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SINGAPORE: A court of five judges on Thursday (February 25) questioned lawyers representing the Aljunied Hougang City Council (AHTC) and Sengkang City Council (SKTC) for their arguments describing how the leaders of the Workers’ Party (WP ) had breached the duties owed to the council. and misappropriated S $ 33.7 million of city funds.
The central theme of Thursday’s hearing was how WP leaders waived the call for a tender for a managing agent in 2011, after WP won the Aljunied district and formed AHTC.
Lawyers for the WP leaders argued that they had to end the bidding and appoint the managing agent FM Solutions & Services (FMSS), which was led by Ms How Weng Fan, a longtime colleague of the City Council’s WP Low Thia Khiang of Hougang.
This was due to pressing deadlines and political pressure, as well as an unwilling incumbent managing agent, CPG Facilities Management, which was aligned with the PAP (Popular Action Party) and which Low feared could “sabotage” things.
However, attorneys appointed by independent panels for AHTC and the newly formed SKTC charged that the WP leaders had misled the city council and violated their duties as they did not act in the best interest of the city council by waiving the tender for a managing agent. As a result, improper payments were made to FMSS, and FMSS received the money and confirmed that the works had been completed.
READ: AHTC Lawsuit: Managing Agent ‘Enjoyed’ 300% Increase in Profits As City Hall Finances Suffered, Lawyers Say
The right thing to do was for them to call for bids and keep CPG on their existing contract, which was still valid for two more years in the meantime, they said.
APPEALANTS ARGUING AGAINST A RESPONSIBLE VERDICT APPROVED IN 2019
WP boss Pritam Singh, Aljunied GRC MP Sylvia Lim, and former WP Secretary General Low Thia Khiang were held liable in October 2019 for failing to fulfill different types of duties in handling around S $ 33 million in city council funds.
LEE: The Parliamentarians of the Workers’ Party declared responsible in the multimillionaire case of AHTC; The trial raises “serious doubts” about his integrity.
Other appellants in the lawsuits are then-AHTC councilors Chua Zhi Hon and Kenneth Foo Seck Guan, along with managing agent FMSS and its director, Ms. How, who is also acting as her late husband Danny Loh.
However, the eight parties went to court to appeal against the higher court’s decision that they were responsible for various offenses, and held that Judge Kannan Ramesh had erred in law and fact in his decision.
Judge Ramesh had found that Ms. Lim and Mr. Low breached their fiduciary duties by appointing FMSS as AHTC’s managing agent, while Mr. Singh failed to fulfill his “duties of skill and care.”
The FMSS was run by parties with conflicting interests: Ms. How, who is said to have been an opposition supporter and colleague of Mr. Low for more than two decades, and her late husband, Mr. Loh.
The managing agent was appointed without a tender being called, and this led to millions of improper payments made by the city to FMSS, AHTC’s lawyers charged.
READ: AHTC Lawsuit: Sylvia Lim Admits To Violating City Council Financial Rules By Not Calling For Bids
An independent AHTC-appointed panel initiated the lawsuit against the WP leaders and AHTC councilors, who were tried in 2018 for breaching duties owed to AHTC and the Pasir Ris-Punggol City Council (PRPTC) between 2011 and 2015.
Different groups of lawyers acted on behalf of the defendants, as well as the plaintiffs: AHTC and the Pasir Ris-Punggol City Council.
After WP won the new Sengkang GRC district in the 2020 general election, the Sengkang City Council appointed an independent panel to handle judicial matters related to the Pasir Ris-Punggol area that became part of the Sengkang GRC, with a new group of lawyers led by Ms. Marina Chin.
THE JUDGES HAVE DIFFICULTY WITH ARGUMENTS FROM BOTH SIDES
On Thursday, the five-judge court, made up of Chief Justice Sundaresh Menon and Justices Andrew Phang, Judith Prakash, Woo Bih Li and Tay Yong Kwang, struggled with arguments from both sides. They questioned attorney Chelva Retnam Rajah, who represented Mr. Low and his colleagues, what evidence the leaders had that they formally considered the issue of a resignation.
The lawyer said that his clients had made their decisions in good faith, referring to an indemnification clause in the Municipalities Law that protects councilors from any legal proceedings for acts carried out in good faith.
READ: AHTC trial: Defendants acted ‘in good faith’ at all times, lawyers say in final submissions
The judges questioned attorney David Chan, who was representing AHTC, as to why CPG was not called to the stand during the trial, noting that there was no evidence that they may have wanted to continue acting as managing agent for the opposition-led city hall.
