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The following article has been sent to us by Alex Au Wai Poon
I have been following the intriguing saga at Workers Party’s Aljunied Town Council.
Call it what you want – mudslinging by PAP, pot calling kettle black… but this is one thing you can’t deny: Low Thia Khiang’s persistent evasion of the core issues.
What exactly are they talking about? What is really ok and what’s not?
1.) A Town Council can appoint general managers from the managing agents that they hired. In fact, this is common practice in most Town Councils.
However, the onus is on this GM to avoid a breach of trust by not awarding contracts to his own company. And if he insists to do so, he should practice full and complete disclosure to councillors.
They should practice procedural fairness and not be able to influence contracts and the payments to his own management agent.
This is obvious to one and all. But in Aljunied, the GM and other owners of the management agent, allowed biased contracts to directly benefit their own companies.
2.) Authorities have no trouble with related-parties transactions.
In PAP Town Councils where the GMs come from the management agent, there is a possibility of a conflict of interest. The difference is this – the GM does not own the management agent and are excluded from Town Council’s decisions from awarding contracts to his employers, there is clear governance in protecting the Town Council. They also do not sign cheques to themselves.
3.) It is ok for a husband and wife team owning the management agent who are also the GM and the Secretary of the Town Council.
Under most corporate reporting standards, related party transactions are acceptable provided there is full and complete disclosure of all transactions and they do not compromise the interest of public funds – taxpayers whose taxes are used as grants to the Town Council and the service and conservancy charges paid every month by the residents.
In Aljunied, the GM and her husband run the Town Council and did not disclose publicly their ownership in the management agent that they were doing deals with.
So they invoiced themselves. Verified work done themselves. Wrote cheques themselves. And until the auditors took this to public, we were none the wiser.
The Worker’s Party excuse to this self-payment, is that the MPs would co-sign the cheques. But this is also information that is privy between them. Without due process, the practice of co-signing opens up more questions than provide answers.
4.) Authorities have no problem with awarding contracts to your own friends and family.
But once again – disclosure. Be open about it and let the public lodge their questions and doubts. These are public monies and people need to know why they were hired. It is good corporate governance. Not only did Aljunied fail to declare such contracts but attempted to hide it.
5.) Having husband and wife sitting on the same board of the company is alright.
But once again the lack of disclosure about the relationship to the public, and worse, by using different addresses in an ACRA declaration, then it opens too many doubts. Why you are trying to make sure people do not know you are related? Why are you afraid to let people know there is a husband and wife who own this company to do work for you? Is the reason because you are also the same people who assign work, verify work and write cheques to yourselves?
6.) People have bought into pot-calling- kettle-black comparison even when the examples cited were wrongly used.
Temasek and GIC are in the business of making losses, and gains. This is what they do all day long – lose money, make money. In fact, corporate governance show that the political Board of Directors DO NOT influence purchases. Lee Hsien Loong, Tharman etc, do not…and cannot tell GIC what to buy and when to buy. This is agreed to in the Santiago Principals by sovereign wealth funds around the world.
The political board of directors do not get paid by the GIC at all. Not even a claim for coffee. The government ministers are on the board because they must at least know whether or not the company is heading in the right direction. The government is GIC’s one and only client. If you were DBS’s only client, surely it makes sense for you to be on their board of directors?
Yes, the GIC and Temasek does announce heavyweight losses once in a while, but they also made heavyweight gains. And if they behaved like a small provision shop, making payments by themselves, to themselves…chances are they won’t do very well in being fund managers of this country’s wealth.
..and finally, the missing final arrow. The public now has detail about the secretive AHPTEC, showing the ownership structure and the payments between the Town Council and the two companies owned by the executives of the Town Council.
Those arrows to signify the money trail are between the Town Council and the agent and another company owned by the Secretary of the Town Council. A final and most important missing arrow is : where does the money flow out to from FMSS and FMSI?
After contracts and monies are being paid out to the two, where do these companies farm out the lucrative contracts such as signboard replacement, repair works and other sub contracting work in the Town?
Once we are able to see where they expense those money to, the story will get even more intriguing. Do we see familiar individuals or even the political party itself at the end of that money trail?
[plinker]
