AHTC trial: FMSS lawyer and accountant spar over PwC’s ‘prejudiced’ report

AHTC trial: FMSS lawyer and accountant spar over PwC’s ‘prejudiced’ report

PricewaterhouseCoopers partner Goh Thien Phong reiterates concerns over the appointment of FMSS for the first and second term as Aljunied-Hougang Town Council’s managing agent.

AHTC today file
(File photo: TODAY)

SINGAPORE: The PricewaterhouseCoopers (PwC) report on whether the Aljunied-Hougang-Punggol East Town Council (AHPETC) had made improper past payments took centre-stage again on Monday (Oct 15) as defence lawyer Leslie Netto called it “prejudiced” and not the work of a “fair-minded accountant”.

This was, however, rejected by PwC partner Goh Thien Phong, who reiterated his concerns over the appointment of one of the defendants, FM Solutions and Services, as the managing agent (MA) of Aljunied-Hougang Town Council (AHTC).

In Monday morning’s court session, Mr Netto questioned the scope and credibility of PwC’s report, saying it went beyond its remit and that there was a lack of substantiation. Citing a point made in the PwC report about possible double-charging for manpower by FMSS, the lawyer asked how the conclusion was made given a lack of evidence.

The PwC report highlighted concerns over how FMSS, after adopting the rates set by previous managing agent CPG that included manpower costs, still charged a separate fee to cover the manpower costs of existing staff of the former Hougang Town Council, who were brought over to help run AHTC.

Mr Goh in turn pointed to KPMG’s report which detailed the breakdown of costs, but admitted that the conclusion of double-charging was made by PwC.

“Your report is prejudiced and cannot by any stretch of imagination be regarded as an independent opinion of a fair-minded accountant,” the defence lawyer said.

“That’s Mr Netto’s clients’ views,” retorted the accountant.

Mr Netto acts for Ms How Weng Fan, who was both AHTC's former deputy secretary and FMSS director and shareholder. He also acts for Ms How's late husband Danny Loh, who was FMSS owner, and FMSS itself. They are parties of the suit brought by AHTC and Pasir Ris-Punggol Town Council against Workers’ Party (WP) Members of Parliament (MPs) Low Thia Khiang, Sylvia Lim and Pritam Singh, as well as AHTC town councillors Chua Zhi Hon and Kenneth Foo.

Together, they are accused of breaching fiduciary duties and allowing more than S$33 million in “improper” payments made by AHTC to FMSS and others.

READ: Asking CPG to run AHTC without a computer system akin to building a house without bricks, says defence

READ: MND had 'no difficulty' accepting AHTC's waiver of tender for managing agent, says defence


Mr Netto also asked if PwC had sought the views or clarifications from the defendants, particularly FMSS’ How, before publishing the report. The audit firm said in the report it had sent a draft copy of the report to AHTC to respond and submit representations on the findings and conclusion, but the town council declined.

Mr Goh said there was no need to seek the representations of the defendants as PwC was tasked to see if there was any breach of town council rules and improper payments made to FMSS and others.

But Mr Netto said that if PwC had sought Ms How's comments, he would have received "a lot of information".

For instance, as Ms How had stated in her affidavit, it was WP’s Low who asked her and her late husband Mr Loh to incorporate a company to be AHTC’s managing agent, and it would be a temporary arrangement in the event CPG, the existing MA, decided to pull out of running the town council.

She said that even though the intention for FMSS to take over as MA was communicated to the other town councillors and a Letter of Intent was submitted by FMSS on Jun 22, 2011, it was “never told with certainty” it would get the job until Ms Lim signed the document on Jul 8.

“We were never certain that we would be chosen until FMSS was appointed MA,” Ms How said in her statement. “There was no conspiracy to award contracts to FMSS.

“Ms Sylvia Lim and Mr Low are not the kind of people who will whisper and plot.”

But Mr Goh said that even if he had sought Ms How's perspective, the other audit firm KPMG would have addressed these issues in its 2016 report on AHTC.

The PwC partner also pointed out that there is no evidence documenting the negotiation of pricing on the first MA contract with FMSS. An email from an AHTC town councillor to Ms How on May 19, 2011, informing her that her company would be MA for a year, was also not mentioned in her statement, he said.

“I’m not sure why she said she is not certain (of FMSS’) appointment, but it’s quite obvious in that document that (FMSS) will be the MA without even calling a tender.”

In closing, Mr Netto asked Mr Goh if he would change his mind if he had heard from Ms How, to which the latter said he would not.

“That’s because you’re prejudiced,” the lawyer said.

Mr Goh was stood down as witness on Monday, and the trial was recessed until 2pm on Tuesday when Mr Low is expected to take the stand.

Source: CNA/zl