Lawyers on both sides of the Aljunied-Hougang Town Council (AHTC) trial made their final oral submissions in court on April 9, 2019.

Senior Counsel Chelva Rajah is representing the three Workers’ Party MPs and two town councillors.

In his closing oral submission, he stated that only S$15,710 of the lawsuits' claim of S$33.7 million was recoverable, Today reported.

Additionally, the claims of the plaintiffs called into question the manner in which the town council's finances had been managed by the defendants, but not whether the monies had been "misappropriated" or were "unaccounted for".

The plaintiffs are Pasir-Punggol Town Council (PRPTC) and an independent panel that had been appointed to help AHTC recover allegedly improper payments.

Defendants' arguments

About S$32 million out of of S$33.7 million had not been found to be "improper payments" by KPMG

Speaking in court, Chelva stated that roughly S$32 million had not been found by accounting firm KPMG to be improper payments, Today further reported.

It was also not possible to determine which of the payments ought to be recovered, Chelva's team wrote, citing a statement made by KPMG executive director Owen Hawkes' on the stand.

Rather, "detectable" improper payments had been found to only amount to a maximum of S$1.52 million, with the remaining sums being undeterminable, Chelva's team said in their written submissions.

Additionally, of this S$1.52 million, only S$624,621 was recoverable.

And out of this S$624,621, S$608,911 was up for dispute as a result of the basis on which KPMG had called them wrong -- the basis that project management fees paid to FMSS for works that were not “serious cyclical repairs and redecorations”.

Chelva's team further wrote that such a claim did not account for the past practice of Aljunied Town Council under the PAP, in which similar services had also been classified as project management fees.

As such, excluding S$608,911, the recoverable claim effectively came up to only S$15,710.

Chelva also pointed out Section 52 of the Town Councils Act.

The act stated that no suit or legal proceedings shall lie personally against any member, officer or employee of a Town Council for anything done “in good faith”.

He said: “That’s what my clients had been doing in this case — trying to do their best out of a difficult situation.”

Reports that lawsuits were based on are problematic

Chelva also took issue with the reports by accounting firms KPMG and PricewaterhouseCoopers (PwC), which formed the basis of the lawsuits, both Today and CNA reported.

Chelva stated that such reports were not actually "factual witnesses".

Rather, the effects that the reports had were "second-guessing the town councillors’ decisions on the appointment of specific contractors, the terms of their appointment and the kind of fees they should be paid".

This was despite the intention by Parliament that town councils are able to exercise latitude over their own decisions.

Chelva further noted that there was also a discrepancy in the way AHTC and PRPTC had referred to their accountants in their closing arguments.

This was because PRPTC had called its accountant an “expert witness”, while AHTC had called its accountant a “factual witness”.

Chelva argued that this meant PRPTC was not as certain of its position.

This brought up the crux of Chelva's argument -- that the lawsuits had not uncovered a single example of people wrongly taking money for their own enrichment.

Chelva said:

"In a situation like that, you have breaches. They might not have complied with rules and regulations... (But) where is the loss, your Honour?”

Plaintiffs' arguments

A case of political opportunism

Senior Counsel Davinder Singh, in representing PRPTC, stated the case was an image of political opportunism, CNA reported.

He added that it was necessary for the defendants to account for the fullest extent as required by law as it was necessary for the country to know that the system worked honestly.

Davinder said:

"What emerges is a very disturbing picture of political opportunism. It is one thing to leverage on your own merits and strengths to advance your political cause. It is another to use the hard-earned monies of innocent residents to improve your political standing and to score political points."

His sentiments were echoed by David Chan, the plaintiff’s lawyer representing AHTC's independent panel, who stated that WP MPs Sylvia Lim and Low Thia Khiang also had politically linked motives for their actions, Today and CNA reported.

These motives were:

• Protecting the former employees of Hougang Town Council (HTC) and bringing them over to AHTC when WP won Aljunied
• Rewarding the founders of FM Solutions and Services (FMSS), How Weng Fan and Danny Loh, as long-time WP supporters by introducing a profit element for them
• Positioning FMSS as an alternative town council service provider to those already engaged by the PAP

Payment system with no oversight

Chan also honed in on the payment system, adding that the core of the issue was that it been established by the defendants, with no proper oversight and discipline.

Chan added that the system created an environment that allowed How and Loh to approve payments made to themselves for town council services.

This resulted in auditors being unable to determine what the improper payments amounted to.

Chan said:

"Their case now is that S$33.7 million was paid out pursuant to underlying contracts. We say that we don’t know! We don’t know if work was performed, and if a paper trail was put in place. Only the management is able to ascertain if indeed the work was performed."

The case in brief

AHTC’s lawsuit was initiated by an independent panel that had been appointed to help AHTC recover allegedly improper payments.

The panel included senior counsels Philip Jeyaretnam, N. Sreenivasan and KPMG managing partner Ong Pang Thye.

AHTC is suing eight defendants, chief of whom being WP leaders Pritam, Low Thia Khiang and Sylvia Lim, over alleged improper payments involving millions of dollars.

They are also accused of breaching their fiduciary duties in the appointment of FMSS as their managing agent.

Following the closing of oral submissions, Justice Kannan Ramesh has stated that he will deliver his verdict at a later date when it is ready, both Today and CNA reported.

What did the WP leaders themselves say?

Top photo by Matthias Ang