To be precise, it is the Worker’s Party run Aljunied Hougang Town Council (AHTC) that has lodged the action. To be even more precise, it is an independent panel installed by the AHTC that has filed the action.
The reason there is an independent panel is because of a lawsuit brought about in February this year. The panel is setup to investigate the findings of an auditor’s report by KPMG which revealed “serious flaws” in governance and millions of dollars in improper payments made to third parties.
The panel is headed by Phillip Jeyaretnam and senior counsel N. Sreenivasan together with KPMG’s managing partner Ong Pang Thye.
The suit, filed last Friday alleges that the three Worker’s Party MPs acted in breach of their fiduciary duties.
According to the suit, Sylvia Lim and Low Thia Khiang misled the town council into waiving a tender and appointed a company called “FM Solutions and Services” (FMSS) as AHTC’s managing agent. It also accused them on arbitrarily deciding that then deputy secretary and general manager How Weng Fan and her late husband Danny Loh (whom was AHTC’s secretary) would set-up and incorporate FMSS.
What this means is, the town council had setup (what appears to be) a shell company and had it staffed by the town council’s own staff and not independent personnel.
The independent panel is seeking compensation of more than S$33m which was said to have been wrongly paid out to companies.
The lawsuit also accused the MPs of entering into contracts with LST Architects for 10 projects, despite them being more expensive, without proper justification.
However, the Worker’s Party is denying all of this. “The WP MPs have acted in good faith and in the best interests of the town council and our residents”, they said in a joint statement.