Workers' Party (WP) leaders Low Thia Khiang and Sylvia Lim had put their own political interests over that of the Aljunied-Hougang Town Council (AHTC) and residents in the way they handled the appointment of a managing agent, a High Court judge said yesterday.
This was shown in the great lengths they went to in order to keep others in the dark when planning for FM Solutions & Services (FMSS) to take over as agent without a tender being called in 2011, said Justice Kannan Ramesh.
Later, the two Aljunied GRC MPs asked the owners of FMSS to prepare a "sanitised" report on its appointment for a meeting with other town councillors, painting a misleading narrative of why a tender was waived.
This story was repeated in a release sent out to the press, Justice Ramesh said in a much-anticipated judgment released yesterday.
"It is particularly unsatisfactory that this misleading narrative was conveyed to the public, and specifically the very constituents that the elected MPs were elected to serve," he said.
The machinations of Ms Lim and Mr Low showed that they wanted to camouflage the true reasons for not calling a tender, said the judge.
Describing what they did as "in-excusable" and "egregious", Justice Ramesh said: "Not only was there no real urgency or necessity in the public interest to waive tender, it would appear that the waiver was really motivated by extraneous considerations, including politics and a misguided sense of loyalty."
He said he was not suggesting that Mr Low and Ms Lim were expected to have no regard to any political considerations in making their decisions, which would be unrealistic. "However, they were expected to not subordinate the interests of AHTC, not to mention their statutory and fiduciary duties, to their own political interests."
Ms Lim, chairman of the opposition party, was then chairman of the town council, while Mr Low was secretary-general of the WP.
Justice Ramesh said there was no evidence showing that Mr Pritam Singh, the current secretary-general of the party, knew of his fellow MPs' plans. He was also not involved in the most damning e-mail exchanges.
But he said Mr Singh had breached his duty of skill and care in the same matter.
He said Mr Singh did not question the waiver of the tender although he had been copied on some of the key e-mail messages discussing the matter and was privy to the information.
FMSS is said to have received some $33.7 million in improper payments from the town council from July 2011 to July 2015. The three MPs are now liable for part of the amount. In a statement, they said they are reviewing the judgment and will share details in due course.
The Housing Board said that "as public monies are involved, AHTC should take the appropriate steps to recover the monies misused".
Pending the MPs' appeal, the case will move on to a second round of hearings to assess and determine the quantum of damages suffered by the town council, and how much it can recover from the MPs.
The judgment brings to a close the first round of the trial first heard in October last year. The case centres on the hiring of FMSS after the 2011 General Election, when the WP won Aljunied GRC from the ruling People's Action Party, and retained the Hougang single ward.
In 2014, the Government directed the Auditor-General's Office (AGO) to audit AHTC's accounts after the town council's own auditor raised more than a dozen issues of concern. The AGO flagged major lapses in governance and compliance, including FMSS' co-owners being staff of the town council.
The civil suit was initiated in 2017 under the direction of an independent panel set up by the town council to recover improper payments.
• Additional reporting by Linette Lai and Rei Kurohi