AHTC trial: WP-run town council had time to call a tender for new managing agent, says lawyer

WP chairman Sylvia Lim had said in Parliament in 2013 that an open tender was waived, because a managing agent had to be put in place quickly for a handover. PHOTO: LIANHE ZAOBAO

SINGAPORE - By exercising their contractual rights, the Workers' Party-run Aljunied-Hougang Town Council (AHTC) could have retained the incumbent managing agent for longer and given themselves up to four months to call a tender for a replacement, said Senior Counsel Davinder Singh on Friday (Oct 19).

This was because there were discussions for the incumbent CPG Facilities Management to stay until Sept 30, 2011, to facilitate the parallel run of a new IT system which was being implemented in the Aljunied Town Council.

Since CPG told the AHTC on May 30, 2011, that it was terminating its contract, retaining it till Sept 30 that year would have given the town council four months to call a tender for a new managing agent, he suggested.

But instead, AHTC chose to "get rid" of the company by July 31, 2011, and to waive calling for a tender, Mr Singh charged on the 11th day of a multimillion-dollar lawsuit brought against eight defendants, three of whom are WP MPs.

However, WP chairman Sylvia Lim, who was on the stand for a second day, told Mr Singh that the decision was taken because Town Council Management System (TCMS) - a software offered by CPG's computer vendor Action Information Management (AIM) - was no longer available in September.

Keeping CPG on was possible legally and "in theory", she said, and the tender would have required two months. However, the WP MPs' assessment was that they had to put in a "committed team" that would work for the residents, Ms Lim added.

Mr Singh retorted: "Don't blame the residents for your decision to not have a tender."

Ms Lim had said in Parliament in 2013 that an open tender was waived, because a managing agent had to be put in place quickly for a handover.

On Friday, Mr Singh also established that on May 9, 2011 - just two days after winning Aljunied GRC in the general election - the WP MPs had already decided to appoint their own managing agent.

Mr Singh said there should have been a consideration of the need to call a tender then. He asked Ms Lim how she had "jumped" from considering calling for a tender to waiving one.

Ms Lim said this was based on the assumption that CPG had been working with People's Action Party (PAP)-run town councils, and since how MPs managed their towns would have some bearing on their electoral success, the CPG would be committed to the PAP.

Mr Singh again pressed Ms Lim for an answer on not calling for a tender.

Ms Lim replied: "It's a timing issue, and secondly, based on the experience of the past, we knew that very likely, we had better rely on ourselves and do risk mitigation."

"Therefore when you thought about a waiver, you though about relying on yourselves?" Mr Singh asked.

Ms Lim replied: "We had to plan."

Asked by Mr Singh about who the "we" referred to, Ms Lim said it was herself and WP's former chief, Mr Low Thia Khiang.

Mr Singh said: "Which means that as of May 9, it would at least have been decided by the two top people of the party that you were going to appoint your own managing agent."

Mr Singh pointed out that on May 13, the secretary of the WP-run Hougang Town Council, Ms How Weng Fan, e-mailed CPG managing director and Aljunied Town Council general manager Jeffrey Chua to ask about the handover of data as well as for the contact details of Aljunied staff.

Ms How, one of the eight defendants in the case, had been instructed by Mr Low to make the offer to CPG to take over the Aljunied Town Council staff, and was aware, through an e-mail copied to her from the WP MPs, of their decision to appoint a managing agent.

This would give Ms How, whom Ms Lim regarded as an esteemed staff member, the impression she would be involved in some way in the managing agent equation, Mr Singh said.

Mr Singh later said during the proceedings: "You see, Ms Lim, by May 9, it had been decided that CPG would be removed, Action Information Management (AIM) would be removed, a new managing agent would be set up and that would be Ms How's company.

"That decision was implemented with promptitude. With the discussion with Ms How to set up the company, and to move quickly to inform Mr Chua about the offer to take over the staff and the up-scaling of the software. All (this) done before even talking to CPG, talking to AIM, or receiving any notification from any of these companies?" Mr Singh asked.

Ms Lim replied: "I disagree with your characterisation." She maintained that no decision to waive the tender had been made as of May 9, but she had considered that possibility.

The lawsuit centres on $33.7 million in payments that the town council made from 2011 to 2015 to managing agent FM Solutions & Services (FMSS) and its service provider, and these are alleged to be improper and void. Ms How and her late husband Danny Loh are shareholders of FMSS.


On Friday, Mr Singh also charged that FMSS was hired as the town council's managing agent "under the cover of darkness", while the council retained CPG to provide other essential services.

Mr Singh also asked Ms Lim why AHTC retained CPG's services for essential maintenance, but chose to release it as managing agent.

Ms Lim had earlier suggested there was ground feedback against CPG and that, as it was "committed" to the PAP cause, the opposition MPs might not be able to predict its behaviour, despite having a right to retain it as an agent for a longer period. This was given that its contractual period was until July 2013.

Mr Singh later noted that essential maintenance services would need to be carried out by a reliable company, adding that Ms Lim's story did not hold up if, on the one hand, she as a town councillor considered CPG to be reliable but on the other, "needed them out as soon as possible".

"The only explanation that reconciles the two, is that you wanted CPG out... so that FMSS could come in. But at the same time, (you) wanted to take advantage of CPG's services for the essential elements," said Mr Singh.

Ms Lim disagreed.

"You had connived and calculated each move," he continued, adding that AHTC had allowed CPG to continue certain projects that were already underway, including one slated to end in January 2012.

Ms Lim replied: "They suggested it to us (to continue), and we agreed that it was reasonable. They did not ask to be relieved of all their projects."

Asked if she was "content" for this to happen, Ms Lim said she was, as the projects were well underway.

Mr Singh shot back that if she was content to use CPG beyond August 2011, when their managing agent contract would end, it meant her argument that there were complaints from the ground against CPG and that it was PAP-associated and could not be trusted, was "utter rubbish" and "all made up".

Ms Lim replied that the projects were in their advanced stages, and that the town council thought it was sensible to proceed when CPG suggested seeing them through. She added: "It doesn't change the fact that they requested to be released from (the managing agent contract)."

Against claims that she wanted to have her cake and eat it too, Ms Lim responded: "That's very creative, Mr Singh, but that's not what it is."

On Friday, Mr Singh also accused Ms Lim of not making "full disclosure" of the information she possessed. Had she done so, it would have enabled the other town councillors to make "considered and informed decisions" on matters relating to the managing agent contract, tender process and waiver.

For example, he said, at a meeting that CPG attended, she allowed the impression to form that AHTC would conduct in-house management after it was released.

While Ms Lim replied that the details would not matter to CPG, Mr Singh continued by saying she hid the information, as she did not want questions to be raised on why a tender was not being called.

This was coupled with the fact that Ms Lim, on June 9, was given the power to exercise duties of the town council on its behalf - which she said in her affidavit was critical given the impending departure of CPG, among other issues.

"What you and your elected MPs did was decide... we'd better not tell the others about FMSS; We'll give them the impression that it's going to be in-house, but you will get authority delegated to you, so that you can accept FMSS' proposal without the town council knowing about it. Isn't that what happened?" Mr Singh asked.

Ms Lim replied: "No, I disagree."

"Isn't that what happened, because, as you said, after the 2nd of June meeting with Mr Danny Loh, (FMSS was) asked to go prepare a proposal, (which was) then sent on 22nd of June to you?" He continued. "You signed it under your delegation of authority… You signed it… on the 8th of July, under the cover of darkness."

Again, Ms Lim disagreed: "It's true that I signed the appointment of FMSS under my delegated authority, but I disagree that this delegation was made to hide anything from anyone."

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