MND remains concerned over AHTC financial affairs, could take regulatory action

MND remains concerned over AHTC financial affairs, could take regulatory action

The Ministry of National Development (MND) said on Thursday (Dec 5) that it was concerned over Ms Sylvia Lim and Mr Low Thia Kiang's continued involvement in the financial affairs of Aljunied-Hougang Town Council (AHTC). Deborah Wong with more. 

SINGAPORE: The Ministry of National Development (MND) said on Thursday (Dec 5) that it was concerned over Ms Sylvia Lim and Mr Low Thia Kiang's continued involvement in the financial affairs of Aljunied-Hougang Town Council (AHTC). 

In October, Ms Lim and Mr Low were found liable in a landmark case investigating the misuse of tens of millions of dollars in town council funds. 

READ: All town councils have unqualified financial statements for FY2018

The Workers' Party leaders were said to have breached their fiduciary duties in appointing FM Solutions and Services (FMSS) as managing agent of AHTC and failing to act in the town council's best interests.

Following the High Court judgment, Parliament last month called upon the town council to discharge its responsibility by requiring the two leaders to recuse themselves "from all matters relating to, and oversight over, financial matters of AHTC".

On Nov 30, AHTC said Ms Lim and Mr Low did not need to recuse themselves from the town council's financial matters, after councilors had voted on the matter at a quarterly meeting.

READ: Parliament passes motion calling for WP's Sylvia Lim, Low Thia Khiang to be recused from AHTC's financial affairs

In a press release on Thursday, the ministry noted that the High Court had found both the elected town councillors of AHTC had "acted dishonestly and in breach of their fiduciary duties, and that their conduct had lacked integrity and candour".

Despite these "serious and grave findings", AHTC resolved Ms Lim and Mr Low do not need to recuse themselves from AHTC’s financial matters, MND pointed out.

The ministry said that for good governance, AHTC should take interim measures to safeguard its procurement and payment processes immediately. 

"Until and unless the Court findings in respect of Ms Lim’s and Mr Low’s conduct are reversed by the appellate Court, they remain good and should be taken seriously by AHTC," said MND. 

The ministry said it wrote to AHTC on Wednesday to request for information on AHTC's reasons for not requiring Ms Lim and Mr Low to recuse themselves from the town council's financial matters.

Upon receiving AHTC's response, it would consider whether regulatory action needs to be taken "to ensure the proper safeguarding of public monies entrusted to town councils".

MND also said that AHTC achieved a "green" banding in the corporate governance indicator of the FY2018 Town Council Management Report, but this was due "in large part to the efforts of KPMG, which assisted AHTC in its remediation of past control failures and audit points" over two years.

It remained concerned as to whether the measures implemented under KPMG's guidance would be adequate to "guard against the recurrence of the past control failures" if Ms Lim and Mr Low continued to be involved in AHTC's financial affairs. 

This is "especially since the adequacy of the measures is entirely dependent on their implementation by the individuals involved with AHTC’s financial affairs", said the authorities.

In a statement on its website issued on Thursday, AHTC said MND wrote a confidential letter to chairman Faisal Manap, seeking clarification on the town council's decision to not require the recusal of Ms Lim and Mr Low on financial matters. 

AHTC said it will respond to the ministry by the stipulated deadline of Dec 13.

Source: CNA/hm/hs(hm)

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