Tag: AHPETC

K Shanmugam: AHPETC’s “Egregious Conduct” Must Be Punished

A day after a High Court raised the red flag on the goings-on in Aljunied-Hougang-Punggol East Town Council (AHPETC), Law Minister K Shanmugam followed up with hard-hitting words for the Workers’ Party, which runs the town council.

The scathing comments Justice Quentin Loh directed at AHPETC confirms his remarks previously that AHPETC’s town councillors had acted in an “unlawful” manner, said Mr Shanmugam, who is also Foreign Minister. He also zeroed in on the fact that the judge had highlighted AHPETC chairman Sylvia Lim’s misleading statements to Parliament about the financial transfers the town council was required to make.

“I said in February, in Parliament, that the WP MPs’ conduct on AHPETC was unlawful. I said that several times. I choose my words carefully. This judgment confirms what I have said,” said Mr Shanmugam, who was giving his views on the court’s decision at the Ministry of Foreign Affairs today (May 28). “The judge was scathing about the town councilors and their conduct. He said that the chairman of the WP misled Parliament. It is very serious to lie in Parliament.”
Today was not the first time Mr Shanmugam has, shorn of parliamentary privilege, described the WP town councillors’ conduct as unlawful. Parliamentary privilege refers to the legal immunity from any action in the courts for words spoken in the course of parliamentary proceedings. The aim is to allow Members to speak freely and frankly without fear of legal consequences.

In an 80-page judgment released on yesterday, Justice Loh had said that AHPETC’s actions were “at the height of financial irresponsibility”, quoted Mr Shanmugam.

The judgment underscores the fact that action should be taken over the “egregious conduct” of the AHPETC, he added, highlighting that the judge had said the conduct was “possibly criminal” and that the town council could be sued by residents and the Housing and Development Board.

Mr Shanmugam said: “If this were to happen to a People’s Action Party town council, what do you think Singaporeans would be asking? If this were to happen to a public company, what do you think the shareholders would be saying? Is conduct like this responsible? Is the Government responsible if it just keeps quiet in the face of a judgment from the Supreme Court that says all these things?”

The judge also noted that “it is clear there are grave and serious questions” in AHPETC, relating to its books and the validity and property of payments made to related parties.

Calling for WP’s Secretary-General Low Thia Kiang and other AHPETC town councillors to take action, Mr Shanmugam said: “(They) have to explain what are they going to do to set right the situation? … What are they going to do to answer the ‘grave and serious questions’ that the court says has been raised? This is pretty serious.”

Mr Shanmugam said MND will consult the Attorney-General’s Chambers on its next steps, but said the Government has a responsibility to pursue further action.

Reiterating that the judgment concurs with the government’s position that AHPETC’s conduct “was bad … and actionable”, Mr Shanmugam said the judge was of the view that the Town Councils Act empower the HDB and residents, not MND, to seek legal action.

“That is something the Attorney-General will advise us on, as to whether it is the correct interpretation, and what they should do about it,” he said.

AHPETC could not be reached for comment today.

Source: www.todayonline.com

May 29, 2015
Residents Forced To Clean Common Areas, Query AHPETC Collection Of S&CC Charges

SINGAPORE — For more than seven months, the residents and the developer of a Design, Build and Sell Scheme (DBSS) project at Upper Serangoon Road had to clean and maintain the common areas themselves, because of an impasse involving the Aljunied-Hougang-Punggol East Town Council (AHPETC) and the Housing and Development Board (HDB) over maintenance documents.

Following discussions, the standstill at Parkland Residences was recently resolved and from next month, the town council will fulfil its duty to manage common property in public housing estates as stipulated under the Town Council Act.

However, as far as the residents and the developer are concerned, the matter is not fully resolved: Residents, several of whom had moved in as early as October last year, said that during that period, some of them continued to pay service and conservancy charges (S&CC), even though others had stopped paying as a matter of principle. Meanwhile, the developer, Kwan Hwee Investment, said it hopes to seek reimbursement for the expenses it had incurred for taking care of the common areas between November and this month.

The situation came to light after TODAY reader Julia Ng wrote to the newspaper last week about the problems she and her neighbours face at Parkland Residences.

Among other things, Ms Ng wrote about how residents were billed for the S&CC upon collecting their keys but “there were no subsequent reminders, and many of us have not been making payment”.

