Senior Counsel Davinder Singh charged that former Aljunied-Hougang Town Council (AHTC) chairwoman Sylvia Lim did not perform her due diligence when agreeing to FM Solutions & Services' (FMSS) proposal to take over the management of AHTC.

The afternoon of the 11th day of the AHTC trial on Oct. 19 saw Davinder continue pressing Lim on the underlying factors that led to the decision to hire FMSS after the 2011 General Election.

Lim disagreed with each of Davinder's allegations, stating that time was a crucial factor to her decisions, that she had been delegated the authority to do so, and that in any case, there was nothing to hide.

"Reckless" to agree to FMSS proposal to manage Hougang and Aljunied

Davinder said it was “reckless” to agree to FMSS proposal to manage Hougang and Aljunied.

This was in response to Lim's detailing of a proposal made by FMSS that was shown by FMSS shareholder Danny Loh to Lim, former Workers' Party (WP) Secretary-General Low Thia Khiang and WP Member-of-Parliament Muhamad Faisal Manap at meeting on June 2, 2011.

According to Lim, the two key points of the proposal was that first, FMSS would charge the cost of the Hougang staff as they were already being incurred by the WP at that time, and second, FMSS would take over management of the town council from CPG Facilities Management at CPG's existing rates.

When Davinder asked Lim if she had seen the contract with CPG by that meeting, Lim said she hadn't.

Davinder then elaborated on his "reckless" charge, questioning why Lim still went ahead with FMSS anyway.

This was despite Lim knowing that FMSS was a "newbie", and that she was not familiar with the specifics, such as costs and number of staff regarding CPG, and that she did not know FMSS's own cost-structure.

Lim's reply was that she found the FMSS proposal for Aljunied to keep the costs the same good.

Davinder then formulated his subsequent line of argument that as the money incurred for FMSS costs was not Lim's own money, it had not crossed her mind to negotiate for a better deal.

Lim responded by stating that it was only for a "critical period" of one year and that as of June 2011, time was of the essence.

When Davinder asked what stopped Lim from having the luxury of time to negotiate for a better deal, Lim replied that it was due to CPG stating that they wanted to be released.

The WP town council then took it that CPG was not committed to their cause.

Said Lim:

"Too risky, Mr Singh."

Wanted to protect the Hougang staff

Davinder then turned next to the date of June 15, 2011, questioning why such a proposal was made to set that date for the takeover of the Hougang town council by FMSS.

And why could it not be done at the same time as the takeover of Aljunied town council, which was was slated for July 15, 2011?

Lim's reply was that it was for FMSS to stabilise their operations and organisation ahead of the larger takeover of Aljunied town council.

Davinder asked how this was supposed to work given that Hougang already had staff running the town council.

Lim clarified by stating that FMSS needed to recruit new staff to manage the larger town of Aljunied.

On top of that, some Hougang staff would be shifted to Aljunied which meant new staff had to be brought in.

Davinder's response was to question how the move made sense given that by June, the town councils of Aljunied and Hougang had already merged into AHTC.

Lim highlighted that it was already June 2 when the proposal by FMSS was first made and that preparation works had to be started for the whole operation. Hence, the selection of June 15 as a "sensible" first date.

This elicited Davinder's suggestion that Lim's choice of such a date was because Lim was content with anything that FMSS said and that she didn't apply her mind to pricing, dates or logic.

When Lim responded that the cost was effectively the same, Davinder restated that Lim and the other elected WP members wanted to make sure the Hougang staff would not be asked to go by CPG who was managing Aljunied Town Council.

Lim replied:

"That's fiction, Mr Singh."

Hiding the FMSS proposal from non-elected members of the town council

Noting that the proposal had only been circulated by the elected WP members of the town council, Davinder asked Lim on why this was the case, given that the proposal was such a major issue.

Lim said that the elected members had to discuss this first.

When Davinder then asked if the elected members had anything to hide from the other town councillors or from CPG on the first meeting of the WP Aljunied-Hougang town council on June 9, 2011, Lim stressed that there was nothing to hide.

Moreover, CPG would not be interested in the proposal at all as Lim felt these were details that did not concern CPG.

This saw Davinder repeat his initial question on the lack of circulation to the none-elected members of the town council.

Lim stated that on hindsight, she could have but as she had already been delegated authority as Chairwoman to make decisions accordingly, she proceeded from there.

This answer resulted in Davinder repeating his question several times, with the added statement that Lim had a duty to do so in circulating the proposal to the other town council members.

Lim stuck to her answer of having been delegated authority, stating that as the meeting on June 9 came up, she took her authority and went ahead with it.

