Aljunied-Hougang Town Council’s (AHTC) 8-year saga in 7 minutes

We’re (finally!) near the the tail end of the long-running saga of Aljunied-Hougang Town Council (AHTC) and you should start catching up now.

May 2011

The WP wins the Aljunied GRC and Hougang SMC in the General Election and retains the single seat of Hougang. Shortly after, FM Solutions and Services (FMSS) is formed.

August 2011

The WP takes over AHTC and appoints FMSS as its managing agent on a one-year contract.

April 2012

WP calls for a tender for managing agent services, and only FMSS submits a bid.

January 2013

WP wins the single seat of Punggol East in a by-election and brings it into its existing GRC town council, and they rename it as the Aljunied-Hougang-Punggol East Town Council (AHPETC).

May 2013

PAP MPs question the WP during a Parliamentary debate about a possible conflict of interest arising from the fact that WP supporters own FMSS.

February 2014

The Government directs the Auditor-General’s Office (AGO) to audit the town council’s accounts after AHPETC’s own auditor raises 13 issues of concern.

February 2015

The AGO flags lapses in governance and compliance, including FMSS’ co-owners being town council staff. Mr Loh and his wife Ms How, are owners of FMSS. The AGO finds out that Loh is also the secretary of the town council, with the power to co-sign cheques, while Ms How is the general manager. Mr Loh and Ms How are long-time WP supporters.

September 2015

WP loses Punggol East to the PAP in the General Election. The town council is renamed AHTC.

November 2015

The Court of Appeal orders AHTC to appoint a “Big Four” accounting firm to fix lapses found by the AGO.

January 2016

KPMG is appointed to audit AHTC.

October 2016

The KPMG audit finds serious flaws in AHTC’s governance and highlights improper payments of $33.7 million to FMSS.

February 2017

AHTC appoints an independent panel to review the KPMG report. The panel is chaired by senior counsel Philip Jeyaretnam, the youngest son of veteran opposition politician and lawyer, Joshua Benjamin Jeyaretnam (JBJ).

July 2017

The independent panel, on behalf of AHTC, files a civil lawsuit against WP MPs Low Thia Khiang, Sylvia Lim and Pritam Singh, amongst others, for breach of fiduciary duties. The MPs reject the allegations and say it will contest the suit.

September 2017

Pasir Ris-Punggol Town Council (PRPTC) also file a suit against the three WP MPs for losses allegedly incurred back when WP ran Punggol East constituency.

October 2018

The trial begins in the High Court, to find out if the town councillors as well as FMSS and its co-owners are liable for the alleged improper payments.

January 2019

All parties file their closing submissions to the court, summarising their arguments made during the trial.

April 2019

PRPTC, AHTC and the WP MPs appear in court to deliver their oral submissions. The MPs’ lawyers say the S$33.7 million claim is speculative — only S$15,710 is recoverable.

October 2019

Justice Kannan Ramesh finds the WP MPs, together with the other town councilors and senior employees of AHTC and FMSS, liable for damages in millions of dollars suffered by AHTC.

At this point, this judgment does not affect their position as MPs, as it arises from civil proceedings. The MPs have to decide within a month (by 11 Nov) whether to appeal against the verdict.

Damages and how much can be recovered from the MPs will be assessed by the court at a later date. 

Read the High Court Judge’s written judgment here and the case summary here.

November 2019

DPM Heng Swee Keat move a motion in Parliament to call on AHTC to recuse WP MPs Sylvia Lim and Low Thia Khiang from AHTC financial matters. This is on the grounds of the October court finding that they had acted dishonestly and in breach of their fiduciary duties.

Parliament vote for and pass said motion.

This is a logical call to ensure good governance. The court has already found the WP MPs liable, so they are, for now, liable until proven otherwise. The right and also prudent thing to do is for them to recuse themselves from making financial decisions at AHTC until the appeal is over.

This is no different from similar incidents in the corporate world. If an audit uncovers lapses by key personnel as serious as this, the possibilities are termination or at least removal of the key personnel to handle non-financial related work until investigation is completed.

Highlights of the Parliamentary debate on AHTC (5 Nov 2019)

In his Parliamentary speech, DPM Heng had spelt out how the WP has “persistently refused” over the last eight years to be transparent on its actions in the AHTC saga involving the appointment of a managing agent.

The full speech is worth your time, so here.

Watch Sylvia Lim’s response here, the exchange between DPM Heng and Sylvia Lim here. Senior Minister of State for Law, Edwin Tong, also made an impactful speech on the topic, where he’d said, “Even a child knows you don’t ask the fox to guard the chicken coop.”

Highlights of DPM Heng’s Parliamentary Speech

“Very serious adverse findings were made against them — findings that go to the heart of the integrity of these MPs, and the deceptive manner in which they conducted the town council’s affairs. How can they remain in charge of the town council’s affairs, as if it is business as usual?”

“At the very least, should not the chairman and other town councillors require them to recuse themselves from handling the town council’s financial matters, as called for in this motion?”

If AHTC were a Company…

“If AHTC were a company, Ms Lim and Mr Low would, at the very least, have been interdicted — prohibited or restrained from acting — pending their appeal.”

“Most likely, they would have been forced to leave the company a long time ago — when AGO, and then KPMG, made their findings — instead of being allowed to carry on, in the same roles and enjoying the same degree of financial oversight over public funds.”

“If they were members of a professional body, their acts of dishonesty would have brought them before a disciplinary tribunal.”

“As the earlier judgment of High Court noted, they might have been exposed to civil liability, or, in an extreme scenario, to criminal liability.”

DPM Heng Swee Keat (left) tabled a parliamentary motion for WP MPs Sylvia Lim and Low Thia Khiang to recuse themselves from AHTC financial matters (Source: Straits Times)

DPM Heng Talks about Integrity and Character Expected of Public Officials and MPs

“In politics, we must uphold the fundamental values of integrity, honesty, and incorruptibility.”

“Not by words, but by deeds.”

“We know the words of the WP. They claim to stand for transparency and accountability.”

“But now, after eight long years, we know that their deeds show the contrary.”

  1. They appointed their friends to manage the town council, at a higher cost than the previous managing agent.
  2. They concealed the real facts and manipulated the circumstances of this appointment, even to the extent of misleading their fellow town councillors.
  3. They then told the public, their auditors, and Parliament untruths about these circumstances.
  4. They refused to give auditors documents – documents that might have shed light on their wrongdoing.
  5. Even after these facts were uncovered by independent auditors, they took no action.
  6. It took the independent panel that they appointed to finally bring them to court to set things straight.
  7. And even before the court, they continued to perpetuate untruths.
  8. The consequences of what the WP town councilors have done has fallen on the residents.
  9. Under the management of FMSS, the Town Council ran deficits of up to S$2 million by the third year. Meanwhile, their friends, FMSS, made a profit of $3.2 million in their second year.
  10. Even after all these has been made public, the WP has stayed silent.

“We cannot sweep things under the carpet. All that this House is asking, is for Ms Lim and Mr Low to recuse themselves from dealing with or having oversight over financial matters, until the court case is concluded.”

(Featured image via TODAY)

Leave a Reply