Workers' Party MPs cite 'political nature' of town councils in defence against AHTC lawsuit

(L-R) Aljunied MPs Sylvia Lim, Low Thia Khiang and Pritam Singh. PHOTO: Yahoo News Singapore file photo

Three Workers’ Party Members of Parliament cited the “political nature” of town councils in filing a joint defence to the lawsuit against them by the Aljunied-Hougang Town Council (AHTC).

WP secretary-general Low Thia Khiang, party chairman Sylvia Lim and assistant secretary-general Pritam Singh said in a press release on Wednesday (16 August) that they “acted in good faith” as town councillors.

“Our actions had the best interest of the residents of AHTC at heart and sought to ensure that AHTC was able to fulfil all its functions and duties, notwithstanding the difficult circumstances that we were faced with,” they said.

The trio are being taken to court for alleged breach of fiduciary duties in relation to payments of up to $33.7 million to the town council’s former managing agent and service provider, FM Solutions and Services (FMSS).  The suit was filed by AHTC in July under the direction of an independent panel that was tasked to look into the town council’s payments to third parties.

The lawsuit stated that Low and Lim had misled AHTC and failed to justify a waiver of tender and the appointment of FMSS.

“We deny all such allegations,” said the MPs in their statement. They made their arguments in a 40-page statement of defence filed in the High Court. Last month, Low had said that the WP was “prepared to be judged by Singaporeans”.

‘Political nature’ of town councils

Drawing on his experience when he became the Member of Parliament for Hougang in 1991, Low noted that he had been left with the “huge challenge” of managing the constituency on his own. He was served notices less than a month after taking over, informing him that the incumbent managing agent was terminating its contract with the town council.

In light of what had happened in Hougang, Low therefore knew that upon taking over Aljunied GRC, “the continuity of essential services by the existing service providers was at risk”. He also claimed that the ruling People’s Action Party “may attempt to ‘trip up’ the new MPs”, in a similar manner to his experiences in Hougang.

In their joint filing, the trio noted that in 2011, the PAP-appointed managing agent for Aljunied Town Council, CPG, asked to be released from its contract “as soon as practicable”. They added, “CPG would find it untenable to simultaneously represent the only opposition town council and the Prime Minister’s own town council in light of the political nature of town councils.”

At the time, CPG was – and still is – managing Ang Mo Kio Town Council, the ward of Singapore Prime Minister Lee Hsien Loong.  The elected town councillors therefore felt it was “too politically risky to retain a reluctant and unwilling managing agent in CPG, to whom key town management responsibilities were outsourced”.

In addition, there are only three players in the HDB township management market, all of whom manage PAP town councils. It was also pointed out that in the open tender called for AHTC’s managing agent contract in 2012, none of these three companies placed a bid.

An ‘immediate and urgent need’

Furthermore, the town councillors were faced with an “imminent termination” of the Town Council Management System (TCMS), a specialised computing and financing system for town councils developed and paid for by all the PAP town councils. They were notified in early June 2011 that Action Information Management (AIM), which was ‘fully owned’ by PAP and in turn owned the system, intended to terminate the contract by end-July 2011.

Developing a manual system would have been “tedious, time consuming and inefficient”, and developing an equivalent of the TCMS from scratch would have taken 18 to 24 months, said the plaintiffs.

There was therefore an “immediate and urgent need” to appoint a replacement managing agent, in order to avoid disruptions to essential services to residents. Calling a tender would have taken about two months, and the new managing agent would have less than a month to introduce a replacement for TCMS, the three WP leaders argued.

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