Main purpose of AHTC lawsuit to account for S$33m: Experts

File photo of Aljunied-Hougang Town. (Photo: TODAY)

SINGAPORE: The main purpose of a lawsuit against some of Aljunied-Hougang Town Council's (AHTC) members is to make them account for S$33 million in payments made to its former managing agent, according to legal experts.

The suit, filed by an independent panel appointed by AHTC, alleges that three Workers' Party (WP) MPs – party chief Low Thia Khiang, Ms Sylvia Lim and Mr Pritam Singh – breached their fiduciary duties in appointing FM Solutions and Services (FMSS) as the town council's managing agent and in allowing "improper" payments. 

Mr Low is an elected member of the town council, Ms Lim is the vice-chairman and Mr Singh is chairman.

The three MPs have rejected the allegations and said that they see the lawsuit as an opportunity to explain to the court and the public why they made the decisions they did.

"NO EXPLICIT ALLEGATION" OF CRIMINAL ACTS: LAWYER

Criminal lawyer Adrian Wee said that the statement of claim for the suit made it clear that AHTC was seeking recovery of any damages from the three defendants in their personal capacities. The matter could take about 18 months to resolve if it proceeds to trial, he added.

Channel NewsAsia understands that if the MPs and other parties named in the suit – WP members Chua Zhi Hon and Kenneth Foo, FMSS and FMSS owner How Weng Fan – are able to account for the S$33 million through estate works such as the painting and maintenance of housing blocks, no further action may be taken.

In explaining the possible outcomes of the lawsuit, Mr Wee said that if the court finds that if some of the allegations can be proven against the defendants, it will determine the appropriate remedies.

“The court will then proceed to determine, if applicable, the appropriate quantum. For example, monetary damages," he said.

The lawyer noted there had been "no explicit allegation" of criminal acts in the statement of claim.

"However, it should be noted that the town council is asking for an account of profits from, among others, Sylvia Lim and Low Thia Khiang, even though there does not appear to be any allegation that they personally received any profits as a result of the various acts complained of."

The independent panel, chaired by senior counsel Philip Jeyaretnam, was appointed earlier this year to give recommendations on what AHTC needed to do following audit findings that it had made large sums of improper payments.

CASE REINFORCES PROPER MANAGEMENT OF PUBLIC FUNDS

National University of Singapore (NUS) Business School director for the Centre for Governance, Institutions and Organisations Lawrence Loh said the lawsuit was "in line with the pursuit of good governance among the town councils in Singapore".

"With the long series of actions and checks over the many years in this case, the current step brings the process closer to a point of resolution and ratification. The legal test, whatever the outcome, is appropriately a transparent means to reinforce proper management of public funds and strengthen political accountability," the associate professor said.

NUS associate professor of accounting Mak Yuen Teen also noted that it was "rare but possible for a board or council to sue some of its own board members".

"The town council must have discussed this and decided, with those accused recusing. I assume the council made this decision based on legal advice. They might also have felt some pressure to ensure accountability and to discharge their own duties to the town council," he said.

However, Assoc Prof Mak added, as long as the three accused "acted in good faith in the best interest of the town council and exercised reasonable diligence", they would not have breached their fiduciary duties.

"Making bad decisions does not mean that they have breached their duties."

Additional reporting by Olivia Siong and Kenneth Lim. 

Source: CNA/mz