Independent panel for AHTC files legal action against town councillors over improper payment made by town council

According to Straits Times, the independent panel which was appointed to Aljunied-Hougang Town Council (AHTC) in consultation with Housing Development Board on Feb 2017, is taking several of the town councillor to court over a breach of fiduciary duties.

ST wrote that AHTC is claiming $622,593.78 in liquidated claims from multiple parties, as well as $4,167,501.71 in unliquidated claims. Additional sums may be involved. The writ of summons was filed last Friday by the town council in the High Court.

The six defendants listed in the case are Workers' Party (WP) Secretary-General Low Thia Khiang, the town council's chairman, Mr Pritam Singh, its vice-chairman, Ms Sylvia Lim, Mr Chua Zhi Hon, Mr Kenneth Foo, deputy organising secretary of the WP and Ms How Weng Fan, owner of the town council's former managing agent firm FM Solutions and Services (FMSS); and FMSS.

It is said that the legal action was initiated as part of the work of a panel tasked with looking into improper payments made by AHTC.

HDB had earlier instructed AHTC to appoint a suitable third party to recover improper payments after a KMPG report (dated Oct 31, 2016) detailed improper payments totalling around S$1.5 million, of which KPMG said at least S$600,000 ought to be recovered.

In a letter to AHTC dated 4 Nov, HDB said that it was "imperative that immediate steps be taken to recover the improper payments", including legal action where necessary. "As the improper payments may give rise to personal claims against existing town councillors, a suitable third party should have charge and conduct of these proceedings, on the town council's behalf,"

According to the terms of reference for the independent panel, it has the power to commence legal action on behalf of the town council for overpayments and payments without proper certification of work being done, among others.

The panel's other powers also include (and not limited to) the present ongoing arbitrations between AHTC and its former Managing Agent, FMSS.

The independent panel is chaired by senior counsel Philip Jeyaretnam, and comprises senior counsel N. Sreenivasan and KPMG managing partner Ong Pang Thye.

According to ST, another writ of summons was also filed by AHTC in the High Court against FMSS last Friday in relation to an arbitration case over a financial dispute emerging from the lapses at the town council.

When Ms Lim was asked for a response in regards to the claims filed by AHTC, she replied that they will respond further shortly, after they have studied the claim.

A pre-trial conference date of Aug 31 has been listed.