MND applies to add HDB as co-plaintiff at appeals stage in WP town council case

HDB might be brought into a case involving the Workers' Party-run Aljunied-Hougang-Punggol East Town Council.
HDB might be brought into a case involving the Workers' Party-run Aljunied-Hougang-Punggol East Town Council. PHOTO: ST FILE

SINGAPORE - The Housing Board may be brought into a case involving the Workers' Party (WP)-run town council, if the Court of Appeal next month upholds a High Court decision not to appoint independent accountants to the town council.

The application, which was made on June 22, is still contingent on permission being granted by the Court of Appeal for the HDB to be added as a co-plaintiff, The Straits Times has learnt.

High Court Justice Quentin Loh had in May rejected the Ministry of National Development (MND)'s bid to appoint the accountants, finding that the law only prescribes for the HDB or residents - and not MND - to take legal action against a town council if it fails to perform its duties.

He also said that MND already has the powers to impose conditions - such as accountants - when disbursing grants.

Now, the MND wants to add the HDB as a co-plaintiff if the Court of Appeal comes to two conclusions: (i) that the HDB - and not the MND - is entitled to seek the court order; and (ii) that the sole reason MND's application for the court to appoint external accountants cannot be granted is because it is not the correct party to do so.

Lawyer Peter Low, who represents the Aljunied-Hougang-Punggol East Town Council (AHPETC), told The Straits Times after a closed-door hearing before Assistant Registrar Paul Chan on Monday that deadlines were set for the exchange of submissions on this matter.

AHPETC is to file a reply affidavit by July 20, with MND to reply by July 24, Mr Low said. Following which, parties are to provide skeletal arguments to the Court of Appeal by July 29.

The Court of Appeal hearing has been fixed for August 3.

This is the latest development in the saga over AHPETC's finances. A year-long special audit by the Auditor-General's Office (AGO) had unearthed serious accounting and governance lapses at the AHPETC, prompting the MND to withhold two years of grants, or about $14 million.

The MND then took out the court order in March, wanting the High Court to appoint the independent accountants to oversee the grants, co-sign on any payments above $20,000, examine its past payments and recover any losses.

While it failed in its bid at the High Court, the MND has said it could not immediately disburse the sum without the independent accountants in place, given the High Court's grim view of AHPETC's actions.

Justice Quentin Loh was critical of the state of its accounts and the validity and propriety of payments previously made to related parties - a reference to its then-managing agent FM Solutions and Services (FMSS), which was owned by some key officials in the town council.

He also had harsh words for the town council, saying among other things that it was a "travesty" that AHPETC has ignored its duties and obligations to residents. He also said AHPETC's failure to make quarterly transfers to the sinking fund was the "height of financial responsibility".

Meanwhile, AHPETC last week submitted its overdue accounts for the 2013/2014 financial year, but its auditors, Audit Alliance, flagged eight areas of concern, including the presence of related party transactions and failing to make timely transfers to its sinking fund.

Its accounts for the 2014/2015 financial year are due by August 31.