lapse by its managing agent
By Rachel Au-Yong, The Straits Times, 12 Oct 2018

The Workers' Party (WP)-led town council was so "obviously concerned" about a major accounting lapse by its managing agent that it withheld $250,000 in fees, a senior KPMG auditor said yesterday.

Managing agent FM Solutions & Services (FMSS) had processed $60 million in payments, mostly for utility bills, through manual journal entries, said KPMG executive director Owen Hawkes.

This highly irregular method, he noted, "effectively bypassed controls" which would have been in place if FMSS had gone through accounts payable instead, representing a "significant control weakness".

"When we discussed this with the (Aljunied-Hougang Town Council), they appeared to be obviously concerned... It was pretty clear at the time they were not happy," he said of the $250,000 in fees which AHTC withheld after KPMG highlighted the problem in its analysis of the books.



The audit firm was tasked to look into AHTC's books after a special audit by the Auditor-General's Office flagged several lapses.

Mr Hawkes was being cross-examined by Mr Leslie Netto, who is defending FMSS and its majority owners How Weng Fan and her late husband Danny Loh.

Yesterday, Mr Netto insisted that AHTC's town councillors, including WP MPs Low Thia Khiang and Sylvia Lim who are also defendants in the suit, were happy with the service provided by FMSS.

"I think we will have to listen to the MPs when they come on the stand. I think you will see they were happy," Mr Netto said on day five of a multimillion-dollar civil suit to recover alleged excess payments to FMSS.

He later said of the withheld fee that there was no such thing as a "perfect contract".

Mr Hawkes replied: "First, I wouldn't say that $250,000 is a minor amount of money. Second, it is the proposition that there was no unhappiness that I am challenging."



Mr Netto also sought to prove that FMSS had delivered on its obligations.

He said multiple reports - such as government-issued town council report cards - showed that under the management of FMSS, AHTC had consistently kept the estate clean and maintained its lifts well.

But Mr Hawkes said his focus was to review the town council's financial governance and controls, not estate cleanliness.

"Having been to Hougang many, many times, it is not my place to suggest it is some sort of Mad Max (dystopia)... It is a perfectly pleasant area of the country. But how the town council manages itself, rather than things like maintenance, is my area of concern," he said.

Mr Netto also took issue with KPMG's judgment of FMSS' accounting problems, noting that the firm had to struggle without a proper computerised management system. This happened after an IT firm, owned by former People's Action Party MPs, withdrew its software after both sides could not agree on terms following the 2011 General Election.

But Mr Hawkes said: "While I accept that implementing a new system is not an easy task, I don't think that five years later, the accounting system should still be in a problematic state."



In wrapping up his arguments, Mr Netto also sought to show that Ms How wanted to be helpful and give KPMG more information and documents for it to piece together its report.

He noted that she sent a letter to Mr Hawkes in October 2016, taking issue with KPMG's draft report on alleged improper payments, and asking for more than the four business days FMSS was given to respond. But she did not receive a response, he added.

When he was later cross-examined by AHTC lawyer David Chan, Mr Hawkes explained that his firm had contacted FMSS in advance, requesting interviews and access to certain documents. This request was not met.

But several discussions with Ms How, such as two that took place over the phone, were factored into the KPMG report, he added.









Defence and witness dispute financial procedures for town councils
WP lawyer, auditor debate financial procedures
By Adrian Lim, The Straits Times, 12 Oct 2018

Procedures were put in place by a Workers' Party (WP)-run town council to ensure there was oversight of payments made to vendors, contrary to allegations that there was a lack of financial control, defence lawyer Chelva Rajah said yesterday.

In the 56 instances in which auditors said there was no proper endorsement of invoices, Senior Counsel Rajah pointed to alternate documents called the Voucher Journal Report, which showed signatures of the appropriate heads of department.

But PwC partner Goh Thien Phong said this would still not fulfil the requirement under the law, and that a consistent policy was necessary, not according "to each individual's whims and fancies".

As spelt out in the Town Council Financial Rules, Mr Goh said the department head - in most cases, the property manager - needs to sign the invoices to satisfy himself that goods and services had been delivered and fees charged correctly, among various responsibilities.

The fifth day of a civil lawsuit involving three WP MPs and two councillors, over an alleged breach of their fiduciary duties, saw Mr Rajah and an auditor going back and forth over financial procedures in a town council.

PwC had been appointed in 2016 by the Pasir Ris-Punggol Town Council (PRPTC), which manages the affairs of single seat Punggol East, to look into the books of the WP-run town council.

PRPTC is suing eight defendants to recover any losses allegedly suffered when the constituency was managed from 2013 to 2015 by WP's Aljunied-Hougang-Punggol East Town Council (AHPETC).



Mr Goh said PwC took a sample of 200 invoices during its audit. Of these, 144 were correctly endorsed, while 56 were not signed by the head of department. There were no written standard operating procedures then, he added.

But according to Aljunied-Hougang Town Council general manager Vincent Koh - whose affidavit was read out by Mr Rajah in court - the town council used the Voucher Journal Report to comply with the law.

Mr Goh said he disagreed as the Voucher Journal Report held a different purpose, which was to be entered into accounting reports.



The PwC audit also found 12 invoices of improper payments - amounting to more than $171,110 - which were without supporting documents.

Six of these included payments that AHPETC made to contractor Propell Integrated in 2015 for the setting up of polling stations for the general election.

For these, Mr Rajah said the Housing Board and the elections office sent their officers down to inspect the works, and e-mails between AHPETC and HDB attest to this.

He also highlighted a claim which AHPETC submitted to HDB and which was reimbursed.

But Mr Goh, during cross-examination, disagreed, saying the e-mails between the parties were only instructions, and the town council paid the contractor without satisfying itself that the work had been done.

Mr Rajah asked: "The general election has come and gone and polling has taken place. That is not evidence that work has been done?"

Mr Goh maintained there was no actual evidence or photographs supporting AHPETC's payment to the contractor.

In other instances of payments where supporting documents were allegedly missing, Mr Rajah suggested this should not be the case as there was a handover between AHTC and PRPTC in late 2015. This was after the People's Action Party wrested the Punggol East seat back in the 2015 General Election.

An e-mail sent by PRPTC's general manager Kwok Wei Kin on Dec 9, 2015, to then AHTC deputy general manager Vincent Koh also thanked Mr Koh and his team for handing the documents over.

Mr Rajah pointed out that since PwC started its audit work on Nov 1, 2016, the documents should have been in PRPTC's possession.










AHTC Trial DAY 4: 10 Oct 2018

Workers' Party MPs kept 'watchful eye' over managing agent, says defence
FMSS not given free rein over payments: WP lawyer
By Rachel Au-Yong, Housing Correspondent, The Straits Times, 11 Oct 2018

Workers' Party (WP) town councillors followed a set of guidelines to keep a "watchful eye" on their managing agent.

