MND asks AHTC for information on Sylvia Lim, Pritam Singh's roles in payment and procurement processes

SINGAPORE: The Ministry of National Development (MND) has asked Aljunied-Hougang Town Council (AHTC) for information on the powers and duties of Workers' Party (WP) leaders Ms Sylvia Lim and Mr Pritam Singh, in relation to their involvement in the town council's payment and procurement processes. 

In response to CNA's queries, MND said it has given AHTC two weeks from Tuesday (Aug 22) to respond to its request.

Upon hearing back from the WP-run town council, National Development Minister Desmond Lee will then consider whether further regulatory action is needed to safeguard public money entrusted to it.

"If AHTC does not respond in time, MND will check in with AHTC to understand the circumstances before deciding on the next steps," said the ministry.

MND's statement on Tuesday is the latest development in a long-running saga over the negligent handling of S$33.7 million (US$25 million) of AHTC funds.

In July, the Court of Appeal found WP chairwoman Ms Lim and former party chief Low Thia Khiang liable for negligence in the town council's payments process. Lawyers representing AHTC in the suit did not make any claim against Mr Singh over the control failures.

CNA has asked AHTC for its response to MND's request.

On Tuesday, MND said it has also cancelled a rectification order issued to AHTC in January 2020, which required the town council to restrict Ms Lim and Mr Low's powers in handling some of its financial matters.

This was to "guard against a recurrence of irregularities in AHTC’s financial affairs", after the High Court found at the time that both Ms Lim and Mr Low had breached their fiduciary duties to AHTC.

Ms Lim and Mr Low appealed the judgment, although AHTC complied with the order.

The Court of Appeal's findings – released in two parts in November 2022 and July this year – eventually determined that Ms Lim and Mr Low did not owe fiduciary duties to AHTC.

But MND noted that the Apex Court did find that Ms Lim, Mr Low, Mr Singh, then-AHTC councillors Chua Zhi Hon and Kenneth Foo, as well as former town council managing agent director How Weng Fan and her late husband Danny Loh, did not act in good faith in the discharge of their duties, and in payment processes.

"This is a serious finding," MND said on Tuesday, adding that the Court of Appeal "also found them to be grossly negligent".

They allowed the managing agent FMSS – a service provider hired to help run day-to-day operations in the town – to pay money to itself and others "without proper controls", and that money could be paid, "even if work was not done, or not properly done", said MND.

The court had found that the WP leaders and town council employees did not act in good faith when they implemented a standing instruction in September 2011, which required payments to FMSS to be co-signed by the chairman (then Ms Lim) or the vice-chairman (Mr Low or Mr Singh).

This was not a sufficient safeguard, according to the court.

But the Apex Court also accepted that the WP leaders and other defendants had been acting in good faith for several other claims levelled at them, and found that an indemnity clause under the Town Councils Act – protecting town councillors from any legal proceedings for acts done in good faith - could apply to them.

The court also found that the WP leaders and town council employees had acted in good faith when they awarded contracts to FMSS, when they made payments to FMSS for overtime claims and CPF contributions, and when awarding third-party contracts to three service providers.

Ms Lim, Mr Low, Ms How and Mr Loh were found liable to AHTC for negligence in allowing control failures to persist in the payments process, with the court referring specifically to payments to FMSS and its subsidiary FMSI.

But the court also said it was not clear there was evidence of any instance where the control failures actually resulted in improper payments, such as for uncompleted works or works that were not performed up to par.

The control failures may only demonstrate the risk of improper payments, and not the actualisation of that risk, said the court.

Ms Lim was also found responsible for awarding a contract to Red-Power Electrical Engineering at rates that were four to seven times higher than those offered by then-existing vendors Digo Corporation and Terminal 9.

MND noted that Ms Lim and Mr Singh remain AHTC councillors, with the former sitting on the audit committee and estate and community liaison committee.

Mr Singh chairs the public relations committee, and is also a member of the tenders and contracts committee, as well as the estate and community liaison committee.

"As such, they may continue to be involved in implementing and/or monitoring AHTC’s payment process, as well as make procurement decisions," MND said.

Besides writing to the town council to seek information on the duo's specific powers and duties when it comes to AHTC’s payment and procurement processes, the ministry wanted to know the other actions that AHTC intends to take in relation to them, given the Court of Appeal's findings.

Editor’s note: This article has been updated with additional information from the Court of Appeal judgements.