AHPETC given 3-month deadline to make all transfers to sinking fund
SINGAPORE — The Aljunied-Hougang-Punggol East Town Council (AHPETC) was today (Nov 27) given a three-month deadline to make all the transfers to its sinking fund it has hitherto missed, while it also has to bring in accountants that have to be approved by the Housing and Development Board (HDB) to help it fix areas where it has breached the Town Councils Act.
SINGAPORE — The Aljunied-Hougang-Punggol East Town Council (AHPETC) was today (Nov 27) given a three-month deadline to make all the transfers to its sinking fund it has hitherto missed, while it also has to bring in accountants that have to be approved by the Housing and Development Board (HDB) to help it fix areas where it has breached the Town Councils Act.
The orders were handed down by the Court of Appeal today, which gave its ruling on an earlier unsuccessful bid by the Ministry of National Development (MND) and the HDB to have independent accountants appointed to the town council. The court application arose after the Auditor-General’s Office uncovered major lapses in governance and compliance in AHPETC.
Today, Chief Justice Sundaresh Menon, who delivered the judgment on behalf of the apex court, ruled that AHPETC had breached its duties under the Town Councils Act in various ways. But he said the courts cannot accede to the authorities’ application for the courts to take charge of appointing accountants to AHPETC.
Instead, the courts’ power extends only to making orders that will compel AHPETC to take steps to rectify these breaches, he added.
To that end, CJ Menon ordered that AHPETC is to appoint accountants to help identify the areas where it is still falling short of meeting obligations set out under the law, as well as advise on the steps that must be taken to correct them.
The accountants are to produce monthly reports on the progress of these corrections. The reports are to be submitted to the HDB, which may make these publicly available on the first day of every month, starting Jan 1 next year, said the Court of Appeal, which included appellate judges Chao Hick Tin and Andrew Phang.
In addition, the accountants are to establish “whether any past payments made by AHPETC were improper and ought therefore to be recovered”. Previously, AHPETC’s transactions with related parties — specifically, its managing agent that was run by the town council’s office holders — had raised red flags.
The deadline to make the sinking fund transfers means the Workers’ Party-run organisation — since renamed to Aljunied-Hougang Town Council following its electoral defeat in Punggol East earlier this year — could have to accept conditions laid down by the MND for grants to be disbursed — an option that it had snubbed. Alternatively, AHPETC has to raise the money through other ways, such as raising constituents’ conservancy and service charges and/or liquidating its investments.
MND had withheld two years of government grants, totalling about S$14 million, from AHPETC, saying it has no guarantee the money would be used properly. AHPETC had said the withheld grants was why it was late in making good the quarterly transfers to its sinking fund in FY2014/15. Its transfer for the last quarter, which was due on April 30 this year, is outstanding.
In its grounds of decision, CJ Menon said that in deciding the appropriate order, the court was mindful of two important considerations.
“The first is that AHPETC, and not some other party, must be the one to perform the statutory duty; the second, on the other hand, is that where it has failed to act, any order we make should be effective in compelling AHPETC to comply with (its duties under the Town Councils Act),” he said.
The judges added that they cannot accede to the manner of the authorities’ application for the appointment of accountants to AHPETC because it was tantamount to the court appointing its own agents to perform the powers, duties and functions of the town council.
Today, the court also rejected that MND had the standing to bring a case to court when a town council fails to fulfil its duties. CJ Menon said there was a “logical gap” in their argument that since the minister has certain powers to regulate the affairs of town councils, he also has the regulatory oversight of town councils in general. But it allowed the HDB — a statutory board under MND — to be joined as a party to the legal proceedings.
On its decision, CJ Menon said “there is no conceivable prejudice that is caused to AHPETC as a result of the HDB being joined that cannot be compensated by a suitable costs order”. HDB had applied to be a co-plaintiff in the case after the judge in a lower court noted that only HDB or residents — and not MND — could take legal action against a town council if it fails to perform its duties.