They did not, argued their lawyer Chelva Rajah, give FM Solutions & Services (FMSS) free rein to approve payments to itself, even though the firm's owners How Weng Fan and Danny Loh held key managerial roles in Aljunied-Hougang Town Council (AHTC).

This alleged conflict of interest came under scrutiny yesterday, the fourth day of a multimillion-dollar civil suit to recover alleged excess payments made to FMSS. At issue was whether the WP had put in proper controls to manage the alleged conflict of interest.

The Senior Counsel argued that the WP town councillors did, and thus could not be deemed to have made improper payments.

For example, former WP chief Low Thia Khiang had put in place a "standard operating procedure" (SOP) in December 2011 detailing the different issues a town council might face, such as estate feedback or personnel matters, the relevant person these should be brought up to, and how they would be resolved.

But KPMG executive director Owen Hawkes, who was being cross-examined, said the SOP appeared to be little more than a communications proposal.

While issues pertaining to estate management appeared to be more detailed, Mr Hawkes argued that the SOP or what he called communications proposal for administrative or policy matters did not "seem to be very fully thought out".

"(Mr Low's SOP) is not really an SOP - it is just decisions made by the town council and communicated by the chairman for adoption," he said.

How these issues were handled, he added, was among his key concerns when his firm was tasked to look into AHTC's books after the Auditor-General's Office (AGO) found significant governance lapses in a special audit.



Mr Rajah also sought to establish, referencing various e-mails, that the WP town councillors had indeed checked all the expenses they were signing off on, and had not approved them blindly.

He pointed out, among other things, that then AHTC chairman Sylvia Lim had highlighted FMSS' proposal to spend $11 million on lift maintenance and repairs, noting that the town council "could not afford" to spend that amount yearly.

But, Mr Hawkes said, she was merely turning down items that were not applicable, adding that the correspondence took place in June 2015, after the AGO report was out.

"So, maybe there is more sensitivity to the issue at this point," he said.

Mr Rajah also took issue with KPMG's suggestion that AHTC resolves its conflict of interest issue by getting an independent member of the town council to approve payments at each stage.

This was not practical as it would require a lot of time, he added.

Mr Hawkes replied: "It would be additional work, I agree. But additional conflicts require additional controls... Otherwise, you are effectively having your cake and eating it."

Mr Rajah said the previous town council, which was led by the People's Action Party, handled conflicts in a similar way. At the same time, Ms How and Mr Loh were known to WP town councillors for many years, and they considered the couple reliable and trustworthy.

Mr Hawkes retorted: "Trust is not a control - it is the enemy of control."

In wrapping up his cross-examination, Mr Rajah noted that of the $33 million paid to FMSS and deemed to be in contention, $1.5 million was deemed by KPMG to be improper. Also, an extra $2.8 million was paid to architects who were the costlier choice over another.

But of this total sum of $4.3 million, just over $600,000 was labelled by KPMG as "ought to be recovered". The rest could not be determined.

Even then, Mr Rajah said his clients disagreed with how most of these judgments were made. The total sum that ought to be recovered would in fact be closer to under $30,000, he added.

Besides Mr Low and Ms Lim, the other defendants in the case are WP chief Pritam Singh, town councillors Kenneth Foo and Chua Zhi Hon, FMSS and its owners, Ms How and her late husband Mr Loh, who is being represented by his wife.

The case continues today.







Incumbent agent would have cost more, says defence
By Adrian Lim, Transport Correspondent, The Straits Times, 11 Oct 2018

An alternative calculation of how much an incumbent managing agent would have charged Aljunied-Hougang Town Council (AHTC) compared with hiring a new one was put forth by defence lawyer Leslie Netto yesterday.

Defending AHTC's choice of FM Solutions & Services (FMSS) over CPG Facilities Management in 2011, Mr Netto argued that CPG would have cost more as several items - including the provision of lift rescue services in the day and support for an IT system - were absent in earlier estimates.

If these had been factored in, CPG would have charged close to $5.6 million compared with FMSS' $5.4 million for a year, said Mr Netto, who is representing FMSS and its owners - the late Mr Danny Loh and his wife How Weng Fan.

They are among eight defendants in a multimillion-dollar civil lawsuit over alleged improper payments the Workers' Party-run AHTC made to FMSS and its service provider from 2011 to 2015. The suit was initiated by AHTC under the direction of an independent panel.



AHTC's lawyer David Chan said last week that two of the defendants had advanced the interests of their supporters over those of residents when appointing FMSS.

The duo are the Workers' Party's (WP) former chief Low Thia Khiang and its chairman Sylvia Lim.

Mr Chan said based on calculations that KPMG did in 2016, FMSS had cost AHTC an extra sum of more than $515,770.

Mr Netto refuted this yesterday when cross-examining KPMG executive director Owen Hawkes.

Mr Netto said items such as the annual cost of $451,200 for IT services for a town council management system and $17,820 for the provision of lift rescue services during office hours were left out in the calculation of CPG's fee.

These would have been provided by FMSS at no extra charge.

Mr Hawkes said that while the defendants were shown the calculations made in 2016, the items were not brought to the auditors' attention then.

Mr Netto noted that the FMSS contract also included taking over all the staff of WP-run Hougang Town Council in its merger with Aljunied Town Council. This cost $1.1 million for a year.

In comparison, KPMG calculated the additional costs of CPG taking over Hougang division at $687,660, based only on the number of units in the constituency, he said.

If CPG had taken over, it might have retrenched the Hougang Town Council staff - an outcome the WP MPs did not want to see happen, he said.

Mr Hawkes replied that while there was the possibility of job losses, which was "regrettable", KPMG's calculation was a cost calculation, not a social one.

Mr Netto also argued that signatures made by "conflicted persons" on payment vouchers - which auditors had taken issue with - were not approvals but endorsements to show the numbers were checked.

Any payment from AHTC to FMSS would have to be approved by Ms Lim, he said.





Counsel highlights views of Khaw and MND
By Rachel Au-Yong, Housing Correspondent, The Straits Times, 11 Oct 2018

The Ministry of National Development (MND) and its then minister Khaw Boon Wan "did not have any difficulty" in accepting the Workers' Party-led town council's decision in 2011 to waive the tender process for a new managing agent.

And yet, KPMG found that the WP had failed to justify the waiver of tender in appointing FM Solutions & Services (FMSS) to run Aljunied-Hougang Town Council (AHTC).

In pointing this out yesterday, Senior Counsel Chelva Rajah, who is defending five WP town councillors in a multimillion-dollar civil suit, questioned why the auditor had not considered the views of MND and Mr Khaw when compiling its October 2016 report.

KPMG was tasked to look into AHTC's books after the Auditor-General's Office found significant governance lapses in a special audit. KPMG's 2016 report said the contract AHTC signed with FMSS was done "improperly".



But Mr Rajah said AHTC was justified in awarding the managing agent contract to FMSS without calling a tender, as it did so to ensure an uninterrupted flow of services for its residents.

