AHTC trial: Ex-WP chief Low Thia Khiang 'directed' new managing agent even before official appointment, says lawyer

Former Workers' Party chief Low Thia Khiang had "directed" a new managing agent to take over staff from the Hougang town council even before it was officially appointed, according to lawyer Davinder Singh.
Former Workers' Party chief Low Thia Khiang had "directed" a new managing agent to take over staff from the Hougang town council even before it was officially appointed, according to lawyer Davinder Singh.ST PHOTO: TIMOTHY DAVID

SINGAPORE - Former Workers' Party (WP) chief Low Thia Khiang had "directed" a new managing agent to bring Hougang town council’s staff under its control even before it was officially appointed, lawyer Davinder Singh said on Wednesday (Oct 17).

The Senior Counsel also charged that Mr Low had already conceived a plan to fund the newly-formed FM Solutions & Services (FMSS) using monies from the Aljunied-Hougang Town Council (AHTC).

But Mr Low said that his May 2011 e-mail to Ms How Weng Fan, whose late husband Danny Loh started FMSS, was just stating the conditions FMSS would have to meet in the event that the firm was appointed managing agent for AHTC.

On the ninth day of a multimillion dollar civil lawsuit against three WP MPs for allegedly breaching their fiduciary duties in running their town council, Mr Singh repeatedly questioned Mr Low about where FMSS would find the money to hire the staff from Hougang Town Council.

Mr Low replied: "They will go and find the money. It's their company... I'm sure they have their own plan."

Mr Singh said: "You were the one who told Ms How to set up the company, and told Ms How that FMSS should engage the Hougang (Town Council) staff... When you say their plan, it was all your plan... It was you who was driving the entire thing."

Mr Low, who is one of eight defendants being sued, said it was up to FMSS to find an investor and the money.

Mr Singh made the case that Mr Low and his fellow WP MPs had already decided to terminate the incumbent managing agent for Aljunied Town Council, CPG Facilities Management, before CPG told them on May 30, 2011 that it wanted out.

 
 
 

This was evident, he said, in an e-mail circulated among the WP MPs days before May 30. It said "the existing managing agent of Aljunied Town Council will report to us until we release them at such date, no later than Aug 1".

Mr Low said this was just an assumption the town councillors made, that CPG would ask to leave.

Nothing in the e-mail suggested any such assumption, said Mr Singh, who is representing Pasir Ris-Punggol Town Council in the lawsuit.

Mr Low said: "It's not here (in the e-mail) lah. It has always been on our minds."

"I'm sorry to say that you're not being honest," Mr Singh responded.

Mr Low replied: "I'm here looking you in the eye and telling you the truth."

Mr Singh said many people have looked him in the eye and told him things that were untrue.

"I declare I'm honest," Mr Low responded.

After being pressed again by Mr Singh, Mr Low said: "I think you are right. It appears to be that we have decided. But the fact is that we haven't."

The lawsuit, initiated by AHTC under the direction of an independent panel, centres on $33.7 million in payments that the town council made from 2011 to 2015 to FMSS and its service provider, and these are alleged to be improper and void.

Mr Singh asked Mr Low if underlying the Town Council Act and rules is a need for objectivity, independence and having an "arm's length" in the relationship between the town council and its managing agent.

Mr Low said "yes and no", as the town council has to work closely with its managing agent.

Referencing a Chinese saying, xuan xian bu bi qin chou, Mr Low said that as long as a person of a certain ability is recommended, it does not matter if he is a friend or enemy.

In the town council's case, he was looking at who could perform the job so that services to residents would not be disrupted.

Later, Mr Singh also questioned Mr Low multiple times why he had not called for a tender, despite knowing the town council rules, or asked CPG to stay on while a tender was called.

Mr Low replied: "It did not cross my mind."

Mr Singh shot back: "How can it be that all these MPs, including an experienced town councillor who has been a (town council) chairman for 20 years and three lawyers, didn't even raise this issue?"

"But that's a fact," Mr Low said.

"It's either that, Mr Low, or as I suggest to you there was no intention to call a tender," Mr Singh said.

Mr Low replied: "It did not cross my mind whether a tender should be called under the circumstances... The thought just didn't arise in the mind."

Mr Singh subsequently sought to establish that Mr Low and his fellow town councillors had planned for FMSS to manage the town council from the start, as evidenced by notes that indicated new staff would "take over" from CPG on July 15.

But the defence maintained that CPG had told the town council of its desire to terminate the contract only on May 30, 2011. But as there was a July 15 date marked for takeover, there was no time to carry out a tender.

Mr Singh said: "So if you had called a tender, then you couldn't do what you had planned to do on 15 July... In other words, a tender would have upset the plan, correct?"

Mr Low refuted the point, saying the "contingency plan" for FMSS to serve as managing agent only kicked in when CPG asked to leave. He added: "It was not on the mind (as to) whether we should call a tender and ask (CPG) to stay on."

Mr Singh said: "The reason it would appear that it didn't occur to you is because you were proceeding with FMSS, when it comes down to it."

Mr Low said FMSS was "the best possible option we could have".

Mr Singh went on to add: "It's not a question about there being no time to do a tender, it's not a question where you were being put in a situation where it would be a rush to call a tender... Your own fallback plan would be inconsistent with calling a tender."

Mr Low replied: "Yes you can say that, but it has never been on my mind to call a tender in the first place."

After the lunch recess, both Mr Singh and Mr Low disputed the motives for postponing a town council meeting. It had been planned for July 21, 2011 but was moved to Aug 4, 2011.

This was because AHTC chairman Sylvia Lim raised concerns that CPG - which would be discharged from August - would still be present at the meeting, Mr Low said.

He told the court he did not feel comfortable and that it was “awkward” having CPG around when the town council was discussing the details of FMSS’ appointment.

Mr Singh questioned Mr Low for about 20 minutes about his discomfort.

At one point, Mr Singh asked: “I’m trying to understand why you had that feeling...when everything was kosher, meaning there was nothing to hide and everything was perfectly legitimate?”

Mr Low said the distrust he had was inherent.

But Mr Singh said Mr Low and his town councillors did not want CPG to find out that AHTC was appointing a new agent without a tender.

Up to that point, Mr Singh said that CPG would have had the impression that AHTC would be run in-house, instead of by a newly-appointed managing agent.

This impression, Mr Singh added, was established the previous day during the trial, because the secretary of Hougang Town Council - which was run in-house - had e-mailed CPG, saying it was taking over Aljunied Town Council.

“So having conveyed that impression, it would have crossed your mind that if CPG had found out, CPG might say at the meeting: What are you doing? You have to tender?” Mr Singh asked.

Mr Low replied: “No, that didn’t cross my mind.”

The High Court also heard on Wednesday that in FMSS’ Letter of Intent sent to AHTC in June 2011, the firm said its scope of work would follow the specifications stipulated in CPG’s contract with the Aljunied Town Council.

Mr Singh said that Mr Low should have checked CPG’s contract before deciding to sign on FMSS.

“Responsible town councillors and (town council) members would ask themselves which parts of the (CPG) contract are applicable and which parts are not?” Mr Singh said.

Mr Low agreed, and said he himself did not look at the contract, but he could not assume that the others also did not, including the then-AHTC chairman, Ms Lim.

Mr Singh also asked why FMSS’ managing agent fees were structured in a way to include a $1.1 million annual cost for employing all the existing staff of Hougang Town Council.

Mr Low said the negotiations had been left to Ms Lim and he was not privy to the information.

Mr Singh responded to Mr Low, who was on the stand for the second day in a row: “And that might shorten your cross-examination.”