She added: “It did not seem required, since there was no maintenance as evidenced by the dirty corridors and surroundings, especially in the earlier months when many residents took it upon themselves to clean the corridors.”

Ms Ng said the residents understood that the development had not been handed over to the town council and that the S&CC “were collected on behalf of the HDB, which the latter denied”.

Replying to Ms Ng’s letter, HDB director (land administration) Koo-Lee Sook Chin clarified that the S&CC collected by AHPETC “are not collected on behalf of HDB”. She revealed that AHPETC had “refused to perform its duty until the developer handed over a list of documents and items specified by (the town council)”.

“HDB has clarified that these documents and items were not required for AHPETC to carry out its day-to-day cleaning and maintenance,” Mrs Koo-Lee said.

She added that as AHPETC had “refused to maintain the common areas”, the HDB asked the developer to clean the estate in the interim, “to ensure that the hygiene of residents’ living environment would not be compromised”. The developer has been cleaning the estate since Nov 12 last year, Mrs Koo-Lee said.

“Pending AHPETC’s execution of its duties to maintain the estate, HDB will work with the developer to ensure that the estate is maintained in the interim, for the benefit of all residents,” she said.

Speaking to TODAY, Mr Philip Tan, Kwan Hwee Investment’s project manager for Parkland Residences, confirmed that the AHPETC wanted HDB’s endorsement for maintenance documents — such as drawings of water supply and gas pipes and lift maintenance schedule — but the HDB disagreed.

Mr Tan said these documents are needed to assist a town council in taking over the maintenance of services. He added that the developer had deployed cleaners on a daily basis. “We hope to seek some form of reimbursements for the cleaning work that we have done since November,” he said.

Responding to TODAY’s queries, an AHPETC spokesman said the town council “agrees that there is room to improve the handover procedures between the developer, the HDB and the town council with regard to DBSS developments”. He added that the town council was “exercising its due diligence in the handover”. Nevertheless, the town council has since reviewed its internal process, he said.

The spokesman did not reply to questions on the S&CC, including which period was the AHPETC collecting the S&CC and what it intends to do with the S&CC collected. Residents at Parkland Residences said the situation has improved, but they recalled their frustrations in the initial months.

“There was a rat infestation at my block,” said resident Joyce Wong, 27. “The bins at the lift lobbies just started piling up because no one was clearing them. When residents complained, the developers took away the bins, but then we didn’t have anywhere to discard our rubbish at.”

Another resident, a homemaker who only wanted to be known as Mrs Chan, said: “We asked the HDB whether we should pay (S&CC), but they said they hadn’t handed over to the town council yet and were not collecting. When we approached the town council, they said they were collecting on behalf of HDB, but the HDB said they didn’t know anything.”

Human resource manager Sim Bee Lay, 39, said she has not paid the S&CC since she moved into her flat.

“We only received one letter and there were no reminders following that,” she added.

Source: www.todayonline.com

May 28, 2015
High Court Turns Down MND Request For Independent Accountants At WP-Run AHPETC

The High Court will not appoint independent accountants to oversee government grants to the Workers’ Party (WP)-run town council.

Justice Quentin Loh said that the Ministry of National Development (MND) has not established legal bases for its court application to appoint the accountants.

Despite the “grave and serious questions” raised over the state of accounts at Aljunied-Hougang-Punggol East Town Council (AHPETC), the judge wrote that “when the Town Councils are set up, the whole idea is to rest the responsibility of the management of the funds as well as the estate with the Town Council.”

The Court therefore will not appoint independent accountants to oversee payments made by AHPETC.

MND had wanted independent accountants to sign off on AHPETC payments over $20,000 before it released several million in government grants to the town council.

But in his grounds of decision, released on Wednesday, Justice Loh said that it is a “travesty for AHPETC to have ignored their duties and obligations imposed on them by the Town Councils Act and Town Council Financial Rules.”

“They owe a duty and a heavy responsibility to their constituents to run AHPETC properly and it is incumbent on them to put their house and finances in order.”

“If AHPETC was a managing corporation … I have no doubt that AHPETC or its officers will be exposed to to the possibility of civil liability or, in an extreme scenario, criminal liability,” he added.

Justice Loh said that his decision should not stop the Housing Board or AHPETC residents from bringing legal action against AHPETC for the lapses.

In a two-day court hearing earlier this month, the MND said that questions remain over the cash flow position and accounting practices of AHPETC, which recently missed two sinking fund payments.

