SINGAPORE – Aljunied-Hougang Town Council (AHTC) said on Tuesday that it sees no reason to bar two senior Workers’ Party (WP) leaders from discharging their functions and duties as elected AHTC town councillors.
In a letter to the Ministry of National Development (MND), AHTC said WP chairman Sylvia Lim has not been directly involved in its procurement and payment processes since 2020, while WP chief Pritam Singh sits on two town council committees dealing with tenders and contracts.
AHTC was responding to an Aug 22 letter from MND that sought information on Ms Lim and Mr Singh’s specific powers and duties over the town council’s payment and procurement processes, and what action AHTC intended to take, given the Court of Appeal’s findings in July over the long-running AHTC civil suit.
MND had given AHTC two weeks to reply. The ministry had also cancelled an order that restricted Ms Lim and former WP chief Low Thia Khiang’s powers over AHTC’s financial decisions following the Court of Appeal’s judgment that the town councillors did not owe fiduciary duties to AHTC.
But the ministry said it may consider further regulatory action to safeguard public monies, depending on AHTC’s response.
In his letter to MND on Tuesday, AHTC chairman Dennis Tan said members in all its committees make decisions collectively.
Each member has one vote, and in the event of a tied vote, the committee’s chairman has a casting vote. Hence, there is no risk of any person unilaterally making decisions or granting approvals, he said.
AHTC’s tenders and contracts committee, which Mr Singh sits on, relies on a price quality method evaluation framework in its approval process that was recommended by appointed external consultants, Mr Tan added.
Members on this committee are required to declare any conflicts of interest for tender evaluations, and to recuse themselves from decision-making if there is any potential conflict of interest. This will be documented in the minutes of meetings, he added.
Both Ms Lim and Mr Singh are members of the estate and community liaison committee that “evaluates requests for approval for estate projects and cyclical maintenance purchases within a budgetary framework”, said AHTC.
Ms Lim also sits on AHTC’s audit committee, which oversees statutory audit findings and its governance framework, and has no role in its procurement and payment process.
In July, the Court of Appeal ruled that Ms Lim and Mr Low were negligent in certain areas, including AHTC’s payments process, and may still be liable for damages.
The court found that Ms Lim was responsible for a contract to electrical engineering firm Red-Power at rates that were four to seven times higher than those offered by AHTC’s then existing vendors Digo Corp and Terminal 9.
While Mr Singh was found not liable for negligence in AHTC’s payments process, the apex court said the WP chief, Ms Lim, Mr Low and other town councillors did not act in good faith in implementing a system of payment processes that led to the misuse of town council funds.
The court also found that the town councillors and employees were grossly negligent when making $23 million worth of payments to AHTC’s former managing agent, FM Solutions and Services (FMSS).
Some $33.7 million in payments to FMSS and FM Solutions and Integrated Services were also co-signed by conflicted persons or employees of FMSS.
Mr Low stepped down from politics in 2020 and is no longer a town councillor.
In its letter on Tuesday, AHTC said it is confident that the underlying cause of concern related to conflicted persons and absence of safeguards in the payment processes related to the appointment of a conflicted managing agent have been fully addressed.
It pointed to accounting firm KPMG’s report in February 2018 which stated that all audit points had been resolved by AHTC. The town council has also, since mid-2015, adopted a direct town management model instead of hiring a managing agent, which has mitigated risks of non-compliance, it added.
AHTC also cited its green banding for the governance disclosure checklist in the Town Council Code of Governance for financial year 2021 to financial year 2022, and its unqualified audited financial statements from financial year 2019 to financial year 2022.
In 2020, AHTC engaged an independent internal auditor, Baker Tilly Consultancy, for two years to review its corporate governance, procurement and financial rules compliance processes to further enhance its governance, and no material control weaknesses were flagged, it added.
In response to whether AHTC intends to take any other action, the town council said it has no plans to do so.
Mr Tan said: “AHTC trusts that no regulatory action needs to be taken by (MND) in relation to the exercise of Ms Lim’s and Mr Singh’s powers and duties.”
In response to queries, an MND spokesman said it has received AHTC’s response. “We will review the information and provide an update in due course,” she said.
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