He cited then Minister for National Development Khaw Boon Wan, who at a parliamentary debate in May 2013 spoke about how the Town Council Financial Rules (TCFR) "provide latitude" to town councils to waive the requirement for a tender.

Mr Khaw, who noted that then-AHTC chairman Sylvia Lim had done so, said: "MND left the appointment to her best judgment and did not object. We have to apply the Town Councils Act and the TCFR fairly, evenly and consistently."

Presenting his argument, Mr Rajah said: "So, it would appear that as far as Mr Khaw was concerned, he didn't have too much difficulty with the fact that a waiver had been given as far as the first managing agent contract agreement was concerned."

"Do you accept that?" he asked KPMG executive director Owen Hawkes.

"You are correct," Mr Hawkes replied. "Well, it says that MND left the appointment to the 'best judgment'."

Mr Rajah also highlighted a 2013 report by MND which noted that the appointment of FMSS by AHTC "allowed AHTC to ensure continuity of service to residents", and that "there was no compromise of services".

He asked Mr Hawkes if he had bothered to check with how the MND arrived at its conclusions.

Mr Hawkes said there was no need to as KPMG's job was to look at the exact circumstances of the waiver and whether it was done in accordance with TCFR.



Mr Rajah then said: "Although you were aware of MND's view and of minister's view as expressed in his statement to Parliament, neither had any difficulty in accepting that waiver was properly called for and exercised, you saw it fit to nevertheless state in your report that the circumstances as recorded in contemporaneous documentation did not justify the waiver of tender."

Mr Hawkes said yes, and added he did not know if MND or Mr Khaw had reviewed documentation on the waiver then. "I don't think the phrase 'didn't bother' is appropriate. The fact is it was not appropriate to check," he said.





AHTC Trial DAY 3: 9 Oct 2018

Spotlight on 'improper payments' and whether they must be recovered
Most were not improper and even if they were, they were for services used, says WP lawyer
By Rachel Au-Yong, The Straits Times, 10 Oct 2018

The bulk of the $1.5 million in payments made by a Workers' Party-led town council to its managing agent were not improper, and should not be recovered even if they were because they were for services the town council used.

This argument was laid out yesterday by Senior Counsel Chelva Rajah, the lawyer defending five WP town councillors in a multimillion-dollar civil suit over an alleged breach of fiduciary duties.

On the second day of cross-examination, Mr Rajah pressed KPMG executive director Owen Hawkes on why he had classified almost $200,000 in payments to managing agent FM Solutions & Services (FMSS) and its related service provider, FM Solutions and Integrated Services (FMSI), as "unsupported by certifications of services received or contracts".

KPMG was appointed to look into Aljunied-Hougang Town Council's (AHTC) books after the Auditor-General's Office found significant governance lapses in a special audit.


Mr Rajah argued that some of these funds were paid out because FMSI had existing contracts with Hougang Town Council, which were naturally carried over to the new AHTC after the merger with Aljunied Town Council following the 2011 General Election.

Also, many of these payments were for services that had actually been rendered, such as those for emergency maintenance.

But Mr Hawkes said there was no documentation showing that these services were carried out satisfactorily. Neither was there any contract to define what "satisfactory service" would look like.

Mr Rajah said the town council's call logs were proof that cases were heard and responded to.

Mr Hawkes replied: "It is a call log, and I don't know what is your experience with call logs, but they are not 100 per cent with (seeing a case through)."

Later, Mr Rajah sought to determine if Mr Hawkes thought the payments should be recovered if services were provided satisfactorily.

Mr Hawkes said the documentation to prove that the services were carried out well was not there.

"I have never said this is a wrongful payment. The language is 'improper payment', made in breach of the Town Council Financial Rules... We don't say if it should be recovered or not recovered," he said.

Mr Rajah also took issue with KPMG classifying $80,000 in payments to FMSS as a breach of financial authority, as they were made without the co-signature of either the chairman or vice-chairman of the town council.

Mr Hawkes said those payments had breached standing instructions put in place by the town council to avoid a conflict of interest.

But after FMSS ceased to be the managing agent, there was no need for such co-signatures, said the town council.

Mr Hawkes said that while this did not violate town council financial rules, it went against the own standards AHTC had set for itself, and was thus improper.

Asked multiple times by Mr Rajah if he thought this money should be recovered, Mr Hawkes finally said: "It is not a yes or no.

"We are not saying that every amount in our table is to be recovered, that is why part of the table says (the amount is) indeterminable."

In total, KPMG identified more than $1.5 million in payments as improper in its October 2016 report. Just over $600,000, it said, should be recovered. It could not determine if the remaining amount ought to be recovered.



Yesterday's cross-examination was a continuation of Monday's, when Mr Rajah homed in on KPMG's argument that FMSS received more than $1.2 million in extra payments, via a 3.5 per cent management fee levied on projects totalling more than $34 million.

The auditor believed that many of the projects were basic services, to be covered by a lump-sum fee.

But Mr Rajah had argued that such practices were also carried out by the town council's PAP predecessor. Also, the works were clearly complex, given their bill size.

Another issue raised yesterday was about a potential conflict of interest, given that FMSS majority shareholders How Weng Fan and Danny Loh were also general manager and secretary of AHTC.

Mr Rajah sought to establish that the previous general manager, Mr Jeffrey Chua of CPG Facilities Management, was also a shareholder of Downer EDI Limited - the main shareholding company of CPG.

The case continues today.









Defence disputes claim that AHTC spent more by engaging new agent
Invoice of over $106,000 paid to FMSS not improper, says defence
By Adrian Lim, The Straits Times, 10 Oct 2018

The allegation that the Workers' Party-run Aljunied-Hougang Town Council (AHTC) spent more by engaging a new managing agent in 2011, instead of retaining its existing one, was challenged in the High Court yesterday.

Senior Counsel Chelva Rajah argued that the assumption behind this claim - made by KPMG auditors in 2016 - was that the incumbent agent of Aljunied Town Council, CPG Facilities Management, would be willing to take on the running of Hougang constituency as well.

CPG was not bound to do so, said Mr Rajah, who is defending three WP MPs and two town councillors in a multimillion-dollar lawsuit over an alleged breach of fiduciary duties.

The civil case centres on $33.7 million in payments that AHTC made from 2011 to 2015 to FM Solutions & Services (FMSS) and its service provider, which are alleged to be improper and void.

The appointment of FMSS in July 2011 came after the Workers' Party (WP) won Aljunied GRC in the May 2011 elections and planned to merge the running of the two town councils, with a single agent in charge.



A report published by KPMG in October 2016 noted that AHTC's appointment of FMSS, instead of keeping CPG, resulted in additional costs of over $515,700. This was for AHTC's first managing agent contract, which the town council had decided to waive a tender for.

But Mr Rajah said that CPG, which had been appointed by the People's Action Party-run Aljunied Town Council, would have been an "unwilling horse".