AHPETC said that it did not make those payments as it needed the funds to keep daily operations going.

MND has withheld two years of grants to AHPETC – a total of about $15 million – as it said it has no guarantee that those funds would be used properly.

On March 20, MND applied to the court to appoint independent accountants to AHPETC to safeguard government grants.

Earlier this year, serious accounting and governance lapses were discovered at AHPETC by the Auditor-General’s Office.

Commenting in the judgment on Wednesday night, AHPETC chairman Sylvia Lim, who is also WP chairman and an MP of Aljunied GRC, said: “We respect the court’s decision and will be studying the judgment in detail.

“In the meantime, we remain focused on filing our audited accounts for FY 13/14 and FY 14/15, and on continuing to improve our financial processes.”

Separately, the ministry noted in a statement that the Court agreed with its concerns about AHPETC.

A spokesman, citing the judgment, said: “The Court said there were ‘grave and serious questions’ that have been raised regarding the state of AHPETC’s accounts and the validity and propriety of payments previously made by AHPETC to related parties (amounting to $25.9 million), and that ‘there have also been numerous breaches of the provisions’ of the Town Councils Act and Town Councils Financial Rules. The Court added that the TC’s conduct was the height of financial irresponsibility.”

She added: “The judge also stated that if AHPETC was a managing corporation subject to the Building Maintenance and Strata Management Act, he would have no doubt that AHPETC or its officers will be exposed to the “possibility of civil liability… or, in an extreme scenario, criminal liability”.

“The Court added that it was a travesty for AHPETC to have ignored their duties and obligations. And that the TC was to be blamed for not accepting MND’s offer to release the grant.

“The Court said that HDB and residents could have brought the action, but not MND itself. The Court has also noted that MND can require the TC to appoint Independent Accountants (as a condition for release of grants), without having to get a court order.”

The spokesman added that MND will carefully study the judgment, and consider what its next steps should be.

Source: www.straitstimes.com

May 28, 2015
AHPETC Expects Grants To Be Released Soon

I refer to the various news reports of 12th and 13th May on the information and comments released by the Ministry of National Development (MND) to the media, concerning the withholding of the Service & Conservancy Charges (S&CC) operating grant for Financial Year (FY) 14/15 to Aljunied-Hougang-Punggol East Town Council (AHPETC). In order that the public and residents may better understand the matter, it is necessary for AHPETC to respond.

S&CC operating grants are needed

First, I wish to set out AHPETC’s position on the annual S&CC operating grant (“the operating grant”).

Like all Town Councils, AHPETC requires the operating grant to fulfil its obligations under the Town Councils Act. Without the government’s operating grant, all Town Councils would run deficits, and over time would face cash flow problems and financial difficulty. During the MND Committee of Supply debates in 2013, MND Senior Minister of State Lee Yi Shyan had estimated that the government grants accounted for 15% of Town Councils’ annual budgets.

I wish to state categorically here that there has not been any statement by me nor anyone on AHPETC’s behalf that AHPETC does not require the operating grant.

MND had indicated in its letter of 28 April 2014 that it would withhold the operating grant till the conclusion of the Auditor-General’s Office (AGO) audit. AHPETC went through the extensive audit. However, after the AGO audit was concluded, a special Parliamentary debate was convened on 12-13 February 2015 to scrutinise the findings. MND’s position there was that AHPETC needed to take various follow up measures or to satisfy the Ministry that the grants would be safeguarded, before the operating grants for FY 14/15 and FY 15/16 could be paid out to AHPETC.

The next step by MND was the court application filed on 20 March 2015. MND is now asking the court to appoint independent accountants to co-sign cheques drawn on the government grants to be disbursed to AHPETC subject to certain conditions.

Be that as it may, AHPETC welcomes the intended disbursement of the grants for FY 14/15 and FY 15/16. AHPETC has indicated that under the Town Councils Act, the Minister may impose reasonable conditions as he may determine for the disbursement of the grants, and that no court application was necessary for this.

AHPETC Manages Cash Flow to Continue Its Operations

Next, I turn to the circumstances facing AHPETC in FY 2014/15 and how it has managed to continue its operations to deliver services to residents.

When MND wrote to AHPETC on 28 April 2014 on its intention to withhold the operating grant ($7.1 million) for FY 2014/15, it indicated that it would do so until the conclusion of the audit by the AGO.

