Earlier, TOC published an article revealing that Koufu's subsidiary, Hawker Management Pte Ltd, operating the new public funded Jurong West Hawker Centre, has awarded its cleaning and dishwashing contract to GreatSolutions, a company owned by one brother of Koufu's boss.
The contract let GreatSolutions earn close to $64,000 a month.
With netizens' anger mounting and more people talking about possible conflict of interests in Koufu's subsidiary awarding the cleaning contract, Straits Times (ST) decided to publish a news report yesterday (17 Oct) giving the government's side of the story.
ST went on to interview the National Environment Agency (NEA), the government agency in-charge of all the public funded hawker centres.
NEA: Nothing wrong
NEA said it requires the social enterprise operator of Jurong West Hawker Centre to ensure that there is "open and fair competition", as well as a "transparent, value-for-money" system, when procuring cleaning services for the centre.
It also observed that Koufu has been upfront about its relationship with GreatSolutions that Koufu's boss, Pang Lim, and GreatSolutions' boss, Pang Pok, are brothers.
NEA noted that Koufu IPO prospectu has already made it clear that GreatSolutions is an "interested person". In other words, there is nothing legally wrong about Koufu's boss giving contracts to his brothers' companies.
The document went on to state that Koufu will only enter into contracts for the provision of such services, or electrical services, by the mandated interested persons if it is "satisfied that the rates or prices from (them) are not higher than the most competitive quote provided by other third-party service providers for comparable services".
According to the prospectus, such contracts will only be entered after obtaining competing quotes from at least two unrelated third-party service providers, and taking into account other relevant factors.
In addition, Koufu also listed another company Brightlink Electrical as an interested party. It provides electrical services to Koufu's food and beverage outlets and is part-owned by another brother, Mr Pang Pong San.
Koufu's subsidiary also told ST, "All such transactions are subject to a rigorous review process and entered into on an arm's length basis."
Meanwhile, hawkers at Jurong West Hawker Centre are made to pay $0.20 on behalf of patrons for each tray returned by patrons under the agreeement with Koufu's subsidiary. This has resulted in further losses incurred by hawkers to the tune of several hundreds dollars more a month.
In an earlier statement, NEA which is headed by Brigadier General (NS) Tan Meng Dui, commented that the hawkers were "aware of charges" before signing the agreement with Koufu's subsidiary.