AHTC case: Town councils drop claims in multi-million dollar lawsuit after settling with WP leaders Pritam Singh, Sylvia Lim, Low Thia Khiang
The settlement would allow the Workers' Party to focus on the next General Election, says independent political analyst Dr Felix Tan.
Pritam Singh, Low Thia Khiang and Sylvia Lim pictured in a photo taken on Jul 24, 2024. (Photo: Facebook/Pritam Singh)
This audio is generated by an AI tool.
SINGAPORE: The two town councils that sued Workers' Party (WP) leaders for alleged misuse of town council funds have settled the case after mediation, with the town councils dropping their claims and all sides bearing their own legal costs.
In a joint statement on Wednesday (Jul 24) issued by Ms Sylvia Lim, Mr Low Thia Khiang, Mr Pritam Singh, Mr Chua Zhi Hon and Mr Kenneth Foo (known collectively as the town councillors), they said they have settled their respective lawsuits with Aljunied-Hougang Town Council (AHTC) and Sengkang Town Council (SKTC) on a drop hands basis.
This means the two town councils, which were represented by independent panels, have agreed to drop their claims for damages.
As for costs, all sides will bear their own instead of fighting to have the other party foot the bill.
The courts had previously referred to the likely difficulty of determining damages, and parties were in the midst of preparatory steps for the next tranche of the trial to decide damages when the settlement was reached.
Lawyers for AHTC and SKTC told CNA that they had nothing to add beyond the statement.
Dr Felix Tan, an independent political analyst, said the settlement would allow the WP to focus on the next General Election, which has yet to be called but must be held by November 2025.
"With this matter out of the way, it will allow the WP ... to focus on other more pertinent matters, such as building up its team with credible and trusted individuals," Dr Tan told CNA, adding that the settlement "might finally be a way to resolve the matter amicably".
Dr Mustafa Izzuddin, a Senior International Affairs Analyst at Solaris Strategies Singapore, said the WP would likely gain some political capital from this. But he added that the town council issue was "not itself a foremost factor in determining the electoral outcome".
WHAT THE CASE WAS ABOUT
The settlement appears to bring to a close a long-running legal case mounted in 2017 by AHTC and Pasir Ris-Punggol Town Council (which later handed the suit over to SKTC when it absorbed Punggol East constituency) against eight parties.
These are: WP leaders Ms Lim, Mr Low and Mr Singh; town councillors Mr Chua and Mr Foo; managing agent FM Solutions and Services (FMSS), and FMSS' owners Ms How Weng Fan and her late husband Mr Danny Loh.
The town councils had accused the eight defendants of making improper payments worth over S$33.7 million (US$25.1 million) to FMSS and its subsidiary FMSI.
The defendants were found liable by the trial judge for multiple breaches of fiduciary duty, skill and care for various managing agent contracts, payments and awarding of contracts to vendors.
But the Court of Appeal later overturned most of these liable findings, rejecting that the defendants were fiduciaries or owed equitable duties, on which most of the findings rested.
The apex court accepted the defence rejected by the trial judge - that the town councillors had been acting in good faith for several of the claims levelled at them. This was a key argument during the High Court trial.
However, the Court of Appeal found that all the defendants were liable for negligence to SKTC for permitting control failures in a payment system to exist.
The court also found Ms Lim, Mr Low, Ms How and the late Mr Loh liable to AHTC for the same control failures.
Mr Singh, Mr Chua and Mr Foo were not found liable for this as AHTC had not made a case for it in their pleadings.
Ms Lim was found liable to SKTC for a third issue - for causing a new contract to be awarded to Red-Power Electrical Engineering at many times more than the cheaper rates given by the existing vendors.
Timeline: How the case came to be
In May 2011, WP won the five-member Aljunied GRC in the General Election and retained its single seat of Hougang – this was the first time an opposition party had won a GRC.
WP formed the Aljunied-Hougang Town Council, and FMSS was set up and hired as the town council's managing agent.
After WP won the single seat of Punggol East in a by-election in 2013, it folded it into its existing town council and the entity was renamed the Aljunied-Hougang-Punggol East Town Council (AHPETC).
Months later, People's Action Party Members of Parliament questioned WP during a parliamentary debate about a possible conflict of interest. This was because AHPETC's managing agent FMSS was owned by WP supporters.
In February 2015, the Auditor-General's Office audited AHPETC and found lapses in governance and compliance, including the fact that FMSS owner Danny Loh was the secretary of the town council, with the power to co-sign cheques, while his wife How Weng Fan was the general manager of AHPETC.
WP lost Punggol East to the PAP in the September 2015 General Election, and the town council was named AHTC again.
In November 2015, the Court of Appeal ordered AHTC to appoint accountants to fix lapses found by the Auditor-General's Office.
Accounting firm KPMG ran an audit and found what it termed "improper payments" worth over S$33.7 million paid to FMSS and its subsidiary FMSI.
In February 2017, AHTC appointed an independent panel to review the findings of the report.
On behalf of AHTC, the independent panel filed a civil suit against the three WP MPs - Ms Sylvia Lim, Mr Low Thia Khiang and Mr Pritam Singh - to claim the money back.
Shortly after, Pasir Ris-Punggol Town Council also filed a separate suit against the three WP leaders, for losses allegedly incurred while WP ran Punggol East constituency.
