AHTC lawsuit pins most of the blame on Low Thia Khiang, Sylvia Lim

SINGAPORE — Workers’ Party (WP) leaders Low Thia Khiang and Sylvia Lim were singled out for the most blame in a civil lawsuit filed by the Aljunied-Hougang Town Council (AHTC) against its councillors and former employees over improper payments to various parties.

Based on the statement of claim, the suit alleges that Mr Low and Ms Lim had breached their core fiduciary duties to the town council, causing it to pay more than S$33 million to its former managing agent and service provider in controversial circumstances between 2011 and 2015.

AHTC had appointed FM Solutions & Services (FMSS) as its managing agent, and FM Solutions and Integrated Services (FMSI) as its service provider. Both companies were set up and run by two WP supporters Danny Loh, who died last year, and his wife How Weng Fan. The two WP leaders’ shortcomings, the town council alleges, included getting Mr Loh and Ms How to set up the two companies despite knowing it would put the couple in “a position of perpetual conflict of interest and/or duty”.

Mr Low, who is the WP’s secretary-general, and Ms Lim, who was AHTC chairman during the period stated in the lawsuit, had also breached their fiduciary duties by “failing to exercise proper scrutiny in causing AHTC to improperly waive the tender” for its first managing agent contract.

The town council had hired FMSS — without calling a tender — to provide managing agent services and project management services from July 15, 2011 to July 14, 2012. In its lawsuit, AHTC alleges that Ms Lim and Mr Low had provided “misleading statements” about FMSS. For example, there was “no record of disclosure” made during the town council’s meeting on Aug 4, 2011, that the late Mr Loh and Ms How were the owners of FMSS, although this was “well known” to Ms Lim and Mr Low.

There were also no “appropriate safeguards” put in place, leading to a conflict of interest when it came to contracts between AHTC and FMSS/FMSI. Ms Lim and Mr Low are alleged to have “authorised, approved, acquiesced … otherwise caused AHTC to enter into the FMSS Contracts and the FMSI EMSU (estate maintenance service unit) Contracts”.

They are also accused of breaching their fiduciary duties to AHTC by waiving the need for quotations for certain transactions without obtaining the necessary authorisation from the town council chairman, who was Ms Lim herself at that time.

AHTC pointed out that Ms Lim, in particular, had also breached her fiduciary duties by “failing to conduct proper checks before signing off on cheques in favour of FMSS”.

“In signing off cheques to FMSS without properly scrutinising the payments and/or adequate verification, Sylvia Lim breached her duty of care,” said the town council.

AHTC also alleged that Ms Lim, Mr Low and the other town council staff named in the lawsuit had breached the Town Council Financial Rules for 10 construction projects, each estimated to cost more than S$70,000, by failing to call for a tender for each project and by not accepting the lowest tender.

Under the rules, tenders have to be called for projects above S$70,000 and the reasons for not accepting the lowest tenders have to be provided.

“Instead of issuing separate tenders for each of these projects, AHTC invited a tender for consultants on a fixed fee basis, with the intention of choosing from a panel of pre-approved consultants to assist in managing certain project from time to time,” the statement of claim said.

The town council had engaged the firm LST Architects for all the 10 projects although the firm’s tender bids were higher than Design Metabolists in seven of these projects.

This was done “without adequate justification and/or without recording the circumstances and reasons for doing so”.

By engaging LST Architects, the councillors had caused the town council to incur an additional S$2,794,560 in costs, according to the statement of claim. Amanda Lee