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AHTC Trial – What to look out for

by Remy Choo Zheng Xi

WP told by PAP appointed MA: It “would be bad for CPG’s business to be serving PAP TCs as well as a TC run by an opposition party”

The trial involving three elected members of the opposition Workers’ Party held Aljunied-Hougang Town Council (AHTC) began today. The stakes are high, and a potential judgment against the Members of Parliament could see them bankrupted and disqualified from holding public office.

The Law Suits, in Summary

There are two lawsuits.

  • Suit 668 is brought by AHTC, acting on the instructions of an Independent Panel appointed by order of the Court of Appeal.
  • Suit 716 is a lawsuit brought by Pasir Ris-Punggol Town Council (PRPTC).

In both Suits, it is alleged that the Defendants are liable for alleged improper payments made by the Managing Agents (MA) to third-party contractors between May 2011 – November 2015.

Factual Issue 1: MA Pullout at Short Notice – “bad for business” for MA to serve PAP TCs as well as opposition TCs

According to the Plaintiffs, the “original sin” of the WP MPs and Town Councillors appears to have been their decision to appoint a new Managing Agent, FMSS, to run AHTC after GE 2011. FM Solutions and Services (FMSS) was started by WP supporters, and the individuals behind FMSS had experience managing Hougang SMC for 14 years prior to 2011.

Prior to the WP winning in Aljunied, the PAP TC appointed MA was CPG Facilities Management (CPG).

From media reports, it appears that the Plaintiffs’ lawyers are attempting to portray the decision by the WP Town Councillors not to continue with CPG Facilities Management as an attempt to benefit and enrich FMSS at the expense of the TC. Much is being made of how FMSS was appointed as the AHTC’s MA in 2011, without tender.

The Opening Statement for the Defendants tells the other side of the story, and it will be interesting to see which one is borne out in the course of the trial.

According to the Defendants, “CPG informed the WP MPs towards the end of May 2011 that CPG did not wish to continue as MA as it “would be bad for CPG’s business to be serving PAP TCs as well as a TC run by an opposition party”.

If this is correct, this will show that the WP’s choice of FMSS to be their MAs was a decision borne of necessity. It would considerably defuse the suggestion that the WP Town Councillors hatched some nefarious plot to enrich their friends and supporters at the expense of residents.

The Defendant’s Opening Statement explains that the TC handover from PAP to WP had to take place by 1 August 2011, as mandated by the Ministry of National Development (MND). This effectively left the TC two months (from end May to 1 August) to get a new MA to replace CPG after CPG confirmed its intention to pull out of AHTC.

Because of the compressed timeframe, FMSS was appointed as the MA for AHTC for an interim period of one year. There was not enough time to call for an open tender, which may have taken months.

Notably, when a tender for the MA contract was called in the second year, only FMSS tendered for the contract.

Factual Issue 2: Pullout of Town Council Management System run by PAP-owned Company AIM

Apart from CPG’s pullout, the work of the TC appears to have suffered because of a pullout of the computerized Town Council Management System used to run ATC, according to the MPs’ Opening Statement.

The TCMS was the software provided by the PAP-owned company, Action Information Management (AIM), whose three directors were all former PAP MPs.

How much of the additional costs incurred in Town Council management could be attributable to the pull-out of AIM?

This will be an interesting factual issue to take note of as witnesses give evidence in the trial ahead.

I’ll try to write a separate note on the key legal issues over the weekend. For fuller reporting on the Plaintiffs’ Opening Statements, read:

Disclosure of interest: Sylvia works with my firm and I’ve previously represented AHTC in an arbitration against their Managing Agent, but this and any subsequent note I’ll write on the trial has been pieced together from publicly available Court documents.

For this note, I’ve relied on publicly available documents relating to the Suit, such as the Opening Statements by the Plaintiffs which were reported in the press and the Opening Statements of the Defendants which can be found here: