AHPETC Court of Appeals Rules in Favor of the Government

In the latest chapter of the long-running Aljunied-Hougang-Punggol-East Town Council (AHPETC) saga, the Court of Appeals on Friday (27 November 2015) made the following findings:

1.  AHPETC did not disclose related party transactions in its financial statement.  It could not produce any evidence to show that the Town Councillors had considered the full extent of the related party interests.

2.   There were lapses in the procurement of services from FMSS.

3.   Key officers of AHPETC were acting in clear conflict of interest when they approved payment to FMSS - a company in which they themselves were Directors and Shareholders.

4.    AHPETC had not taken any steps to recover amounts due as a result of wrong payments made.

5.   AHPETC did not have a system to monitor its S&CC charges accurately.  As a result, there was no assurance that it was able to monitor and manage arrears properly.  It did not have a proper system to ensure that documents were properly accounted for and safeguarded.

6.   AHPETC had various lapses in internal controls.

7.   AHPETC continues to be in non-compliance by failing to pay into sinking fund.  There is no basis at all for AHPETC to fail to make the transfers.  AHPETC should do so within 3 months, if necessary by increasing FMCC charges or by liquidating its investments.

8.    The Court also held that they ought to appoint Independent Accountants (IAs) to assist in identifying the outstanding non-compliance by AHPETC.  These Accountants will also look at whether payments were made wrongfully and should be recovered.

In a surprising move, Chairman of the Aljunied-Hougang Town Council (AHTC) Pritam Singh said AHTC "fully accepts and respects" the Court of Appeal’s judgment, and will comply with "all the orders made by the court". He said AHTC will also work with MND to facilitate the prompt transfer of the outstanding grants to AHTC. Pritam added, "The Town Council acknowledges its role as a guardian of public funds. We assure the Ministry of National Development (MND) that government grants or grants-in-aid are used solely for the upkeep of the town and in the interests of all residents."

Hopefully, with the IAs appointed and a proper forensic audit performed, we can finally get to the truth of the matter.