SINGAPORE: The Ministry of National Development (MND) said on Friday (Jan 3) it has issued an order requiring Aljunied-Hougang Town Council (AHTC) to take action against Workers' Party (WP) leaders Low Thia Khiang and Sylvia Lim.
The two elected town councillors of AHTC were found liable in October 2019 in a landmark case investigating the misuse of tens of thousands of dollars in town council funds.
They 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.
READ: Workers' Party MPs found liable in multimillion-dollar AHTC case; judgment raises "serious doubt" about their integrity
In a statement, MND said it has ordered AHTC to "restrict their (Sylvia Lim and Low Thia Khiang) powers with respect to certain financial decisions, in order to guard against a recurrence of irregularities caused by them".
Ms Lim and Mr Low should not have the authority to unilaterally incur or approve expenditure, or unilaterally accept or waive any quotation or tender for any stores, services or works on behalf of the town council, said MND.
The ministry also ordered that the leaders not serve as cheque signatories for AHTC.
"The order does not preclude Ms Lim and Mr Low from continuing to serve as elected members of AHTC, and discharging all other functions and duties in their respective capacities, including taking part in discussions and voting in committees," the statement added.
MND's statement came about a month after the ministry expressed concern over the Workers' Party leaders' continued involvement in AHTC's financial affairs.
Following the High Court judgment, Parliament had called upon AHTC to discharge its responsibility by requiring the two leaders to recuse themselves from the town council's financial matters.
But AHTC said on Nov 30 that Ms Lim and Mr Low did not need to do so, after councillors had voted on the matter at a quarterly meeting.
On Dec 5, MND issued a press release noting that the High Court had found that both leaders had "acted dishonestly and in breach of their fiduciary duties, and that their conduct had lacked integrity and candour".
AHTC had resolved that Ms Lim and Mr Low did not have to recuse themselves from the town council's financial matters despite these "serious and grave findings", MND pointed out.
In its statement on Friday, MND said it had "carefully considered" AHTC's letter on Dec 13, which was responding to the ministry's request for information on its reasons for not requiring Ms Lim and Mr Low's recusal.
"We note that the reasons provided by AHTC for not requiring Ms Lim and Mr Low to recuse themselves from all of AHTC’s financial matters do not relate directly to, and more importantly, do not detract from the grave and serious Court findings on Ms Lim’s and Mr Low’s conduct," said the ministry.
"Further, while we note the measures that AHTC has put in place, it is not apparent – and AHTC has not demonstrated – how they would be effective to guard against a recurrence of irregularities arising from the acts of dishonest town councillors," MND added.
In response to queries from CNA, a spokesperson said the town council is reviewing the ministry's order and will issue a statement "in due course.