AHTC wilfully entrusted town council management to party supporters despite conflicts of interest

Nov 13, 2022 | 🚀 Fathership AI

The Court of Appeal (CA) on Wednesday (Nov 9) partially reversed the High Court's previous judgement concerning the appeals brought about by the Workers' Party (WP) leaders and related parties in the Aljunied-Hougang Town Council (AHTC) case.

MPs largely acted in good faith but were found to be "grossly negligent in implementing the payments process"

The WP leaders involved include current party chief Pritam Singh, as well as former WP chief Low Thia Khiang and party chairman Sylvia Lim.

There were previously found in a 2019 High Court judgment to have breached their fiduciary duties to the AHTC.

Singh was found to have breached his “duties of skill and care”, while Low and Lim were found in have breached their fiduciary duties to the AHTC in a 2019 High Court judgment.

However, the CA found that WP leaders were grossly negligent in the payments process to town council managing agent FM Solutions and Services (FMSS), helmed by longtime party supporter How Weng Fan and her deceased husband Danny Loh Chong Meng.

Cronies approved town council payments amounting to SGD 23M to their own companies

Loh and How set up FM Solutions and Services (FMSS) seven days after the WP won in Aljunied GRC in the 2011 General Election. They were appointed as Aljunied-Hougang-Punggol East Town Council (AHPETC) managing agent.

AHPETC was later reconstituted as AHTC in 2015.

Loh and How assumed key managerial and financial control roles in AHTC, as General Manager and Secretary respectively.

Both remained shareholders, directors and employees of FMSS.

Key contentions:

  • Sylvia Lim and AHTC town councillors and employees including Loh and How made payments of S$23 million to FMSS over a period of three years, from 2011 to 2014 despite knowing there was a conflict of interest as early as May 2011.
  • AHTC's town councillors acted without verification in checking if FMSS was performing the work it was contracted for before paying the entity.
  • Loh and How was part of the management committee that approved payments to their own company FMSS.

Ownself pay ownself

How and Loh were responsible for certifying work done, approving payments and/or signing cheques to FMSS.

Invoices from FMSS to the town council would be raised by How.

How or the town council's deputy general manager Yeo Soon Fei - who was also a minority shareholder of FMSS - would then certify the work done.

Approval of payment vouchers or cheques by the town council would be done in the same fashion by How. Most of the cheques to FMSS would then be signed by Loh on behalf of the town council.

Such a system was incapable of providing any independent check against the payments, and safeguards to public monies held by AHTC.

For this, they may be liable for damages.

The issue of damages for this negligence will be dealt with at a later stage.

Read the full judgment at https://www.elitigation.sg/gd/s/2022SGCA72

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