Workers’ Party leaders, AHTC and STC settle long-running lawsuits, drop claims after mediation
Source: Straits Times
Article Date: 25 Jul 2024
Author: Ng Wei Kai
Town councils drop claims for damages and costs; WP leaders also drop claims for costs.
Parties to the long-running case involving the Workers’ Party-run Aljunied-Hougang Town Council (AHTC) have agreed to an out-of-court settlement with each other.
AHTC and Sengkang Town Council (STC), which filed civil suits on the basis that the leaders of the WP had breached their duties as town councillors, dropped their claims for damages and costs following mediation.
Likewise, the WP leaders also dropped their claims for costs against AHTC and STC, the parties involved said in a joint statement on July 24.
The WP leaders are party secretary-general Pritam Singh, chairwoman Sylvia Lim, deputy organising secretary Kenneth Foo, former WP chief Low Thia Khiang and Mr Chua Zhi Hon – all of whom were AHTC town councillors when auditors found lapses in the town council’s governance and compliance.
Mr Singh, who is Leader of the Opposition, and Ms Lim are sitting MPs for Aljunied GRC, and remain AHTC town councillors.
The settlement comes seven years after the lawsuits were filed in 2017 over the propriety of the WP-run town council’s dealings with its former managing agent FM Solutions & Services (FMSS), with allegations that some $33.7 million in improper payments had been made to FMSS and its subsidiary.
In November 2022 and July 2023, the Court of Appeal dismissed the majority of claims made by AHTC and STC against the town councillors. But the apex court found that senior WP leaders were liable for damages to AHTC and STC as they had been negligent in certain respects.
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 July 24 statement by AHTC, STC and the WP leaders means that parties have agreed to bear their own legal costs, and that the town councils will not pursue the damages they are owed by WP leaders.
This means that the amount of damages has not been, and will not be, ascertained.
The dispute can be traced back to 2011, when a WP team won Aljunied GRC at that year’s general election. Shortly after, FMSS was set up by two WP supporters – Ms How Weng Fan and her now-deceased husband, Mr Danny Loh – and the company was then appointed as AHTC’s managing agent.
Ms How was later appointed deputy secretary and general manager of AHTC and her husband the town council’s secretary, while staying FMSS shareholders and directors.
In 2015, the Auditor-General’s Office flagged major lapses in governance and compliance at AHTC regarding its dealings with FMSS.
KPMG was appointed as an independent auditor in 2016, and found “serious flaws” in the town council’s governance, highlighting improper payments of $33.7 million to FMSS between 2011 and 2015.
An independent panel appointed by AHTC then reviewed the report, and in 2017, AHTC and Pasir Ris-Punggol Town Council (PRPTC), filed lawsuits against the WP town councillors for breaching their fiduciary duties.
PRPTC was 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 GE2020.
The Straits Times has contacted the WP and AHTC for comment on whether the settlement will end the seven-year-long lawsuit.
Source: Straits Times © SPH Media Limited. Permission required for reproduction.
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