“The basic point is that while AHPETC lost money, FMSS and FMSI seem to have made money,”
Alleging that the Workers’ Party over-paid a managing agent run by its supporters, Law Minister K Shanmugam said in Parliament today (12 Feb) that the WP was giving residents’ money to its “friends”.
Mr Shanmugam centred on the fees which FM Solutions and Services (FMSS) charges AHPETC. He said the fees are higher than those paid by other town councils. From July 2013 to July 2014, FMSS charged S$7.43 for each residential unit and S$14.92 for each commercial unit, compared to S$4.80 to S$6.65 for units of each type, charged by other managing agents to their town councils, he said.
Mr Shanmugam calculated that the annual difference between what AHPETC paid FMSS and what other town councils pay is S$1.6 million, amounting to a $6.4 million difference over four years.
These higher fees, said Mr Shanmugam, were one way in which AHPETC “was run for the benefit of FMSS”. Another was the conflict of interest in how town council senior officers had ownership interest in FMSS.
He said, “The rhetoric from the WP is always about helping the poor man. The reality is that WP took money from the man in the street and gave it to FMSS, to their friends.”
Mr Shanmugam also accused the WP of losing the public’s money due to its “over-payment” to FMSS.
The overpayment should consitute a loss, but in addition, the lack of “any adequate check or control” could have resulted in other losses, said Mr Shanmugam.
Weighing in on the issue, National Development Minister Khaw Boon Wan said the AGO’s report showed that AHPETC has close to S$27 million worth of contracts with its two related parties, FMSS and FMSI, and of these, close to S$6 million was given without tender.
“AHPETC’s repeated failure to do so shows a disregard for its obligation to account to its residents; and also disregard for this Parliament of which the AHPETC’s Chairman, Vice-Chairmen and their fellow MPs have solemnly sworn to serve in,” said Mr Khaw.
The Auditor General’s findings confirm that something is “seriously wrong” at the Town Council, said Mr Khaw: “They paint a picture of financial mismanagement, incompetence and negligence in corporate governance.”
