WP leaders did not act in good faith with regard to the $23m paid to a company owned by their friends & associates. Breached the duty of care.

09/11/2022

Sylvia Lim and the WP leaders were fully aware of conflicts of interest but allowed it to persist for 3 years : Appeal court

Amidst the Court of Appeal’s lengthy and comprehensive judgement on the Aljunied-Hougang Town Council (AHTC) case today (Nov 9) is this irrefutable truth: the Workers’ Party’s (WP) leaders were all aware of the manifest conflicts of interest and allowed them to persist for at least three years — from Jul 2011 to Jul 2014.

The judgement written by Chief Justice Sundaresh Menon stated that the WP leaders were aware of this conflict of interest as early as May 19, 2011.

“Yet, this state of affairs was allowed to persist for at least three years – from July 2011 to July 2014 – and in that period of time, AHTC disbursed over $23m under the Contracts. The character of such neglect, in sum, was at least potentially grave.”

The court went on to state that the “conflict must have been even more apparent by Aug 2011”.

That was when AHTC had awarded the first managing agent contract to FMSS, and both WP supporters Ms How Weng Fan and her husband, Mr Danny Loh had assumed key managerial roles in AHTC, while remaining shareholders, directors and employees of FMSS.

Poor financial governance and a breach of the duty of care

CJ Menon noted that the institution of the Standing Instruction that required these payments to FMSS to be co-signed by the Chairman or Vice-Chairman meant that the risk of overpayment or at least improper payments to FMSS was clearly present in the WP leaders’ minds.

“The payments process instituted was woefully inadequate.”

The chief justice noted that during the three years of negligence, AHTC disbursed over S$23 million.

“The character of such neglect, in sum, was at least potentially grave. We are thus unable to see how such conduct that amounted to gross negligence can be said to have been done in good faith.”

The judgement also said that the WP leaders “simply took it on faith” that FMSS was performing the work it was contracted for and paid to do but such a decision does nothing to address the need for a system to verify payments to FMSS.

“In our judgment, this was a paradigm example of poor financial governance and a breach of the duty of care.”

There will also be further court hearings to assess damages the WP leaders may have to pay.

Denial of conflicts of interest

Back in May 2013, PAP MPs had highlighted the possible conflict of interest due to the fact that FMSS was owned by WP supporters.

But then-AHTC chair Ms Sylvia Lim denied any conflict of interest — an answer at odds with the ruling of the Court of Appeal.

Coordinating Chairman of PAP Town Councils Mr Lim Biow Chuan took to Facebook today to urge all town councils to continually examine their processes to see if there are any fault-line.

“I do want to reiterate this: Singaporeans have placed their trust in us to discharge our duties responsibly. Any misdeed would be a breach of the people’s trust in the entire system. And unfortunately, this entire incident has called into question the processes, structures and authorities that are in place to help, protect and serve every resident. If there is a wrong, we have the responsibility to make right.

“I urge all town councils to continually examine their processes to see if there are any fault-line so that we can continue to serve our residents in the best way.”

A sobering reminder

We hope it is clear to Singaporeans that while the Chief Justice ruled that the WP leaders did act in good faith when appointing FMSS as the contractor, this was the only step that was managed without contention. All other parts of the process and business were conducted under highly questionable circumstances. This improper business conduct enabled and allowed manifest conflicts of interest which lasted for at least 3 years.

We appeal to all Singaporeans to review the judgement fully and decide for themselves whether the conduct and business practices by the WP leaders surrounding the FMSS matter were conducted in good faith or not.

For our Party members, this would be a sobering reminder to always put the interests of our residents above Party interests or self interest. We must ensure that our conduct is always beyond doubt or reproach.

We must continue to serve Singaporeans with complete honesty, and remember that integrity is (will always be) the linchpin of our democracy.