AHTC asks independent panel about legal fees incurred in lawsuit against WP leaders

The Aljunied-Hougang Town Council (AHTC) has asked its independent panel for a detailed account of the legal fees incurred in the lawsuit that the panel initiated against Workers’ Party leaders and town councillors in 2017.

In a statement on July 26, AHTC said the panel acts independently of its MPs, town councillors and management, “including taking decisions to initiate and pursue litigation, engage in mediation, and consent to the terms of the settlement”.

AHTC MPs, town councillors and management were not consulted on any of these actions from the outset, the town council added.

Its statement comes two days after WP secretary-general Pritam Singh, party chairman Sylvia Lim, former party chief Low Thia Khiang and town councillors Kenneth Foo and Chua Zhi Hon announced in a joint statement that they had settled a lawsuit brought against them by AHTC and Sengkang Town Council (STC).

AHTC – through the independent panel – had taken the five WP leaders and town councillors to court in 2017 over $33.7 million in improper payments made by the town council to its one-time managing agent FM Solutions & Services (FMSS). The town council had also sued FMSS.

The case has wound its way through the courts since then, with the Court of Appeal finding in a November 2022 judgment that the WP leaders and town councillors do not owe AHTC fiduciary duties and had acted in good faith in hiring FMSS.

But the apex court also found that the town councillors were negligent in allowing conflicts of interest to persist at AHTC, and were thus liable for some of the damages.

The court further ruled in November 2023 that Mr Singh, Ms Lim and Mr Low would be able to recover some legal fees from AHTC and STC as they had succeeded substantially in their appeals.

The case was to have gone into a second phase to determine the quantum of damages owed to the town councils.

On July 24, the WP leaders and town councillors issued a joint statement together with AHTC and STC announcing that they had reached a settlement in the lawsuit.

Under this “drop hands” settlement, AHTC and STC dropped their claims for damages and costs against Mr Singh, Ms Lim, Mr Low, Mr Foo and Mr Chua. Likewise, the five dropped their claims for costs against the town councils.

The Straits Times understands that FMSS has also reached a settlement with the town councils.

Asked about the latest development in the case, AHTC told ST on July 25 that it had not received any advice from the independent panel or its lawyers, Shook Lin & Bok, on the outcome of the mediation.

“Neither was AHTC consulted or given any advice in the run-up to the mediation,” it said in response to queries.

The independent panel had been appointed by AHTC after an audit by KPMG in 2016 found “serious flaws” in the town council’s governance, highlighting improper payments of $33.7 million made to FMSS between 2011 and 2015.

When it was formed in 2016, the panel consisted of Senior Counsel Philip Jeyaretnam, Senior Counsel N. Sreenivasan and Mr Ong Pang Thye.

Mr Ong remains on the panel, while the other two members have been replaced by Senior Counsel Tan Kok Quan and Ms Eng Chin Chin.

In its July 26 statement, AHTC said the panel’s terms of reference “establish it as a separate body from AHTC”.

Based on these terms, the panel is empowered to initiate, settle, withdraw and file appeals for all legal suits, actions and proceedings, including mediation, related to the matters addressed in KPMG’s report, said AHTC.

AHTC also highlighted that the terms of reference state that panel members should not take any direction or instruction from others, including any officer of AHTC and HDB, and that they are expected to act in the best interests of AHTC, and remain independent and impartial at all times.

The lawsuit filed in 2017 had to do with the propriety of the town council’s dealings with its then managing agent, FMSS, which was set up in 2011 by two WP supporters – Ms How Weng Fan and her now-deceased husband, Mr Danny Loh – after the WP team won Aljunied GRC at that year’s general election.

FMSS was appointed as AHTC’s managing agent without a tender, and Ms How was later appointed deputy secretary and general manager of AHTC and her husband the town council’s secretary.

The Pasir Ris-Punggol Town Council (PRPTC) got involved as the former Punggol East SMC swung back to the People’s Action Party in the 2015 General Election, and came under PRPTC’s management. The WP had won the seat in a 2013 by-election, and managed the ward under the reconstituted Aljunied-Hougang-Punggol East Town Council for two years.

PRPTC initiated its civil suit, parallel to AHTC’s lawsuit, to recover losses incurred by Punggol East when the constituency was managed by the WP.

STC inherited the case from PRPTC after Punggol East was subsumed into Sengkang GRC in 2020. The WP won Sengkang GRC in the 2020 General Election. 

The settlement brings the case to a close after seven years.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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