The Housing Board has asked the Attorney-General's Chambers for advice on the lawsuit that the Aljunied- Hougang Town Council (AHTC) has filed against its town councillors.
In a statement yesterday, HDB said it has received notice about the claim brought by an independent panel appointed by AHTC to help recover improper past payments.
HDB said it is studying the claim, and noted that the claim document sets out allegations of breaches of fiduciary duties and improper payments of town council funds, among other things.
AHTC has alleged that all payments it made to its then managing agent, FM Solutions and Services (FMSS), and service provider, FM Solutions and Integrated Services (FMSI), are null and void as its town councillors had acted in breach of their fiduciary duties.
It is demanding that Workers' Party (WP) chief Low Thia Khiang; town council vice-chairman Sylvia Lim; Ms How Weng Fan, owner of FMSS; and FMSS give an account of $33,717,535 in payments made to FMSS and FMSI from July 15, 2011, to July 14, 2015. If any sum has been wrongfully paid out, AHTC wants "equitable compensation" for it.
In its statement, HDB said the claim document contains "serious allegations of misconduct by various defendants".
Mr Low, Ms Lim and town council chairman Pritam Singh yesterday rejected the allegations that they acted in breach of their fiduciary duties. In a statement, the WP MPs said they acted in good faith and in the best interests of residents, and would contest the lawsuit.
Citing the document, HDB said: "Ms Sylvia Lim and Mr Low Thia Khiang misled the town council and gave false or inadequate reasons to justify a waiver of tender and secure FMSS' appointment as managing agent."
It also highlighted how the claim said the appointments of FMSS and FMSI were made "in bad faith" for improper purposes, and were "so unreasonable" that no reasonable town councillor would have made the same decision.
HDB noted that the independent panel is asking the court to rescind the contracts with FMSS and FMSI, and is seeking compensation for monies wrongfully paid out.
This is to be taken as the entire sum of $33,717,535, subject to Ms Lim, Mr Low, FMSS, FMSI or Ms How showing which payments were lawful, it said.