At the time of MND’s letter of 28 April 2014, the AGO audit had just commenced the previous month (March 2014). It was not clear how long the AGO audit would take. As such, AHPETC decided it was premature to reply to MND on the issue, but should continue to devote resources to the audit and monitor AHPETC’s cash flow situation.

By mid-June 2014, it was still not clear how long more the AGO audit would take, and correspondingly how long more the S&CC operating grant would be withheld. As further delays would affect cash flows, I wrote to MND calling for release of the grant, and subsequent correspondences followed.

Specifically, MND was also made aware on 30 July 2014 that AHPETC would not be able to make the quarterly transfer to Sinking Funds for the first quarter of FY 2014/15 on time, by 31 July 2014.

It was the utmost priority that essential services to residents not be disrupted while the grant was withheld. AHPETC thus prioritized the continuity of operations and ensuring cash flow for routine activities. It deferred its quarterly Sinking Fund transfers, which enabled interim management of cash flow through retention of more funds in its Operating Funds.

Despite AHPETC’s ability to manage its operations in the interim in this way, AHPETC would still require the operating grants to fulfil its obligations under the Town Councils Act e.g. to complete the quarterly Sinking Fund transfers.

Why AHPETC deferred the Offer of Half-Grant

On 7 October 2014, MND wrote to AHPETC to offer to release half the operating grant to AHPETC subject to certain conditions. The option was considered carefully right up to November. By then, much progress had been made on the AGO audit, and it appeared that the conclusion of the audit was imminent. Furthermore, to ensure continuity of operations, AHPETC had decided to earmark the entire sum of the grant, which was withheld, as part of its Sinking Fund transfer for FY 14/15, while it continued to make the quarterly Sinking Fund transfers when it could.

As AHPETC’s understanding was that MND would consider whether and / or how it would release the entire operating grant upon conclusion of the AGO audit, and the conclusion of the AGO audit appeared imminent, AHPETC decided to defer the decision on the half-grant. AHPETC then wrote to MND on 12 Nov 2014 that it was assessing the situation and would come back to MND should it wish to take up the option of the half-grant.

AHPETC continued with its interim strategy to manage cash flow while continuing to devote resources to the AGO audit, which was completed end January 2015. The AGO report was released on 9 February 2015 and debated in Parliament on 12-13 February 2015. Parliament was engaged in the Budget and Committee of Supply Debates till 13 March 2015. MND commenced its court action against AHPETC a week later, on 20 March 2015.

AHPETC’s Position in Court Case

It is useful to briefly summarise AHPETC’s position in the court case commenced by MND.

Regarding the grants for FY 14/15 and FY 15/16 which have not yet been received, AHPETC’s view is that the Town Councils Act enables the Minister to impose reasonable conditions on the disbursement of the grants as he may determine. A court application is not needed for the same.

As for the proposal to appoint independent accountants to inquire into past transactions, AHPETC is advised that the legal basis for such a court order is questionable. AHPETC also does not believe that there is factual justification to mount an oppressive fishing expedition.

The arguments have been presented in Court and we await the verdict of the Court.

AHPETC will Prioritise Continuity of Services

News reports have generated concern about AHPETC’s ability to continue to operate. AHPETC hopes to receive the operating grants soon. In the meantime, AHPETC will continue to prioritize its operations to avoid disruption of services to residents.

SYLVIA LIM
CHAIRMAN
ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL

14 May 2015

Source:www.ahpetc.sg

May 15, 2015
Andrew Loh: Are Actions On AHPETC Really Not Political?

If you haven’t been following the AHPETC vs MND court case, it is like this, in a nutshell:

MND wanted to appoint an independent accountant to oversee AHPETC’s spending of S&C grants. MND laid out some terms. AHPETC agreed to all the terms, except one – that PriceWaterhouseCoopers (PwC) not be the accountant, which is what the MND wants.

AHPETC explained that this is because PwC was also the auditor engaged by the AGO to go through AHPETC’s account during the AGO audit.

A potential for bias, AHPETC said. This is indeed a reasonable concern. AHPETC suggested having a retired judge or a senior counsel appoint the independent accountant instead.

AHPETC made all these suggestions in a letter to the MND on 29 April.

But MND refused, and preferred to take AHPETC to court.

I think you can judge for yourself if all this is not political and a waste of everyone’s time.

Source: Andrew Loh

May 6, 2015