This drew a response from Davinder:

"You did the dirty on your own town council."

To which Lim said:

"I disagree, Mr Singh. I disagree totally."

Giving FMSS a "blank cheque" on hiring

Turning next to the hiring of staff by FMSS, Davinder queried Lim if she knew the number of new staff that FMSS intended to hire.

Lim said that she did not know but she knew the nature of the staff.

Suggesting that Lim was giving FMSS a "blank cheque" on hiring, Davinder questioned further if a numerical limit had been imposed.

Lim doubled down on her answer, arguing that while it was left up to the discretion of FMSS, there was a limit in the form of a time period which extended only up to July 15, 2011, the stipulated date for the takeover of Aljunied Town Council by FMSS.

On top of that, an additional measure had also been imposed in the form of a need to show a justification of payment made within that time period.

Repeating that it was necessary to give FMSS some discretion, Lim reiterated that such actions were the practical solution for the time and that she had acted responsibly.

This resulted in Davinder re-phrasing his question to ask if Lim was stating, on oath, that it was a responsible thing for a town council to give a managing agent discretion to hire without limit.

Lim replied yes, as there was no way for them to fix the number.

Changing his approach, Davinder brought up an analogy of a gardener who had been given month to hire as many people as he likes as, asking if Lim would agree to pay for the costs of all of the new staff, regardless of their experience, were she the owner.

Lim replied no and rejected the analogy, pointing out that in the case of the gardener, there would be no need to hire people before taking on the contract, whereas in the case of the managing agent, it was only reasonable to hire people beforehand.

Davinder then suggested to Lim that the difference was that in the example of the garden, it was a case of Lim's own money whereas the second instance involved AHTC money.

Hence, Lim's giving of carte blanche to FMSS to hire as many as they wanted during this period.

Again, Lim repeated:

"I disagree with you."

Lack of controls

Davinder referred to an invoice from FMSS on June 30, 2011. AHTC was charged for the following:

• Provision of managing agent services for Hougang, about S$92,000 less CPF contributions.
• Staff costs, about S$23,000.

This invoice was paid on July 21, 2011. It was stamped with an old chop, and signed by three people:

• How Weng Fan
• Yeo Soon Fei
• Chng Jong Ling

Davinder said that at the date of the invoice, all three were working for FMSS, with Yeo and Chng having transferred to the company.

He asked why FMSS staff were signing invoices on behalf of AHTC. He also asked why Jeffrey Chua, as General Manager of AHTC at the time, did not sign it.

Delegated authority to both How and Chua

In reply, Lim referred to a meeting she held on June 16, 2011, with How, Chua, and Seng Joo How to discuss the handover.

On the same day, she sent a letter delegating authority to both Chua and How, as Secretary and Deputy Secretary of AHTC at the time, to incur costs on behalf of both CPG and FMSS, as concurrent Managing Agents.

Lim added that it was the understanding that CPG did not want to know about Hougang, and that How would handle Hougang’s affairs through FMSS.

Davinder asked if this was explicitly mentioned in the letter, to which Lim replied that it was not, but that was the intention.

Davinder said that as of June 30, 2011, Lim would have been aware that all three people who signed the invoice were shareholders in FMSS.

Yet, Lim signed and paid it. Said Davinder:

“This goes to show that there were no controls.”

In reponse, Lim said:

“Mr Singh, you are mistaken about this.”

She disagreed that the signatories had no roles in AHTC, as they still continued to perform work for AHTC on that date.

She pointed out that by the same reasoning, Chua would not be expected to sign invoices for payments to CPG either, seeing as how he was both a member of CPG and of AHTC.

Keeping things on the quiet?

Davinder contended the reason why the invoice was signed in this manner was so that the payment could be done “on the quiet” from CPG.

Lim disagreed, and referred to a meeting on June 9, where the town council retained Chua and approved for How and Chng to act as check signatories. Said Lim:

“There’s no intention, you know, to do things on the quiet or keep things from CPG.”

Davinder pointed out that Yeo’s name did not appear on the document, and that six days after this meeting, all three were no longer employees of AHTC, and had been moved to FMSS.

Davinder said:

“They were moved out to FMSS but the appearance given to CPG was that nothing had changed.”

In reply, Lim said that they had been instructed to provide Managing Agent services for Hougang.

When Davinder repeated his point that Lim wanted to keep this from CPG, Lim said:

“I disagree, and I don’t even think CPG cares.”

The trial is expected to continue on Oct. 22.

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Top photo by Sulaiman Daud, sketch by Dan Wong