SINGAPORE — Newly formed Sengkang Town Council (SKTC) has appointed an independent panel of three eminent lawyers to handle aspects of two lawsuits pertaining to SKTC which were initiated by Aljunied-Hougang Town Council (AHTC) and Pasir Ris-Punggol Town Council (PRPTC).
The trio are Senior Counsels Kenneth Tan and Lok Vi Ming, and law professor Kevin Y L Tan, the town council announced in a Facebook post on Tuesday (8 September).
SKTC was formed after the Workers’ Party (WP) won Sengkang GRC in the Singapore General Election this year (GE2020). The constituency comprises areas from the previous Pasir Ris-Punggol GRC, Punggol East Single-Member Constituency (SMC) and Sengkang West SMC.
The town council is run by WP parliamentarians He Ting Ru, Louis Chua Kheng Wee, Raeesah Khan and Jamus Lim. It is chaired by He.
In its post, SKTC noted that the deadline for handover of all assets and liabilities of PRPTC relating to the areas now in Sengkang GRC is 28 October. This would include court proceedings.
SKTC said the independent panel was appointed on Saturday, and “will at all times act independently and impartially in the best interests of SKTC”.
Its members have agreed not to be paid for their services. But expenses can be reasonably incurred by the panel, particularly in the renumeration of legal advisers and other experts – such as accountants and consultants – and a secretary to the panel if one is required.
“The appointment of the independent panel is in furtherance of the SKTC's previous public statement that it is fully committed to ensuring that all decisions taken in relation to the management of the appeals are fair, transparent and in accordance with the law,” SKTC said.
About the saga
In 2017, an independent panel appointed by AHTC filed a civil lawsuit against several of its elected town councillors, including Low Thia Khiang, Sylvia Lim and Pritam Singh, for breach of fiduciary duties involving some $33 million in improper payments to AHTC’s former managing agent FM Solutions and Services (FMSS) and its service provider FM Solutions and Integrated Services (FMSI).
An independent panel acting on behalf of PRPTC followed suit two months later.
AHTC was first formed after the WP won Hougang SMC and Aljunied GRC in GE2011.
After the opposition party won Punggol East SMC in the January 2013 by-election, the constituency became part of the town council, which then became known as AHPETC.
But after WP lost Punggol East SMC in GE2015, the constituency became part of PRPTC, and AHPETC reverted to AHTC.
Apart from Low, Lim and Singh, AHTC and PRPTC named other defendants in their suits: then-councillors Chua Zhi Hon and Kenneth Foo Seck Guan, along with WP supporter How Weng Fan and FMSS.
FMSS was set up in the wake of WP winning Aljunied GRC in GE2011 and it took over from CPG Facilities Management. How Weng Fan and her late husband Danny Loh Chong Meng were the directors and shareholders of FMSS.
In their law suits, the two town councils claimed a breach of fiduciary duties and improper payments made to FMSS and FMSI between 15 July 2011 and 14 July 2015.
Since 15 July 2015, the WP town council has been run directly by its councillors, instead of having work – such as the hiring of staff to handle estate, finance and administration tasks – outsourced to a managing agent.
Liable for damages
Public hearings began in the High Court on 5 October 2018.
In October 2019, Justice Kannan Ramesh found the defendants liable for damages. He ruled that Lim and Low had breached their fiduciary duties, while Singh had breached his duties of skill and care in the hiring of FMSS.
The town council paid at least $33.7 million to FMSS from July 2011 to July 2015. But the firm was awarded managing agent contracts and essential maintenance services contracts without a tender being called.
According to the WP town councillors, this was due to urgent and very special circumstances which allowed for a waiver for such tenders under the Town Council Financial Rules.
During that period, Lim was chairman of the town council, while Low was the WP secretary-general. Singh, meanwhile, was a member of the town council’s tenders and contracts committee.
But Justice Ramesh said there was no urgency of circumstances to justify the waiver; it was instead a fait accompli.
“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,” said Justice Ramesh in his 329-page judgment.
The High Court has yet to determine the quantum of damages suffered by the town council, and how much it can recover from the MPs.
In November 2019, the defendants filed an appeal against the High Court judge’s findings on liability.
The case is before the Court of Appeal.
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