Mr Rajah said that based on CPG's contract with the town council, a variation of more than 10 per cent in fees would require both parties to reach a mutual agreement, for CPG to take in Hougang division.

Based on KPMG's estimations, CPG would have charged AHTC an additional $687,660 on top of the managing agent fee of $4,225,170, or 16 per cent more.

For this reason, it was not possible for WP chairman Sylvia Lim to instruct CPG to take on Hougang constituency, Mr Rajah said.

But KPMG executive director Owen Hawkes, who was being cross-examined by Mr Rajah, disagreed. Based on his understanding, Mr Hawkes said, CPG was contractually obliged to absorb Hougang Town Council if directed to, and AHTC could have retained it for a year while calling a tender for a new managing agent.



Earlier yesterday, Mr Rajah also argued that an invoice of more than $106,000 paid to FMSS was not improper.

Part of it went to reimburse salaries for Hougang Town Council staff for the first two weeks of June 2011, he disclosed.

The KPMG team had in 2016 pointed out that the letter of intent from FMSS said only that it would take over the salaries and appointment of Hougang Town Council's staff from June 15, 2011.

Mr Rajah's disclosure that FMSS was claiming for salaries for the entire month of June 2011 drew swift objections from Mr David Chan, who is representing AHTC, and Senior Counsel Davinder Singh, who is representing Pasir-Ris Punggol Town Council.

They said that this fact should have been included in the pleadings, with the related documents disclosed. Mr Singh asked who gave FMSS the authority to make the salary payments, adding that there was "a complete lack of control and systems of checks and balances". Justice Kannan Ramesh agreed that the new information should be put into the pleadings, and Mr Rajah said that he would amend them.









$2.8 million in extra payments to architect was justified, says WP lawyer
By Rachel Au-Yong and Adrian Lim, The Straits Times, 10 Oct 2018

Seven out of 10 times, Aljunied-Hougang Town Council (AHTC) picked the more expensive architect - LST Architects - for various works in the town council, costing it $2.8 million in extra payments.

But there was a justifiable reason for the decision, Senior Counsel Chelva Rajah suggested yesterday, the third day of a multimillion-dollar civil suit against five AHTC town councillors, including three Workers' Party MPs.

Mr Rajah argued that Design Metabolist (DM) - which KPMG said in its audit report was the cheaper option - had previously negotiated for a higher fee over the rate it agreed in principle with the town council.

In 2010, while Aljunied Town Council was under the purview of the People's Action Party, DM had doubled its fees for a Eunos Spring Neighbourhood Renewal Programme from the initially agreed amount.

The WP took charge of the town council after it won Aljunied GRC in the 2011 General Election.



Mr Rajah, in cross-examining KPMG executive director Owen Hawkes yesterday, also argued that it was not fair to arrive at the $2.8 million sum - which is part of the civil suits to recover allegedly excess payouts from eight defendants, including WP chairman Sylvia Lim and party leader Pritam Singh.

"It may well be that (DM) may not be prepared to take on the jobs unless they were paid a higher fee," said Mr Rajah.

Mr Hawkes replied: "It is possible, but you would have to ask them. The contract that we have does state a fixed fee."

The two men were locked in a back-and-forth exchange for a while before Justice Kannan Ramesh stepped in. He said, among other things, that the circumstances of the 2010 transaction - which resulted in a higher fee - are not known.

"That is something that needs to be asserted - you can't run it if it is not in your pleadings," Justice Ramesh added.

Earlier, Mr Rajah argued that while a town council was obliged under the Town Councils Financial Rules (TCFR) to always pick the cheaper option, it was allowed to choose a more expensive one if it could justify the decision.

LST Architects was deemed to be more efficient than DM, he said.

Through a tender, AHTC picked and placed both firms on a panel. AHTC could appoint either one for projects, without a separate tender process.

But Mr Hawkes said his firm held the view that it breached the TCFR. Mr Rajah said it was a common practice among many town councils, which Mr Hawkes accepted.





AHTC Trial DAY 2: 8 Oct 2018

Defence explains why Workers' Party decided to drop old town council managing agent
He argues that past actions showed PAP tried to make things difficult for opposition
By Rachel Au-Yong, Political Correspondent, The Straits Times, 9 Oct 2018

The Workers' Party (WP) terminated the contract of a managing agent appointed by the People's Action Party (PAP) early because the ruling party had a track record of making "things difficult for opposition town councils", Senior Counsel Chelva Rajah said yesterday.

The lawyer is representing three WP MPs, including former WP chief Low Thia Khiang and chairman Sylvia Lim, and two town councillors in a multimillion-dollar court case.

In the first half of the civil trial yesterday, he sought to explain why CPG Facilities Management was dropped shortly after the opposition party won Aljunied GRC in the 2011 General Election, even though it had two years left on its contract.

Citing Mr Low's affidavit, Mr Rajah said the former WP chief had faced several challenges when he became Hougang MP in 1991, such as having to secure a new office at short notice.

In the mid-1990s, the Housing Board also terminated its Essential Maintenance Service Unit contract and computer services for Hougang Town Council, and Mr Low had to find alternatives.

Coupled with the PAP-owned software company Action Information Management's termination of their contract shortly after his party won Aljunied GRC in 2011, Mr Low was determined to ensure that residents continue to enjoy a smooth flow of services.

"You know what they say about an unwilling horse. Don't ride it," Mr Rajah said in his cross-examination of auditor KPMG's executive director Owen Hawkes.

Mr Hawkes replied that unlike horses, corporate entities like CPG have legal obligations to fulfil.

His firm was appointed to look into Aljunied-Hougang Town Council's books after the Auditor-General's Office found significant governance lapses in a special audit.


In explaining why the WP had to hire a managing agent to handle the town council's affairs, Mr Rajah said directly managing a town council would take up much of an MP's time. This, he added, is "not only tiring and stressful but also harder for an MP to play a more active role in serving his residents through grassroots work".

But he also pointed out that none of the only three managing agents in the relatively niche field of township management - CPG, EM Services and Cushman & Wakefield - put in a bid to manage the WP town council in 2012. He said that all of them ran at least one PAP town council.

Mr Rajah asked Mr Hawkes if it was likely that these firms did not put in a tender for a town council because it was now run by an opposition party. Mr Hawkes said it was possible, but he noted that in his own capacity, he has worked for many firms which are competitors.

"Most firms typically do not begrudge that happening," he said.













$1.2 million in project fees was for ad hoc, large-scale projects and not 'improper' payments
Counsel for WP says payments under scrutiny also made by past town council
By Rachel Au-Yong and Adrian Lim, The Straits Times, 9 Oct 2018

The lawyer representing the Workers' Party (WP) yesterday sought to show that payments under scrutiny, made to a managing agent, had also been made by the town council which was previously run by the People's Action Party (PAP).

This was among the reasons Senior Counsel Chelva Rajah laid out yesterday and which he said led to the more than $1.2 million that Aljunied-Hougang Town Council (AHTC) made to its managing agent, FM Solutions & Services (FMSS), being classified wrongly as "improper".