Chief Justice Menon said Chan’s arguments “raise the question of whether we are barking up an imaginary tree” as he was “looking for evidence to show something went wrong” without actually showing what everyone else is doing. town halls to have a comparison.
After he said there was no evidence to show that money was being paid to FMSS for services that were not provided, Judge Prakash added that there were thousands of people living in areas controlled by AHTC. He said that if something was wrong, people would have made noise.
“Singaporeans are not calm. They know how to complain. They complain to the city council, they complain to the deputies, they write to the newspapers,” he said.
In addition, Judge Phang asked if it was possible that there were discrepancies on the part of the managing agents of other municipalities.
“Is it possible that the system is like this and errors occur? In other words, don’t all errors have a sinister source?”
However, he added that “it is sinister to the extent that KPMG identifies conflicts of interest,” referring to an audit report on which the claims against the WP leaders were based.
“Their biggest case, actually, is that they basically didn’t hire competent (people), even though they knew them … they didn’t do a good job,” Judge Phang told Mr. Chan. “But what do you mean that if another managing agent had been appointed, these mistakes would not have occurred? We don’t know. We don’t want to speculate improperly. Lack of competition is one thing. Errors are one thing, but to say that rises to a level of breach of fiduciary duty, it is necessary to establish a … connection. “
Mr. Chan responded that the failure to request an exemption from a bidding process led to the appointment of FMSS and launched a process that created an inherent risk with the disputants in charge of payments. He added that there were other managing agents who had expressed interest in helping run the city council, but acknowledged when questioned that he did not have the names of these agents and did not know who they were.
THERE IS NO PROOF THAT CPG WANTS TO STAY: JUSTICE CHIEF
The Chief Justice said he was sympathetic to the way the new city council did not want to sue CPG to order them to stay with the city council, if CPG wanted to withdraw.
“For the love of God, you are running a city hall, I don’t think you want to start this way,” he said. “The pudding proof is: a year later, when (AHTC) called for bids, no one else offered.”
The court heard during the trial that no one accepted the tender in 2012, when AHTC launched a tender for a managing agent as the existing FMSS contract was drawing to a close.
“Mr. Chan, CPG didn’t even give evidence,” Menon said. “They did not even come to say that they were interested in doing this work. In fact, at the meeting on May 9 (2011), they already hinted that they did not want to continue.”
“Mr. Low is a seasoned politician. He obviously came in with a high degree of skepticism that CPG wanted to do the job, and CPG did what he hoped. But it’s artificial to say that they should have come in expecting CPG to want to stay, because they never hinted at the desire to stay, they were not even called as witnesses.
“So if the incumbent is not going to do the job, who else is going to do it? And you have this pending deadline. I couldn’t find a single document that suggested CPG was going to continue.”
At this, Mr. Chan was silent for some time. He later argued that if the appellants had called a tender, it would have “put the spotlight on the FMSS property.”
WHATEVER YOUR POLITICAL PERSUASION, YOU HAVE TO PLAY BY THE RULES – SKTC ATTORNEY
Attorney Marina Chin, who was introduced to SKTC for the first time and will take over as lead legal counsel Davinder Singh, who previously represented PRPTC, said it was “not wrong in himself” that Low had various concerns about CPG.
“For Mr. Low … having concerns about CPG’s perceived affiliation with PAP, that’s not bad in itself,” he said.
“He may also have a preference for particular contractors that he may consider to be aligned with his political persuasion. Not bad in himself. But whatever his political persuasion, he must work within the rules … and by the rules. In fact, he is elected to follow those rules. Those rules apply to the entire political spectrum, regardless of which political party he comes from. “
He noted that despite alleged concerns CPG had, he remained on board with the City Council for various projects. The city council could also have made CPG honor their contract and put out a tender in the meantime, releasing them only after they landed a new agent.
Judge Phang replied that this was “fine in theory” but asked if it was realistic. He gave an analogy: “If I have a candidate for the academy and I know him. Am I going to say that I cannot consider the candidate at all? … This is human nature.”
The judges reserved their decision for a later date. If they allow the appeal in full, the lawsuit against the WP leaders and other parties will be dismissed. If the appeal is dismissed, a second leg of the trial will begin at a later date to assess the damages that the defendants will have to pay to AHTC.
If the defendants cannot pay the damages, AHTC could initiate bankruptcy proceedings against them and the WP MPs could lose their parliamentary seats.
According to the Singapore Constitution, an unreleased contestant cannot be a member of Parliament and will not be allowed to participate in any parliamentary election.
The WP MPs involved in the lawsuit successfully raised $ 1 million for a few days in October 2018 after asking the public for help with legal fees.
