AHTC calls for S$33.7m worth of contracts to be voided

SINGAPORE — Aljunied-Hougang Town Council (AHTC) wants contracts worth over S$33 million with former managing agent FM Solutions & Services (FMSS) and service provider FM Solutions and Integrated Services (FMSI) to be declared void, owing to the supposed breach of fiduciary duties by its town councillors.

The town council wants to claim back “improper” payments it made to the two entities, according to its statement of claim against eight parties — including town councillors Ms Sylvia Lim, Mr Low Thia Khiang and Mr Pritam Singh.

“The conflicts of interest inherent in those transactions were so severe that, without the implementation of appropriate safeguards, those transactions were incapable of being authorised by AHTC and/or the Town Councillors acting consistently with their fiduciary duties,” said AHTC.

Under the contracts, a total of S$33,717,535 was paid to FMSS and FMSI between 2011 and 2015, while another S$764,479 has not been paid to them, the court document stated.

The payments include more than S$1.2 million that the town council could allegedly have saved, had it continued to use the services of the previous managing agent, CPG Facilities Management.

The lawsuit was brought on the town council’s behalf by an independent panel appointed in February.

It consisted of accountant Ong Pang Thye and senior lawyers Philip Jeyaretnam and N Sreenivasan.

According to the statement of claim, the flawed system of payments involved invoices to AHTC from FMSS’s director Ms How Weng Fan and her late husband Danny Loh, FMSI’s sole proprietor.

The couple were also town council officers, and would certify the work done and approve payments on behalf of the town council to their companies.

Such a system provided no safeguard to public funds held by the town council, which did not have processes to independently assess FMSS and FMSI’s service levels, according to the statement of claim.

“Accordingly, no town councillor could have reasonably approved the system, without being in breach of his or her fiduciary duties,” it stated.

Among other things, the town council claims it is entitled to an account of profits allegedly made by Ms Lim, Mr Low, Ms How and Mr Loh.

It wants “equitable compensation” for any losses suffered from the breach of fiduciary duties.

FMSS first came under the spotlight in May 2013, when Parliament debated the Ministry of National Development’s review report on the controversial sale of a town council management computer software by the People’s Action Party (PAP) town councils to a PAP-owned company called Action Information Management.

When Ms Lim, who is Member of Parliament for Aljunied group representation constituency, suggested the ruling party would risk compromising residents’ interests to trip up the Opposition, then-Minister for National Development Khaw Boon Wan turned the tables on her.

He said FMSS’ Ms How and Loh were long-time Workers’ Party supporters, adding that the company was set up four days after the Workers’ Party won Aljunied GRC in 2011 and given a S$5.2 million-a-year managing agent contract without the town council calling a tender. Amanda Lee