I have been closely following the court case as, like many of my friends, we had high hopes for the WP to be the alternative to the PAP. Sadly, the WP imploded with its mismanagement of its Town Council and, in my opinion, this contributed significantly to their dismal performance at GE2015. Whether it was incompetence or financial impropriety, AHPETC is the albatross hanging around the heads of Low Thia Khiang, Sylvia Lim and Pritam Singh.
From the newspapers reports, I learnt that Ajunied-Hougang Town Council (AHTC) nominated an essentially one-man operation called Business Assurance to be the accountant to solve their many problems. HDB asked some questions presumably because it has concerns about the company’s capabilities. The TC declined to reply and referred the issue to the Court. Last week, the Court directed the TC to provide more information on Business Assurance.
I am really surprised that AHTC chose this company because if they had bothered to ask around in the industry, they would have discovered some interesting facts about this one-man operation owned and managed by Alex Chai Chon Fatt. Being an accountant, I am aware that it is fairly common knowledge among many of us in the industry that Alex Chai has failed his Practice Monitoring Programme (PMP) and that he is restricted from conducting audits of companies for a period of 1 year. In fact, this is the second time that Alex Chai has failed his PMP.
For those that are unsure about what the PMP is, the PMP is the regulatory instrument to promote audit quality. Audit quality is the cornerstone of market confidence in the reliability of the financial information upon which the market makes capital allocation decisions. The PMP provides quality assurance to the market through ascertaining whether public accountants have complied with the prescribed auditing standards, methods, procedures and other requirements. This assurance gives users of financial reports increased confidence in audit opinions.
Did Pritam Singh know all this when he selected and nominated the firm? If he did, he was pulling a fast one to mislead HDB and the Court. If not, he has been sloppy because there is every reason why he or his GM should have conducted due diligence checks to ensure that the company is in good standing before selecting and nominating them. They would have found out if they had asked Business Assurance directly because I don’t think Alex would lie about failing the PMP and is under restriction as these are unavoidable facts.
I eagerly await the unfolding drama in Court this week. MND and HDB will definitely be aware that Alex Chai is no longer qualified to conduct the audit. In fact, a quick Google check will tell you that since 14 Nov 2014, Alex Chai had joined Transcorp Holdings as its financial controller. So what is the WP and Pritam Singh up to? If you ask me, it is likely that Pritam will now waste the Court’s time by giving some excuse to avoid answering the question directly as to whether they knew or whether they didn’t bother to conduct basic due diligence checks on Business Assurance and Alex Chai’s professional standing before selecting and nominating it.
BTW while I cannot confirm this, I also heard talk in the industry that AHTC’s latest auditor was Audit Alliance and its senior partner, Lee Tai Wai had also failed his PMP.