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AHTC Trial: Workers’ Party Town Councillors Accused of Breaching “Core Fiduciary Duties”

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The high-profile Aljunied-Hougang Town Council civil trial kicked off today.

Speaking for the AHTC independent panel, lawyer David Chan from Shook Lin and Bok LLP accused 3 Workers’ Party MPs Pritam Singh, Sylvia Lim and Low Thia Khiang of breaching “core fiduciary duties” owed to residents and former constituents in their capacity as town councillors.

Mr Chan said that WP chairman Sylvia Lim and former WP chief Low Thia Khiang “deliberately embarked on a course of action” to arrange for FMSS to take over the “profit-centric role” of being the town council’s managing agent.

Mr Chan added that even though Ms Lim and Mr Low argued that they had set up sufficient safeguards and exercised sufficient oversight, their justifications were “not grounded in factual realities”.

“The evidence will demonstrate that the payment process was under the purview of conflicted persons all the way until the final step, where the cheque reached the chairman/vice-chairman for signature.”

AHTC contends that the appointment of FMSS 8 days after the 2011 General Election was “hurried” and “unjustified and unwarranted” as FMSS was appointed uncontested.

The town council’s then managing agent CPG Facilities Management was released from its contract that was supposed to end on 31 July 2013.

Mr Chan noted that the WP had said there was an urgency to appoint an agent which justified a waiver of tender, but he called this justification “baseless” since a report from AHTC auditor KPMG stated that “a more prudent approach would have been to call for a tender while keeping CPG in the interim”.

Following FMSS’ appointment, AHTC contends that Mr Low and Ms Lim also did “nothing meaningful” to address the appointment of the couple behind FMSS to key positions in the town council.

The couple are Danny Loh Chong Meng, AHTC’s secretary from Aug 2011 who died in a traffic accident in 2015, and his wife How Weng Fan who served as deputy secretary and general manager.

AHTC contends that the couple and another 6 defendents and claims that they rendered “dishonest assistance” to Low and Lim to rendered “dishonest assistance” to Ms Lim and Mr Low in getting them to waive the tender for FMSS.

Mr Chan said that taken together, these elements set up a faulty system of “control failures where meaningful oversight of FMSS could not be exercised” and that made it possible for FMSS and its officers to benefit themselves.

He noted that the Auditor-General Office and KPMG uncovered an aggregate 186 control failures in AHTC’s governance.

“Their actions were so reckless in their disregard of the interests of the residents of AHTC that it can only be viewed as breaches of (Ms Lim’s and Mr Low’s) core fiduciary duty of loyalty and fidelity and duty of good faith.”

Mr Low and Ms Lim maintain that they “have not benefited a single cent” from the appointment of FMSS.

WP secretary-general Pritam Singh, who was the chairman of AHTC’s Tenders and Contract Committee from June 2012, is standing trial to prove that the award of contracts to LST Architects without tender is justified, and thus is not liable for damages of S$2.8 million arising from the alleged wrongful appointment of the firm.

The AHTC independent panel claims that the committee needed to call a tender for any works estimated to cost more than S$70,000 under Town Council Financial Rules.

Mr Singh is also standing trial to prove that he owes no fiduciary duty to the town council.

This trial will determine whether Mr Singh, Mr Low and Ms Lim are liable to compensate the S$33.7 million that they are alleged to have wrongfully paid to FMSS between 2011 and 2015.

FMSS is standing trial for receiving improper payments made in breach of fiduciary duties, and dishonest assistance of breach of fiduciary duties.

Other defendants in the lawsuits include AHTC councillors Chua Zhi Hon and Kenneth Foo Seck Guan.

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