AHTC trial: FMSS not given chance to respond to report, accountant says it was not necessary

SINGAPORE — Its report stated that the former managing agent of Aljunied-Hougang Town Council overcharged for its services and may have “deliberately put forward increased rates”.

But auditing firm PricewaterhouseCoopers (PwC) did not provide FM Solutions and Services (FMSS) with a chance to respond.

Cross-examining PwC partner Goh Thien Phong on Monday (Oct 15), FMSS’ lawyer questioned the independence of PwC’s assessment of past payments made by Aljunied-Hougang Town Council (AHTC).

The report was prejudiced, said defence lawyer Leslie Netto.

PwC should have observed a process called Maxwellisation, a legal practice allowing criticised parties an opportunity to respond, before publishing its report on April 30 last year, he said.

Mr Netto represents FMSS and the husband-and-wife team behind it, Ms How Weng Fan and the late Danny Loh. Along with three Workers’ Party Members of Parliament (MPs) and two other town councillors, they are being sued by Pasir Ris-Punggol Town Council and an independent panel acting on behalf of AHTC.

AHTC wants the defendants to account for over S$33.7 million paid to FMSS between 2011 and 2015.

Mr Goh was the town councils’ second and final witness, after KPMG forensics partner Owen Hawkes took the stand last week. Former WP chief Low Thia Khiang will take the stand as the defendants’ witness from Tuesday afternoon.

SOME ‘LAUGHABLE’ SPECULATION

Echoing fellow defence lawyer Chelva Rajah – who is representing Mr Low and his fellow MPs Sylvia Lim and Pritam Singh – Mr Netto sought to cast doubt on the fairness of the PwC team.

“Your report is prejudiced and cannot by any stretch of imagination be regarded as an independent opinion of a fair-minded accountant,” Mr Netto said.

Calling PwC’s assertions “laughable” speculations “going beyond areas covered by KPMG”, Mr Netto put it to Mr Goh that he would have arrived at a different conclusion, had he sought a response from Ms How or FMSS.

Ms How would have told him that she and her husband were “never told with certainty” that the managing agent contracts would be awarded to FMSS between the firm’s incorporation on May 15 and July 8 in 2011, said Mr Netto as he read out parts of Ms How’s affidavit.

“There were so many things to think about and talk about (in that uncertain period). Those who suggest that there was any kind of mischief or conspiracy must be crazy,” Ms How said in her written statement.

Ms Lim and Mr Low “are not the kind of people who will whisper and plot”, she added.

Ms How said Ms Lim “has a mind of her own”.

“Nobody can ask favours of her. She is officious and deals with everyone at arm’s length,” said Ms How.

Of Mr Low, she said: “He is not the kind of person who will do favours at the expense of the Town Council. No way.”

Although she was never certain FMSS would get the managing agent contract at AHTC, she and her husband “expected it to happen”. This was because Ms Lim and Mr Low “feared sabotage and did not trust CPG (Aljunied Town Council’s managing agent before WP won the constituency in the 2011 General Election) since CPG was beholden to (the People’s Action Party)”.

Mr Goh said PwC did not “see the need” to seek FMSS’ response for its report.

“I understand KPMG has done Maxwellisation (with FMSS, but they did not go far in getting a proper account from her), so we do not see it necessary to seek (their comments),” he said, citing how Ms How did not accede to KPMG’s request for an interview.

And even if he had sought comments from Ms How, it would not have changed anything in PwC’s report as two things were “missing” in her account, Mr Goh said.

"First, there is nothing to show us that there is indeed negotiation of the pricing of (FMSS’) first managing agent contract (resulting) in a higher price to be paid to FMSS,” said Mr Goh.

“Second, there is one piece of documentation that is left out, which is an email by one town councillor to Ms How (in early) May 2011 to tell Ms How that her company will be the managing agent for a period of one year – as early as that. I don’t know why she said she is not certain, but it (appears apparent that) she will be the managing agent without even calling for a tender.”

Mr Goh led a review of past payments by AHTC – then known as Aljunied-Hougang-Punggol East Town Council (AHPETC) – during the period when WP won a by-election and took charge of the Punggol East ward between 2013 and 2015.

Last week, Mr Rajah said Mr Goh had sought to find fault and argued that there were good reasons why AHTC did not extend some contracts and chose not to award other contracts to the lowest bidders.

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