He was cross-examining KPMG executive director Owen Hawkes in the second half of Day 2 of a multimillion-dollar civil suit over improper payments involving three WP MPs, including former chief Low Thia Khiang.

Mr Rajah is representing five WP town councillors, including the three MPs.

Mr Hawkes' firm was appointed to look into AHTC's books after the Auditor-General's Office (AGO) found significant governance lapses in a special audit.

At issue during yesterday's cross-examination was whether FMSS had received more than $1.2 million in extra payments, through the form of a 3.5 per cent management fee levied on projects totalling more than $34 million.

KPMG believed many of the projects, including the repair and redecoration of Housing Board flats, were basic services which should have been covered by a lump-sum fee.



But Mr Rajah questioned how Mr Hawkes arrived at this conclusion, because he admitted he had never gone down in person to evaluate the complexity of the projects, but relied on the wordings in the contracts.

More importantly, said Mr Rajah, the town council's predecessor, the PAP town council, was also charged similar fees for such works by its managing agent, CPG.

"Not only did the previous town council and managing agent, but also the successive council and managing agent - the four people who dealt with the project on the ground all considered (these) project management services. But you reviewing the project documentation thought otherwise?" he asked.

Mr Hawkes replied: "That is correct, and it wouldn't be the first case (where a client has disagreed with an accountant's definitions)... Our view was that this fell under basic services, at least in part."

At one point during the cross-examination, Mr Rajah also questioned if the auditors had come into the special audit with a pre-conceived view. He asked Mr Hawkes: "What is your approach: Guilty until proven innocent or innocent until proven guilty?"

Mr Hawkes replied that this was a civil case, and hence there was no issue of innocence or guilt.

Mr Rajah also sought to establish that AHTC was warranted in paying these fees, especially as some of the projects were complex enough to cost $8 million each.

Both men were locked in a back-and-forth over whether the total bill size was a fair indicator of the complexity of a project.

Mr Hawkes said the "mere scale" of the project was not sufficient, and that it depended on the "nature of what's being done".

Mr Rajah shot back: "So size means nothing?"

He also quizzed Mr Hawkes on another KPMG finding in its October 2016 report - that AHTC had overpaid FMSS $8,990 for overtime claims and Central Provident Fund contributions, for general overtime and inspections during the Chinese New Year.

KPMG had said these services should have been considered part of the standard management fees payable by the town council, but Mr Rajah argued that the inspections were required during the festive period so that waste could be cleared expeditiously.

He added that the town council was going through an "intensive and rigorous" audit by the AGO then, requiring staff to go "over and above" their duties.

Mr Hawkes countered that there was a distinction to be drawn as to whether FMSS' finance staff should be reimbursed for the extra hours by their employer, and whether FMSS is entitled to recover all the overtime from AHTC.

The question is the degree of the "extensive liaison" with the AGO, he added.

The civil trial continues today.







Payment to FMSS properly approved by WP chairman Sylvia Lim, says defence
By Adrian Lim, The Straits Times, 9 Oct 2018

A system was in place to ensure that the monthly payments Aljunied-Hougang Town Council (AHTC) made to its managing agent were signed off and approved by Workers' Party (WP) chairman Sylvia Lim.

The town council and its MPs regularly ascertained that its agent, FM Solutions & Services (FMSS), performed the contracted works properly, and Ms Lim herself verified the financial documents before endorsement, lawyer Leslie Netto said yesterday morning.

Starting off the second day of a multimillion-dollar court case involving three WP MPs and two town councillors, Mr Netto said there was no dishonesty on the part of FMSS' shareholders - Ms How Weng Fan and her husband, the late Danny Loh Chong Meng, also the town council's secretary and general manager, respectively.

The lawsuit, initiated by AHTC, under the direction of an independent panel, centres on $33.7 million in payments AHTC made from 2011 to 2015 to FMSS and service provider FM Solutions and Integrated Services (FMSI), which are alleged to be improper and void.

Ms Lim and then WP chief Low Thia Khiang have been asked to account for the money and to repay any sums paid out wrongfully.



Mr Netto, who is representing Ms How and FMSS, said allegations suggesting that AHTC paid a higher fee because it engaged new managing agent FMSS in July 2011, after winning Aljunied GRC in the May election, are "preposterous". Ms How is also representing her late husband.

Mr Netto said the previous vendor, CPG Facilities Management, outsourced the maintenance of the town council management system for close to $460,000 a year. FMSS did this without cost, he said.

He said Mr Loh and Ms How worked "tirelessly" and performed the difficult task of upscaling the IT system used by the WP-run Hougang Town Council so it could be used for the larger Aljunied GRC.

This was after CPG's contracted provider, Action Information Management (AIM), terminated its services to Aljunied Town Council, leaving AHTC "stripped" of its computer system.

Mr Netto said the auditors were "not in the shoes" of AHTC, and that a plain reading of the audit report suggests they were prepared by "bloodhounds", not "watchdogs". In the two lawsuits filed by AHTC and Pasir Ris-Punggol Town Council (PRPTC) against the defendants, "knives have been sharpened", with the defendants as "lambs".

Senior Counsel Davinder Singh, who is representing the PRPTC, said last Friday that the circumstances in which FMSS was appointed created a system whereby "controls were abdicated and checks and balances were thrown to the wind".







AHTC Trial DAY 1: 5 Oct 2018

Checks and balances at AHTC lacking and flawed, court told
Three WP leaders breached duties they owed town council, says senior counsel
By Selina Lum, Law Correspondent, The Straits Times, 6 Oct 2018

The system of checks and balances at the Aljunied-Hougang Town Council (AHTC) was "so lacking and flawed that it allowed conflicted persons to enrich themselves almost at will", said one of Singapore's top lawyers yesterday.

Senior Counsel Davinder Singh made the point at the start of two multimillion-dollar lawsuits against three opposition MPs who are leaders of the Workers' Party (WP).

Mr Singh, representing Pasir Ris-Punggol Town Council (PRPTC), charged that the trio, former WP chief Low Thia Khiang, party chairman Sylvia Lim and current party leader Pritam Singh, who are also elected town councillors, had breached the fiduciary and statutory duties they owed AHTC.

His opening statement in the high-profile case came after Mr David Chan, counsel for the AHTC, accused Mr Low and Ms Lim of advancing the interests of their longtime supporters over those of residents in the constituencies.

AHTC, under the direction of an independent panel, was the first to file the suit. Its claims against the three MPs and five other defendants include $33.7 million that was paid to AHTC's former managing agent FM Solutions and Services (FMSS) from July 15, 2011 to July 14, 2015.

Mr Low and Ms Lim have been asked to account for the money and to repay any sums that had been paid out wrongfully.

The other defendants are FMSS, its owners Danny Loh and his wife How Weng Fan, and two other town councillors: Mr Chua Zhi Hon and Mr Kenneth Foo.

