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MND’s legal proceeding against AHPETC to appoint independent auditors to town council

supreme court

Ministry of National Development (MND) has commenced legal proceeding against Aljunied-Hougang-Punggol East Town Council  (AHPETC) through the Attorney General Chambers (AGC) to seek to impose conditions onto grants disbursed to the town council and to have the court to appoint independent auditors to the town council.

In its originating summons, MND declared that it has a legal or equitable interest in the grants-in-aid disbursed or to be disbursed by MND to AHPETC or its predecessor, AHTC to ensure that to recover payment that are not properly authorised or lawfully made and to take appropriate action against any person action for AHPETC if there has been any breach of duty or unlawful conduct.

The proposed independent auditors by MND will co-authorise and co-sign all payments in excess of S$20,000 from segregated bank accounts established by AHPETC and grants payable for financial years 2014/15 and 2015/16 from MND and to oversee the payments to ensure all proposed payments out of the special accounts are correctly made and properly authorised.

Apart from the above, the independent auditors will also identify whether the payments made by AHPETC have been correctly made. With the leave of court, the independent auditors will demand and collect for the recovery of town council money which are incorrectly paid out and also take appropriate actions in the event if breach(es) of duties or unlawful conduct by individuals are found.

AHPETC chairman Sylvia Lim earlier said to media, "As the case is now before the courts, I do not think it is appropriate for me to make any comments … We will be mounting a vigorous defence and doing this in the interest of the residents. We believe this court case is wholly unnecessary," .

In the hearing, AGC repeated the findings on the APHETC's financial report produced by the Attorney General Officer (AGO) in February 2015. AGC pointed out that while AGO did not highlight any fault, the AGO's report was not meant to find contraventions or wrong doing in the town council's financial processes and items set out in the originating summons filed by MND are sought to do that.

Towards assertion by AHPETC that this legal proceeding is one of a political nature, AGC stated that the proceeding by MND is not of a political dispute as all town councils are required to fulfill their statutory obligations through the town council act and not a matter between People's Action Party and Worker's Party.

During the hearing, the presiding judge, Justice Quentin Loh asked AGC if there was any preceding case where the court appoints an independent auditor into a company to oversee the operations of the company.

In response to the judge's question, AGC presented a case where the court appointed independent auditors to a company which had been proven to have issues in the business, to ensure that the operations are proper.

The judge also asked if the appointment of the independent auditors to the town council would mean that the auditors would be able to gain access to information from third party, such as FM Solution and Services (FMSS) and FM Solutions and Integrated Services (FMSI) through the court. The AGC said yes.

The hearing will continue in the afternoon and carry on to Tuesday at the Supreme Court. Members of public can attend the public hearing.