SINGAPORE — Payments made by the Workers’ Party’s (WP) Aljunied-Hougang-Punggol East Town Council (AHPETC), which amounted to millions of dollars, to related parties were “unlawful” and represent a serious conflict, said Foreign Affairs and Law Minister K Shanmugam today (Feb 12) in Parliament.

In a strongly-worded speech, Mr Shanmugam said the payments were done without accountability or full and frank disclosure. Neither was there a discussion made on the conflict of interest.

He pointed out that the AHPETC’s general manager How Weng Fan and her husband Danny Loh, who is the town council’s secretary, did not need to set up a new company to provide services to the town council as they could have been employed by them directly. The set up of their company FMSS, which became AHPETC’s managing agent in 2011, was a “convenient vehicle” to which millions of dollars went from the town council to the company. He stressed that this process “is unacceptable, it is unlawful”.

He also said that the town council paid out “significantly higher” managing agent fees to FMSS, compared with other town councils. “The rhetoric from the WP is always about helping the poor man. The reality is WP took money from the man in the street and gave it to FMSS,” he said.

There were also no minutes of town council meetings in which any disclosure of FMSS’ relationship was recorded, and town councillors were only told they were directors or employees, which was odd, he noted.

“That is not negligence, it is an active decision to suppress. It raises the issue of integrity,” he said, charging AHPETC with deliberate and persistent non-disclosure and pressing it to explain what it is hiding.

Referring to each of the town council’s five MPs, he pointed out that he could not believe they did not know about the conflict of interest as well as the fact that such a structure breaches the law.

The Auditor-General’s report “makes sad reading”, he said, as it shows that the town council “is in shambles”.

“It is not just a matter of there having been a few lapses on some issues,” he said. “So many things are so disastrously wrong,” he said, adding that each of them have breached their fiduciary duties. It is time for WP to come clean and explain themselves, as their residents deserve real honest answers, he said.