FMSS was owned and run by Mr Loh, who died in 2015, and Ms How.

The couple, long-time supporters of WP, were also office-holders at AHTC: Mr Loh was secretary, while Ms How was deputy secretary and general manager.

Mr Chan, in his opening statement, said that shortly after Mr Low and Ms Lim's victory in the 2011 General Election in May, they asked the couple to set up FMSS to take over from existing managing agent CPG Facilities Management, even though CPG had at least two more years left on its contract.

Both MPs were aware the town council appointments placed the couple in a position of conflict, but they went ahead, Mr Chan said.

This created a system that, Mr Singh said, allowed the couple to approve payments to themselves, whereby "controls were abdicated and checks and balances were thrown to the wind".

Mr Singh accused the defendants of "misleading" residents, Parliament and the public by saying there was an urgent need to put in place a new managing agent because the incumbent had asked to be released from its contract.

Describing FMSS as just a "shell", Mr Singh said: "A company which had no track record in managing town councils of this size, a company which, apart from directors and a few management staff, had no staff at all, was given this contract on the quiet."

Mr Singh noted Ms Lim signed the letter of intent from FMSS on July 8, 2011, ahead of an Aug 4 meeting with the other town councillors.

"What was being done was effectively handcuffing AHTC and its residents to FMSS," said Mr Singh.

PRPTC, which manages the affairs of single-seat Punggol East, is suing to recover its share of losses allegedly suffered when the constituency was managed from 2013 to 2015 by WP's Aljunied-Hougang-Punggol East Town Council (AHPETC).

It came under PRPTC after the WP lost the constituency in the 2015 General Election. AHPETC was later reconstituted as AHTC.

Senior Counsel Chelva Rajah, who acts for the five town councillors, however, said they have not breached any of their duties and cannot be held liable.

He argued that his clients do not owe any fiduciary duties to AHTC.

Town councils were designed to operate with as much latitude as possible and it is for the electorate to bear the responsibility of their choice in electing the MPs who would represent them, he said.

Town councillors owe statutory duties set out in the Town Councils Act, he said, adding his clients had acted in accordance with the Act.

The civil trial, scheduled to be heard before Justice Kannan Ramesh till Nov 2, turns a new page in the long-running saga involving the financial mismanagement of AHTC. A special audit by the Auditor-General's Office - called after AHTC's auditors could not submit an unqualified set of accounts for years - identified 115 areas of non-compliance with regulations. A subsequent KPMG audit found another 71 lapses.

Yesterday, WP MPs Muhamad Faisal Abdul Manap and Png Eng Huat as well as the party's Non-Constituency MPs Daniel Goh, Leon Perera and Dennis Tan, attended the hearing, sitting in the packed public gallery.

The case continues on Monday.








AHTC trial: WP MPs created system where 'checks and balances were thrown to the wind' by appointing FMSS
Court looks at situation in which FMSS was appointed
Existing managing agent had two years left on contract but WP appointed new agent
By Adrian Lim, Transport Correspondent, The Straits Times, 6 Oct 2018

When Workers' Party (WP) chairman Sylvia Lim and then chief Low Thia Khiang were elected MPs for Aljunied GRC in 2011, the existing managing agent of the Aljunied Town Council - CPG Facilities Management - still had two more years left on its contract.

But Ms Lim and Mr Low decided to appoint a newly set-up company to manage town council affairs for both Aljunied GRC and Hougang SMC.

The new managing agent, FM Solutions & Services (FMSS), was started by the late Mr Danny Loh Chong Meng and his wife, Ms How Weng Fan, who then became secretary and general manager of the Aljunied-Hougang Town Council (AHTC) respectively.

The circumstances in which FMSS was appointed came under scrutiny on the first day of a multi-million-dollar case against three WP MPs - including current chief Pritam Singh - and two town councillors yesterday.

The case involves over $33.7 million paid by the town council from July 15, 2011 to July 14, 2015 to FMSS and service provider FM Solutions and Integrated Services (FMSI), which Mr Low and Ms Lim have been asked to account for and to repay any money paid out wrongfully.

The lawsuit, which has been initiated by Aljunied-Hougang Town Council (AHTC) under the direction of an independent panel, alleges that the payments to FMSS and FMSI were improper and void.

As the WP had also managed Punggol East from 2013 to 2015, after winning the constituency from the ruling party in a by-election, the Pasir Ris-Punggol Town Council (PRPTC) is also suing to recover Punggol East's share of losses arising from the alleged improper payments.



The court heard yesterday that the decision to appoint FMSS was made in the weeks following the May 7 General Election in 2011, as seen in e-mails between the parties, including Mr Low, Ms Lim and Ms How.

FMSS was then set up on May 15, 2011, and in June, a letter of intent was endorsed. Soon after, on Aug 1, FMSS took over the running of AHTC, the same day CPG's services were discharged.

AHTC's lawyer, Shook Lin & Bok's Mr David Chan, highlighted an e-mail sent by Ms How to Mr Jeffrey Chua, Aljunied Town Council's (ATC) general manager, on May 13, 2011, two days before FMSS was founded.

In it, Ms How, the secretary of Hougang Town Council - before it was merged with ATC - asked Mr Chua for details of ATC staff, so as to facilitate a smooth handover.

Mr Chan said it "was clear" that there were plans for Ms How and her new company to take over the ATC.

No tender was called to appoint FMSS. The PRPTC's lawyer, Senior Counsel Davinder Singh, said there was "more than ample time" to conduct a tender, and CPG could have been asked to stay on for a few more months.

But Senior Counsel Chelva Rajah, who is representing the WP MPs and town councillors, countered that there was "latitude" for a town council chairman, like Ms Lim, to waive the requirement to call a tender altogether.

He cited a speech by then National Development Minister Khaw Boon Wan, which was made in Parliament in May 2013, to back this.

Reading Mr Low's affidavit in court, Mr Rajah said the WP veteran faced challenges when he became Hougang MP in 1991, such as finding a new office at short notice.

In the mid-90s, the Housing Board also terminated its Essential Maintenance Service Unit contract and computer services for Hougang Town Council, leaving Mr Low to find replacements.

Based on this, the WP MPs were prepared that the current managing agent, CPG, which was contracted by the People's Action Party, would not want to continue serving the town council.

In fact, it was CPG's Mr Chua who told the AHTC during a meeting in May 2011, that it did not want to continue, said Mr Rajah.

"In the following days after this meeting, Mr Chua informed us that the reason for CPG not wishing to continue was that CPG also served as managing agent for Ang Mo Kio Town Council, which was helmed by the Prime Minister," Mr Rajah said, citing Ms Lim's affidavit.

"As such, it would be bad for CPG's business to be serving PAP town councils as well as a town council run by an opposition party," Mr Rajah continued.

In the case of the second managing agent contract given to FMSS in 2012, Mr Rajah said a tender had been called and only FMSS put in a bid.

