When Workers' Party (WP) chairman Sylvia Lim and then chief Low Thia Khiang were elected MPs for Aljunied GRC in 2011, the existing managing agent of the Aljunied Town Council - CPG Facilities Management - still had two more years left on its contract.
But Ms Lim and Mr Low decided to appoint a newly set-up company to manage town council affairs for both Aljunied GRC and Hougang SMC.
The new managing agent, FM Solutions & Services (FMSS), was started by the late Mr Danny Loh Chong Meng and his wife, Ms How Weng Fan, who then became secretary and general manager of the Aljunied-Hougang Town Council (AHTC) respectively.
The circumstances in which FMSS was appointed came under scrutiny on the first day of a multi-million-dollar case against three WP MPs - including current chief Pritam Singh - and two town councillors yesterday.
The case involves over $33.7 million paid by the town council from July 15, 2011 to July 14, 2015 to FMSS and service provider FM Solutions and Integrated Services (FMSI), which Mr Low and Ms Lim have been asked to account for and to repay any money paid out wrongfully.
The lawsuit, which has been initiated by Aljunied-Hougang Town Council (AHTC) under the direction of an independent panel, alleges that the payments to FMSS and FMSI were improper and void.
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 Pasir Ris-Punggol Town Council (PRPTC) is also suing to recover Punggol East's share of losses arising from the alleged improper payments.
The court heard yesterday that the decision to appoint FMSS was made in the weeks following the May 7 General Election in 2011, as seen in e-mails between the parties, including Mr Low, Ms Lim and Ms How.
FMSS was then set up on May 15, 2011, and in June, a letter of intent was endorsed. Soon after, on Aug 1, FMSS took over the running of AHTC, the same day CPG's services were discharged.
AHTC's lawyer, Shook Lin & Bok's Mr David Chan, highlighted an e-mail sent by Ms How to Mr Jeffrey Chua, Aljunied Town Council's (ATC) general manager, on May 13, 2011, two days before FMSS was founded.
In it, Ms How, the secretary of Hougang Town Council - before it was merged with ATC - asked Mr Chua for details of ATC staff, so as to facilitate a smooth handover.
Mr Chan said it "was clear" that there were plans for Ms How and her new company to take over the ATC.
No tender was called to appoint FMSS. The PRPTC's lawyer, Senior Counsel Davinder Singh, said there was "more than ample time" to conduct a tender, and CPG could have been asked to stay on for a few more months.
But Senior Counsel Chelva Rajah, who is representing the WP MPs and town councillors, countered that there was "latitude" for a town council chairman, like Ms Lim, to waive the requirement to call a tender altogether.
He cited a speech by then National Development Minister Khaw Boon Wan, which was made in Parliament in May 2013, to back this.
Reading Mr Low's affidavit in court, Mr Rajah said the WP veteran faced challenges when he became Hougang MP in 1991, such as finding a new office at short notice.
In the mid-90s, the Housing Board also terminated its Essential Maintenance Service Unit contract and computer services for Hougang Town Council, leaving Mr Low to find replacements.
Based on this, the WP MPs were prepared that the current managing agent, CPG, which was contracted by the People's Action Party, would not want to continue serving the town council.
In fact, it was CPG's Mr Chua who told the AHTC during a meeting in May 2011, that it did not want to continue, said Mr Rajah.
"In the following days after this meeting, Mr Chua informed us that the reason for CPG not wishing to continue was that CPG also served as managing agent for Ang Mo Kio Town Council, which was helmed by the Prime Minister," Mr Rajah said, citing Ms Lim's affidavit.
"As such, it would be bad for CPG's business to be serving PAP town councils as well as a town council run by an opposition party," Mr Rajah continued.
In the case of the second managing agent contract given to FMSS in 2012, Mr Rajah said a tender had been called and only FMSS put in a bid.
Before awarding FMSS, Ms Lim had engaged Kelly Services, an HR company, to check if the salaries and job descriptions of FMSS staff were in line with market rates.
An audit firm, RSM Ethos, was also hired to examine the tender process and evaluation process.
The other defendants in the suit are town councillors Kenneth Foo Seck Guan and Chua Zhi Hon, FMSS and Ms How, who is also representing her late husband.