AHTC trial: Invoice of over $106,000 paid to FMSS not improper, says defence

Workers' Party MPs Pritam Singh, Low Thia Khiang and Sylvia Lim outside the Supreme Court on Oct 9, the third day of a multimillion-dollar trial. ST PHOTO: MARK CHEONG

SINGAPORE - An invoice of more than $106,000 paid by Aljunied-Hougang Town Council (AHTC) to its managing agent came under the spotlight on the third day of a multimillion-dollar trial involving three Workers' Party (WP) MPs.

On Tuesday (Oct 9), Senior Counsel Chelva Rajah, who is representing the WP MPs, disputed a 2016 finding by auditors that the payment was unsupported by any contract and improper. A part of this sum went to the reimbursement of salaries for Hougang Town Council staff for the first two weeks of June 2011, he said.

This fact emerged during the defence lawyer's cross-examination of KPMG executive director Owen Hawkes, who was repeatedly questioned over whether he had sought clarification from the town council or its agent, FM Solutions & Services (FMSS), over the details of the invoice.

The KPMG team, in its 2016 report, had pointed out that the letter of intent from FMSS said only that it would take over the salaries and appointment of Hougang Town Council's staff from June 15, 2011. This was in preparation for the merger of the Hougang and Aljunied GRC town councils after the WP won Aljunied GRC.

Mr Rajah's disclosure that FMSS was claiming for salaries for the entire month of June 2011 drew swift objections from Mr David Chan, who is representing AHTC, and Senior Counsel Davinder Singh, who is representing Pasir-Ris Punggol Town Council (PRPTC).

They said this fact should have been included in the pleadings, with the related documents disclosed.

Even so, Mr Singh questioned who gave FMSS the authority to make the salary payments, adding that there was "a complete lack of control and systems of checks and balances".

Justice Kannan Ramesh agreed that the new information put forth by Mr Rajah should be put into the proceedings, and Mr Rajah said he would amend them.

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 service provider FM Solutions and Integrated Services, which are alleged to be improper and void.

WP chairman Sylvia Lim and then WP chief Low Thia Khiang have been asked to account for the money and to repay any sums paid out wrongfully.

As the WP had also managed Punggol East from 2013 to 2015, after winning the constituency from the ruling party in a by-election, the PRPTC is also suing to recover Punggol East's share of losses arising from the alleged improper payments.

The other defendants are WP chief Pritam Singh, town councillors Kenneth Foo and Chua Zhi Hon, FMSS and its owner How Weng Fan. Ms How is also representing her late husband, Mr Danny Loh Chong Meng, who founded FMSS with her.

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