HDB has asked AGC for advice on AHTC suit against WP town councillors

The Aljunied-Hougang Town Council has filed a lawsuit against its town councillors.
The Aljunied-Hougang Town Council has filed a lawsuit against its town councillors.PHOTO: ST FILE

SINGAPORE - The Housing Board has asked the Attorney-General's Chambers for advice on the lawsuit that the Aljunied-Hougang Town Council (AHTC) has filed against its town councillors.

In a statement on Wednesday (July 26), the HDB said it has received notice about the claim which was filed by an independent panel appointed by AHTC to help recover improper past payments.

HDB said it is studying the claim, and noted that the claim document sets out allegations of breaches of fiduciary duties and improper payments of town council funds, among other things.

In the claim, AHTC has alleged that all payments it made to its then-managing agent FM Solutions and Services (FMSS) and service provider FM Solutions and Integrated Services (FMSI) are null and void as its town councillors had acted in breach of their fiduciary duties.

It is demanding that Workers' Party (WP) chief Low Thia Khiang; town council vice-chairman Sylvia Lim; Ms How Weng Fan, owner of FMSS; and FMSS, give an account of $33,717,535 of payments made to FMSS and FMSI from July 15, 2011 to July 14, 2015.

Failing which, AHTC wants "equitable compensation" for any sum that has been wrongfully paid out.

At the centre of the issue is what the panel acting on behalf of AHTC alleged is a flawed system that resulted in the appointment of FMSS and FMSI, allowing its officers to benefit themselves.

In its statement, HDB said the claim document contains "serious allegations of misconduct by various defendants".

Mr Low, Ms Lim and town council chairman Pritam Singh have rejected the allegations that they acted in breach of their fiduciary duties. In a joint statement on Wednesday, the WP MPs said they acted in good faith and in the best interests of the residents, and would contest the lawsuit.

Citing the claim AHTC had filed, HDB said: "Ms Sylvia Lim and Mr Low Thia Khiang misled the Town Council, and gave false or inadequate reasons to justify a waiver of tender and secure FMSS's appointment as managing agent."

The HDB added that Ms Lim and Mr Low "decided purportedly on behalf of AHTC that Mr Danny Loh and How Weng Fan would be instructed to set up and incorporate FMSS", even before the incumbent managing agent CPG had apparently expressed a preference to be released.

Quoting the statement of claim, it said the appointment of FMSS and FMSI was "made in bad faith and/or for improper purposes," and was "so unreasonable and/or irrational that no reasonable town councillor would have made the same decision".

It noted that the independent panel is asking the Court to void the contracts with FMSS and FMSI, and is seeking compensation for monies wrongfully paid out.

This is to be taken as the entire sum of $33,717,535, subject to Ms Lim, Mr Low, FMSS, FMSI or Ms How showing which payments were lawful, it said.