Before awarding FMSS, Ms Lim had engaged Kelly Services, an HR company, to check if the salaries and job descriptions of FMSS staff were in line with market rates.

An audit firm, RSM Ethos, was also hired to examine the tender process and evaluation process.

The other defendants in the suit are town councillors Kenneth Foo Seck Guan and Chua Zhi Hon, FMSS and Ms How, who is also representing her late husband.








Engaging higher-priced architect led to AHTC paying $2.8 million more
By Selina Lum, Law Correspondent, The Straits Times, 6 Oct 2018

The Aljunied-Hougang Town Council (AHTC) had two architects on its panel but engaged the higher-priced firm for seven out of 10 construction projects.

This caused it to pay up to $2.8 million more than it would have had to if it had appointed the other, lower-priced architect.

The sum is among a number of "improper payments" that are at the centre of a court case involving three Workers' Party (WP) MPs and five other defendants, who are being sued for allegedly breaching their fiduciary duties to the town council.

With regard to the $2.8 million, compensation is being sought from all eight defendants, including former WP chief Low Thia Khiang, party chairman Sylvia Lim and current party leader Pritam Singh.

The money could have been saved if the seven projects had been awarded to lower-priced Design Metabolist instead of LST Architects, argued the plaintiffs AHTC and Pasir Ris-Punggol Town Council yesterday, on the first day of the trial over two multimillion-dollar civil lawsuits.



Senior Counsel Chelva Rajah, who is acting for the WP MPs and two other town councillors, said that for certain projects, the more expensive architect may be more suitable. "Horses for courses," he said, using an expression to mean that it is important to choose suitable people for particular activities because everyone has different skills.

AHTC's case is that separate tenders should have been called for certain projects.

Mr Rajah, however, argued that it was not improper to appoint a panel of consultants.

This was a practice of the People's Action Party-run Aljunied Town Council as well as other town councils under the management of the ruling party, he said.

"What is OK for Peter doesn't seem to be OK for Paul," he added.







Relationship was strictly business: Lawyer for FMSS
By Adrian Lim, The Straits Times, 6 Oct 2018

Ms How Weng Fan, and her husband, the late Mr Danny Loh Chong Meng, had no intentions of setting up FM Solutions & Services (FMSS) in May 2011, as they were then contemplating semi-retirement.

But Workers' Party (WP) chief Low Thia Khiang asked Ms How to reconsider, as he wanted a company to take over as managing agent for the Aljunied-Hougang Town Council (AHTC), if the incumbent vendor, CPG Facilities Management, was to withdraw.

This was to prevent any disruption of services to residents in Aljunied GRC, which Mr Low and his team had won in a landmark victory during the May 7 General Election.

This was the scenario painted by lawyer Leslie Netto, who is representing Ms How and FMSS, the defendants in a multi-million dollar lawsuit that also involves three WP MPs and two councillors.

Ms How is also representing her husband, the late Mr Loh.



The lawsuit, initiated by AHTC under the direction of an independent panel, centres on $33.7 million in payments AHTC made from 2011 to 2015 to FMSS and service provider FM Solutions and Integrated Services (FMSI).

Ms How and Mr Loh, both shareholders of FMSS, were appointed AHTC's general manager and secretary respectively.

Addressing accusations that there were conflicts of interest and that friends or supporters of WP MPs and town councillors had benefited, Mr Netto said that Ms How will testify that the relationship was a purely business one, and there were no kickbacks.

Mr Netto added that though there was no requirement under the Town Council Act in 2011 for Mr Loh and Ms How to disclose their interests in FMSS, they did so anyway.

Last year, the Town Council Act was amended to require disclosure from the town council secretary and the managing agent of any conflicts of interest.










AHTC trial: 'No room for doubt' that town councillors and officers of town councils are custodians of public monies
Senior counsel Davinder Singh throws doubt on motives behind change of agent
By Linette Lai, Health Correspondent and Adrian Lim, Transport Correspondent, The Straits Times, 6 Oct 2018

There is "simply no room for doubt" that town councillors and officers of town councils are custodians of residents' and public monies, said the lawyer for Pasir Ris-Punggol Town Council (PRPTC), Senior Counsel Davinder Singh.

In his opening statement at the start of a civil case against three Workers' Party (WP) MPs yesterday, Mr Singh said those public monies are "given to town councillors and officers not to benefit friends and supporters", but to carefully spend to benefit residents and the estate.

The three Aljunied GRC MPs - former WP chief Low Thia Khiang, party chairman Sylvia Lim and secretary-general Pritam Singh - are facing lawsuits from PRPTC and the Aljunied-Hougang Town Council (AHTC). Both lawsuits are linked to the $33.7 million paid to FM Solutions and Services (FMSS) and a related service provider between July 2011 and July 2015.

AHTC alleges these payments were improper and void, and that the WP MPs had acted in breach of their fiduciary duties. PRPTC is alleging the decisions taken by the town councillors had caused it to suffer "loss and damage", and is claiming equitable compensation.



In his opening statement, Mr Singh also drew attention to reports by global accounting firms KPMG and PwC, saying they "make it overwhelmingly clear" the instances of non-compliance, lapses and failures stem from a "complete and reckless disregard" of their duty to protect residents' and public monies.

The system of checks and balances in the town council was so lacking and flawed, he said, "that it allowed conflicted persons to enrich themselves almost at will".

"It is striking that despite the KPMG and PwC reports, there is no honourable acknowledgement of wrongdoing," Mr Singh said. Instead, the defendants had come "ready to use the witness stand as a soapbox to score political points".

Mr Singh also noted that "there was no urgency" for AHTC to replace its then managing agent CPG in 2011, as the contract still had two years to run. "There is nothing in any contemporaneous document" to show CPG would have disputed or challenged AHTC's right to compel CPG to fulfil its contract till expiry or a tender was called to appoint a new managing agent, Mr Singh said.

He added that Ms Lim and Mr Low had decided to bring in FMSS, and took steps to achieve that objective, "in complete disregard for the law and their duties".

"It was also not as if their motives were honourable. That reprehensible enterprise was undertaken to achieve collateral and improper purposes," he said.

Mr Singh pointed to a letter of intent with FMSS that Ms Lim signed in June 2011, which stated that FMSS' appointment would take effect from July 15, 2011.

"Under the cover of darkness, this letter of intent was sent (to FMSS) and accepted with no tender, no discussion... (with) town council members of the basis to waive the tender," he said.

This, he added, was "effectively handcuffing AHTC to FMSS". Town council members were told of FMSS' appointment only on Aug 4, 2011, by which time they had no choice.

"Once they signed the letter of intent... they have effectively lost all leverage... and given FMSS a gun to put to their head," he said.

Mr Singh also said that FMSS was given "carte blanche" to hire as many new staff members as they needed, in preparation for taking over AHTC, akin to being given a "blank cheque".















