Key claims and WP's response

An independent panel has brought a lawsuit on behalf of Aljunied-Hougang Town Council against its town councillors. The allegations in its statement of claim span three broad areas.

Appointing FMSS as managing agent

Workers' Party MPs Sylvia Lim and Low Thia Khiang had allegedly misled or made false representations to other town councillors in order to get FM Solutions and Services (FMSS) appointed as managing agent without a tender, which was against Aljunied- Hougang Town Council's (AHTC) "best interests".

This appointment was made in "bad faith and/or for improper purposes", including to benefit Mr Danny Loh - who died in 2015 - and his wife How Weng Fan, who owned FMSS.

AHTC also alleges that Mr Loh and Ms How did not declare their interest in FMSS to town councillors at a town council meeting in August 2011. Mr Loh and Ms How also "dishonestly assisted" the breaches of fiduciary duty of Ms Lim and Mr Low.

Allowing a flawed system

AHTC alleges that Ms Lim and Mr Low had breached their fiduciary duty as they had set up or allowed a "flawed system of governance", which led to the improper payments to managing agent and service provider FM Solutions and Integrated Services.

As a co-signatory of cheques to FMSS, Ms Lim allegedly failed to conduct proper checks before signing off on the payments.

AHTC has asked Mr Low, Ms Lim, Ms How and FMSS to account for $33.7 million in payments made to FMSS, and seeks "equitable compensation" for any losses suffered from improper payments.

Entering into improper contracts with architectural firm

As members of the town council's tenders and contracts committee, Ms Lim, Mr Pritam Singh, Mr Chua Zhi Hon and Mr Kenneth Foo allegedly breached the Town Council Financial Rules by not calling separate tenders for 10 construction projects. They also picked the more expensive bid for seven of these projects, which cost AHTC an additional $2,794,560.

WP's response

Mr Low, Ms Lim and Mr Singh have rejected all the allegations against them. They said that they acted in good faith and in the best interests of residents.

They added in a statement on Wednesday that they "have not benefited a single cent".

"We are taking legal advice and will contest the lawsuit and lay out our case vigorously in court," the trio said in their statement.

Danson Cheong

A version of this article appeared in the print edition of The Straits Times on July 28, 2017, with the headline 'Key claims and WP's response'. Print Edition | Subscribe