SINGAPORE - A high-profile trial against three Workers' Party MPs began on Friday (Oct 5).

WP secretary-general Pritam Singh, chairman Sylvia Lim and former chief Low Thia Khiang arrived at the Supreme Court at about 9.45am.

WP MPs Leon Perera, Dennis Tan, Muhamad Faisal Abdul Manap and Png Eng Huat were spotted in the public gallery.

The Aljunied-Hougang Town Council (AHTC) is suing Mr Singh, Ms Lim and Mr Low, plus two of its town councillors, over $33.7 million in payments the town council made from July 15, 2011, to July 14, 2015.

The lawsuit, initiated by AHTC under the direction of an independent panel, alleges that the payments to its former managing agent and service provider were improper and void, as the three Aljunied GRC MPs had acted in breach of their fiduciary duties.

Mr Low and Ms Lim have been asked to account for the sum and to repay any money paid out wrongfully. Also named in that suit are the former managing agent FM Solutions and Services (FMSS), and the firm's owner, Ms How Weng Fan.

The suit also claims Ms Lim, Mr Singh and town councillors Chua Zhi Hon and Kenneth Foo had breached the Town Councils Financial Rules by failing to call a tender for each project and not accepting the lowest bid for seven projects - thereby costing AHTC an extra $2,794,560.

The defendants also face a suit from the Pasir Ris-Punggol Town Council (PRPTC), which manages the affairs of single-seat Punggol East.

The WP had managed Punggol East from 2013 to 2015 after winning the constituency in a by-election. But in the 2015 general election, the constituency came under the control of the People's Action Party again.

PRPTC alleges the decisions made by the town councillors had caused it to suffer "loss and damage", and is claiming equitable compensation.

The case is the latest turn in an ongoing saga that goes back to 2011.

AHTC had been unable to submit an unqualified set of accounts since the opposition party formed the town council in 2011, after winning Aljunied GRC in the general election that year.

The state of affairs eventually led to a special audit by the Auditor-General's Office, which found significant lapses of governance at the town council.

The town council was then directed by the Court of Appeal to appoint a Big Four accounting firm to help fix its lapses and ensure compliance with the law. It eventually appointed independent auditor KPMG in 2016 to look into its books.

Following an audit, KPMG found the governance failures at AHTC had put public funds running into millions of dollars at risk of improper use.

The town council then appointed an independent panel to look into the improper payments and take follow-up action, including recovering the money. The panel comprises senior counsel Philip Jeyaretnam, senior counsel N. Sreenivasan and KPMG managing partner Ong Pang Thye.

Observers are watching the suit closely for the legal and political implications the verdict may have.

In what some have called a "landmark case", the courts will have to rule on whether town councillors owe a fiduciary duty to their town councils because such a relationship between town councillors and town councils is not spelt out in the Town Councils Act.

If the defendants are found liable, they have to compensate AHTC.

If they cannot pay up, they risk being declared bankrupt and having their assets seized. MPs who are made bankrupt will also lose their parliamentary seats.

The trial is likely to see KPMG's forensics partner Owen Hawkes and PwC partner Goh Thien Phong take the stand first.

Both men belong to firms tasked to examine AHTC's accounts.

The WP MPs and town councillors are represented by Tan Rajah & Cheah, with Mr Chelva Retnam Rajah as lead counsel.

The independent AHTC panel is represented by a team from Shook Lin & Bok led by lawyer David Chan, while PRPTC is represented by Drew & Napier, and FMSS is represented by Netto & Magin.