Town councils' suits against Workers' Party MPs Pritam Singh, Sylvia Lim and Low Thia Khiang start on 5 October 2018
By Rachel Au-Yong, Housing Correspondent, The Straits Times, 5 Oct 2018

The trial for the multi-million-dollar lawsuits against three Workers' Party town councillors will start on Friday.

Expected to run until Nov 2, it will see former WP chief Low Thia Khiang, chairman Sylvia Lim and current leader Pritam Singh take the stand.



The Aljunied GRC MPs are among those being sued by the Aljunied-Hougang Town Council (AHTC) under the direction of an independent panel. They also face a suit from the Pasir Ris-Punggol Town Council (PRPTC), which manages the affairs of Punggol East.

The other defendants in the lawsuit are AHTC's former managing agent FM Solutions and Services (FMSS), its owner How Weng Fan, and two other town councillors, Mr Chua Zhi Hon and Mr Kenneth Foo.

Both lawsuits are linked to the more than $33 million paid to FMSS and a related service provider between July 2011 and July 2015.

AHTC wants the town councillors to account for the sum and repay any money that was wrongfully paid out. PRPTC alleges that the decisions made by the town councillors had caused it to suffer "loss and damage", and is claiming equitable compensation.



In a statement last July, the three WP MPs rejected the claim that they acted in breach of their fiduciary duties, among other allegations. They also denied 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 of at least $1.25 million, Mr Low and Ms Lim said they have "not benefited a single cent".

Ms Lim and Mr Singh have also been asked to pay damages of $2.8 million for the wrongful appointment of architects.

"The WP MPs have acted in good faith and in the best interests of the town council and our residents," they said.

Observers are watching the suit closely for the legal and political implications the verdict might have.

In what some have called a "landmark case", the courts will have to rule on whether town councillors owe a fiduciary duty to their town councils because such a relationship between town councillors and town councils is not spelt out in the Town Councils Act.

And if the defendants are indeed found liable, the defendants would have to compensate AHTC.

If they cannot pay up, they risk being declared bankrupt and having their assets seized. MPs who are made bankrupt will lose their seats.



The trial is likely to see KPMG Forensics partner Owen Hawkes and PwC partner Goh Thien Phong take the stand first.

Both men belong to firms tasked to examine Aljunied-Hougang Town Council's accounts.

The WP MPs and town councillors will be represented by Tan Rajah & Cheah, with lawyer Chelva Retnam Rajah as lead counsel.

The independent AHTC panel is represented by a team from Shook Lin and Bok led by lawyer David Chan, while PRPTC is represented by Drew & Napier, and FMSS is represented by Netto & Magin.








AHTC lawsuits: About the case
The Straits Times, 19 Oct 2018

The Aljunied-Hougang Town Council (AHTC) is suing three Workers' Party (WP) MPs - party chairman Sylvia Lim, former chief Low Thia Khiang and secretary-general Pritam Singh - as well as two of its town councillors over $33.7 million in payments that AHTC made between July 15, 2011, and July 14, 2015.

The civil lawsuit, initiated by AHTC under the direction of an independent panel, alleges that the payments to its former managing agent were improper and void, as Mr Low and Ms Lim had acted in breach of their fiduciary duties.

The duo have been asked to account for the sum and to repay any money paid out wrongfully. Also named in that suit are town councillors Chua Zhi Hon and Kenneth Foo, the former managing agent FM Solutions & Services (FMSS), and the firm's owner, Ms How Weng Fan, who is also representing her late husband Danny Loh.

The Pasir Ris-Punggol Town Council (PRPTC) has also filed a suit against AHTC to recover any losses suffered by Punggol East from the alleged wrongful payments. The constituency came under AHTC after the WP won it in a 2013 by-election. The People's Action Party won Punggol East back in the 2015 General Election, and it became part of the PRPTC.

The case is the latest turn in an ongoing saga that goes back to 2011.



AHTC had been unable to submit an unqualified set of accounts since 2011, after the WP won Aljunied GRC in the 2011 General Election.

The state of affairs led to a special audit by the Auditor-General's Office (AGO), which found significant governance lapses at AHTC.

The AGO's findings were raised in Parliament, and the Court of Appeal directed AHTC to appoint a Big Four accounting firm to help it fix the lapses and ensure compliance with the law. AHTC appointed independent auditor KPMG in 2016 to look into its books.

KPMG found that the lapses at AHTC had put public funds running into millions of dollars at risk of improper use. AHTC appointed an independent panel to look into the improper payments and take action, including recovering the money.

The WP MPs and town councillors are represented by Tan Rajah & Cheah, with lawyer Chelva Retnam Rajah as lead counsel.

The independent AHTC panel is represented by a team from Shook Lin and Bok, led by lawyer David Chan.

PRPTC is represented by Drew & Napier, led by Senior Counsel Davinder Singh, while FMSS is represented by Netto & Magin.









Related
Workers' Party MPs sued by own Town Council AHTC over $33 million in improper payments; High Court trial in October 2018

AHTC Appoints Independent Panel to Review Findings of KPMG Past Payments Report dated 31 Oct 2016 and Safeguard AHTC’s Interests -17 Feb 2017

'Pervasive' lapses found in Workers' Party town council accounts; Some lapses may amount to criminal conduct: KPMG

Workers' Party town council lapses detailed in KPMG 1st report -15 Apr 2016

Workers' Party town council ordered by Court of Appeal to appoint one of the Big Four accounting firms to examine its books

Appeal court orders WP-run AHPETC to appoint accountants to fix lapses

Workers' Party town council managing agent FMSS has been "grossly profiteering" off AHPETC: MND

Gerald Giam on AHPETC bullshit: 'We say only the good stuff'

Auditors hired by AHPETC unable to verify its accounts for third straight year (FY2013-2014)

MND v AHPETC: Judge blasts WP-run council but rejects MND's oversight plea

Workers' Party Town Council "technically insolvent"

AHPETC: MND applies to court to appoint Independent Accountants to safeguard S&CC funds

AHPETC paid Managing Agent estimated S$1.6 million a year more than other TCs: MND

Parliament: Debate on AGO's audit report on AHPETC, Day 1

Parliament: Debate on AGO's audit report on AHPETC, Day 2

Shanmugam: AHPETC setup designed to let friends benefit

Pritam Singh to AHPETC residents: Ask me where is your money?




Sylvia Lim takes responsibility for friends with benefits in AHPETC

Chen Show Mao learns he's in a fiduciary relationship with AHPETC

Low Thia Khiang admits after 20 years, he still has no idea how to manage Town Councils

AGO Audit of Workers' Party-run town council FY2012-13 accounts flags major lapses

AHPETC does badly in S&CC arrears, corporate governance in Town Council FY2013 report

AHPETC auditors' disclaimer of opinion on financial statements for FY2012





AIM IT deal done to benefit town councils: Teo Ho Pin

PAP, WP in war of words over IT firm

AIM vs AHTC: Computer firm says town council's claim "inaccurate"

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