Town council dispute not political, says MND
Sylvia Lim and Muhd Faisal entering the Supreme Court on May 4, 2015. Photo: Jason Quah
SINGAPORE — Lawyers for the Ministry of National Development (MND) and the Aljunied-Hougang-Punggol East Town Council (AHPETC) locked horns today (May 4) over whether the dispute regarding AHPETC’s finances was “political” and whether the courts should intervene, during the first day of a two-day hearing on the ministry’s application to the courts to appoint independent accountants to safeguard government grants to the town council.
The courts do not have the power to assign independent accountants to co-sign payments a town council makes using government grants, argued AHPETC lawyer Peter Cuthbert Low, who framed the dispute as a political one between the ruling People’s Action Party and the Workers’ Party – a point rejected by the MND, which is represented by the Attorney-General’s Chambers deputy chief counsel for litigation Aurill Kam.
Ms Kam argued that the town council’s characterisation of the dispute as political was “plainly wrong” and a veiled attempt to sidestep the issue. The questions posed to the court were legal ones, and she said the MND had the statutory right to seek an appropriate order from the High Court.
At the hearing today were two WP Aljunied GRC Members of Parliament, Mr Muhamad Faisal Abdul Manap and Ms Sylvia Lim, who is the town council chairman.
Mr Low said that the Town Councils Act intended to give elected MPs and town councillors full autonomy in managing town council funds – and to be accountable only to their residents.
Asked by High Court judge Quentin Loh if this meant that nothing could be done until the General Election about broken lifts that cannot be repaired due to a lack of payments to the sinking fund, Mr Low said yes. He pointed out that the Government already plans to amend laws to strengthen corporate governance and financial accountability of town councils. And criminal charges can be pursued when there is criminal breach of trust, he said.
MND is empowered under the Act to impose conditions in disbursing service and conservancy grants, and should do so instead of incurring legal costs for the town council through court action, Mr Low said.
The ministry applied to the High Court on March 20 for independent accountants to be appointed, to take steps to recover any AHPETC funds incorrectly made, and to co-sign payments exceeding S$20,000 using fresh government grants. This was to safeguard fresh grants disbursed, following a report in February by the Auditor-General’s Office (AGO), which found major lapses in AHPETC’s financial management, governance and compliance with the Act. The report had concluded that “until the weaknesses are addressed, there can be no assurance that AHPETC’s accounts are accurate and reliable, or that public funds are properly spent, accounted for and managed”.
While Mr Low conceded that AHPETC had breached the Act and the Town Council Financial Rules, he argued that there is no power in the Act to undertake legal action. Neither does the MND have jurisdiction over funds it has already disbursed, he said.
Ms Kam said that AHPETC has yet to address weaknesses identified in the AGO report, even though it has hired Audit Alliance as its auditors and sole-proprietorship Business Assurance as its financial consultant. The independent accountants the MND seeks to appoint will not duplicate the work of Audit Alliance and Business Assurance, which are not tasked with shedding light on any wrongful payments or unlawful conduct, she said.
Ms Kam told Justice Loh of AHPETC’s statement during an earlier pre-trial conference that it had sufficient funds until next month. But this would be premised on the town council not making transfers to the sinking fund, which are used for long-term cyclical maintenance. AHPETC has not made payments to the sinking fund for two quarters of the last financial year, the court heard.
There is “urgency” to appoint independent accountants, as the town council’s contract with managing agent FM Solutions and Services expires in July, said Ms Kam. More clarity is needed before further dealings with the managing agent, or before it hands over duties to a new agent, she said.
Before heading into the courtroom, Ms Lim told reporters that she would not be able to comment further as the case was before the courts, but added that the town council would be mounting a “vigorous defence”. “We are doing this in the interest of our residents, and we believe this court case is wholly unnecessary,” she said.
Mr Low is expected to conclude his arguments today and address points raised by Justice Loh, such as processes that AHPETC has put in place to address concerns over related-party transactions.
