On Tuesday (5 November), Parliament debated a motion put forth by Deputy Prime Minister Heng Swee Keat for Worker’s Party (WP) MPs Sylvia Lim and Low Thia Khiang to recuse themselves from dealing with or having oversight over financial matters of the Aljunied-Huogang Town Council (AHTC) until the court case has ended.
In his long speech calling for the motion, Mr Heng referred to the High Court judgement which found Ms Lim, Mr Low, and WP chief Pritam Singh liable for damages suffered by AHTC, which it has said made improper payments under their watch amounting to millions.
As Mr Heng delivered his motion, he noted that Ms Lim and Mr Low had been “dishonest and deceptive and have failed in their duty to the Town Council”.
Ms Lim countered by seeking clarification from Mr Heng on his remarks that “millions have been lost”, to which he hesitated as he flipped through his folder before addressing Ms Lim’s other queries.
Ms Lim also raised a point that the judgement of the High Court “makes new law”. She said, “And if he looks at the summary from para 6 onwards that he handed out to the House just now, the Court actually goes into explaining why it is actually making a finding that fiduciary duties actually apply within the context of town councils which has never been the settled law?”
She continued, “The third clarification is he seemed to suggest that we had obstructed the AGO in its work. I hope he can clarify that because I do not think that the AGO actually said anything of that nature.
Fourth, he kept repeating that we had hidden documents from auditors which if produced would have revealed the truth. Can he explain what exactly is he talking about?
And finally, I think towards the end he mentioned that we had argued against the town council system. I do not know what he’s referring to so could he please clarify?”
To these, Mr Heng merely said that “the Court did not make new law. The Law has been there”, noting that the “High Court spent a lot of time looking at the question of what duties you owe, fiduciary duties that the town councillors owe to the town council.” He added that judgement was “very clear” on that point.
He went on to say, on the matter of the AGO: “The fact is there were many documents that were asked for but the town council did not provide but despite that, the AGO has important findings that merited action. So there were documents which we asked for which you did not provide.”
He also noted that on the issue of auditors to getting documents, he specifically pointed out an email that “revealed the truth on how FMSS was appointed”.
He said, “Do you not recall emails for which you had said that, you know, you had asked your Ms How to hide the truth on their appointment? And those are important documents.”
There was then a little back and forth between the ministers with the DPM saying, “I moved this motion because this is a question of integrity, this is a question of the way that we deal honestly in parliament with our residents, with the public, and with our fellow town councillors.”
Ms Lim then said, “DPM Heng Swee Keat’s filing of this motion at this point in time is telling but premature,” adding that “The PAP gov is clearly excited about certain findings and comments contained in the High Court judgement.”
She continued, “We have been studying the judgment with our lawyers since it was released and I can inform the House today that we have decided to appeal the judgment with the court of appeal.”
Senior Minister of State Edwin Tong then stood up to speak but was cut off as Mr Heng asked for an adjournment about 10-minutes into what would be an almost 3-hour long debate explaining that he would like to “consider the matter” raised by Ms Lim about how the motion should not have been raised in the first place.
Mr Pritam Singh countered that there was no need for an adjournment as the House had only just come back from a break. However, the speaker granted a 10-minute adjournment anyway.
After the break, Mr Heng clarified that the exact words he had used was that “millions of dollars in public funds are involved” not that “millions have been lost”. He then left Mr Tong to clarify the other points raised by Ms Lim and Mr Png.
Mr Tong first addressed the issue of documentations that the auditors requested but was not made available. He said, “They [The Auditors] sought documents in relation to transactions that were entered into after WP took over in the town council. They were not made available. In the following year in 2013, the same qualifiers were made.”
He then quoted from the Price Waterhouse Cooper report that said “no single email on matters in relation to the takeover of the MA and EMSU contract services by FMSS including the termination of CPG, the award of contracts to FMSS, and or FMSS performance of works was given to us for review. Though in our view, such emails ought to exist.”
Moving on to the issue of cheques being signed, Mr Tong said “It’s not about one signatory or two signatories. It’s about the entire system that you have set up as a result of what you have done by putting FMSS as your managing agent… The proper system has been subverted by the way in which you have done this.”
“Don’t penny pinch your dime with us,” slammed the senior minister for state.
Following that, Ms Lim acknowledge the poor record-keeping of AHTC but retorted that documents not being produced is “not the same as hiding.”
She also asserted that KPMG were not the TC’s auditors and that they were ”told not to duplicate the work of KPMG”.
To this Mr Tong said that KPMG also had difficulties in getting information and documents from AHTC. Citing two examples of this Mr Tong said, “KPMG examined the electronic devices of TC staff and FMSS employees, they found that documents and archives had been deleted”.
He also said that the town councillors “refused to cooperate” with KPMG when the auditors wanted to conduct oral interviews during the audit process.
“So when we say information and documents are missing and the auditors are unable to verify the information, that’s what we refer to. A litany of these excuses, documents are missing, can’t find the documents, or as you say not providing documents to an auditor when they ask for it is not the same thing as hiding it, then I don’t know what is,” he said.
Mr Png then stood up to clarify that AHTC did in fact cooperate with KPMG during the entire process.
“They actually did a deep dive, they did a lot of undeleting. And we actually explained everything. And in fact, we actually helped them to uncover some of the lost emails as well. So…we’re very transparent. We did not hide. In fact they show us the email and we actually explained why some of the hard copies were deleted, were recycled.”
The AHTC case
On 11 October, Judge Kannan Ramesh, in his written judgement, ruled that Lim and Low as town councillors had acted in breach of their fiduciary duties to AHTC, reasoning that the breach was evident in the waiver of tender leading to the award of the first managing agent contract to FM Solutions & Services (FMSS).
The waiver, said the judge, was “not justified under the Town Council Financial Rules (TCFR), and that subsequently, Lim and Low had “failed to act in AHTC’s best interests and had acted for extraneous purposes”.
“The evidence shows that there was a clear plan for FMSS to replace the incumbent MA CPG regardless of CPG’s intention as regards the existing MA contract, and that this decision was made by Ms Sylvia Lim and Mr Low Thia Khiang shortly after the 2011 General Elections,” said Justice Kannan.
“There was no urgency of circumstances that would have justified the waiver of tender, particularly since CPG was contractually obliged to continue serving as the MA under the existing MA contract, and the defendants should have held CPG to that contractual obligation, at least for such time as was necessary for a tender to be called,” he added.
As for Mr Singh, the judge said that while “it cannot be said that he has breached his fiduciary duties to AHTC” based on the available evidence, the former had breached his “duties of skill and care” to the Town Council in relation to the award of the first MA contract.