SINGAPORE — Aljunied-Hougang Town Council (AHTC), run by the Workers’ Party, said it will comply with the Government’s order to strip two of its town councillors, Ms Sylvia Lim and Mr Low Thia Khiang, of authority from handling some financial matters.

In a letter to the Ministry of National Development on Friday (Jan 17), which AHTC uploaded to its website, the town council said it will comply with the order so as to “focus energies” on running the town council, even though it questioned the “propriety” of the move.

Adding that it was “surprised” by what it saw as a shift in the Government’s position, the letter noted comments made earlier by two Cabinet ministers in Parliament stating that the town council had jurisdiction to decide whether Ms Lim and Mr Low should be recused from financial matters, and that the relevant provision under the Town Councils Act may not be retroactively applied.

The MND had issued the order under Section 43D the Town Councils Act on Jan 3, requiring AHTC to remove the duo’s ability to act on behalf of the town council to unilaterally approve or incur expenditure, or to accept or waive any contracts for stores, services or works, and serve as cheque signatories for AHTC.

The order came after the High Court ruled in October last year that WP leaders were liable for damages suffered by the AHTC and the Pasir Ris-Punggol Town Council. In particular, the judge found that Ms Lim and Mr Low had breached their fiduciary duties to the AHTC and had acted dishonestly, and without integrity or candour.

AHTC’S EARLIER REASONS FOR NOT REQUIRING MPS’ RECUSAL

AHTC noted in its statement that on Dec 4, the MND had written a letter to the town council to request for information on its reasons for not requiring Ms Lim and Mr Low to recuse themselves from AHTC’s financial matters.

The MND had also asked whether AHTC intended to implement other interim measures or safeguards if Ms Lim and Mr Low were to continue to be involved with AHTC’s financial affairs.

AHTC then outlined its response to the MND, dated Dec 13, in which it explained the reasons for not requiring the recusal of Ms Lim and Mr Low from all matters relating to, and oversight over, financial matters at AHTC.

For example, the town council had concluded that  Ms Lim and Mr Low had not benefited personally from the award of contracts without tender — one of the charges that they had faced in court.

AHTC added that it had also explained to the MND the internal control procedures it had in place, including the hiring of an independent internal auditor for the past two years and ensuring a segregation of duties among town council members.

“With the above internal control procedures in place, AHTC is of the view that there are sufficient checks and balances in place,” the town council said in Friday’s statement.

“We are thus surprised that the Minister, in a letter dated 3 January 2020, invoked Section 43D(2) of the Town Councils Act. This is a shift by the government from its earlier position in Parliament.”

After the High Court’s ruling, Parliament moved a motion to call on AHTC’s chairman Faisal Manap to recuse the duo from financial matters, but in its own internal meeting, AHTC voted to keep Ms Lim’s and Mr Low’s authority.

In a letter to the MND, AHTC chairman Muhamad Faisal Abdul Manap noted that during the Parliamentary debate, the Second Minister for Finance Indranee Rajah had affirmed that it was the town council who had jurisdiction to decide whether Ms Lim and Mr Low should be recused from financial matters, and that Parliament was not in a position to compel AHTC to take any action.

He also noted that a Nominated Member of Parliament had also asked during the debate why the Government was asking Parliament to pass a resolution that would have no legal force, when the Minister for National Development could conceivably use his powers under Section 43D of the Town Councils Act.

Mr Faisal added that in response to this question, Second Minister for National Development Desmond Lee had said that Section 43D was passed years after the actions taken by Ms Lim and Mr Low in 2011 which had led to the court case.

Mr Lee had also said that Section 43D gave powers to the minister to act after a report or compliance review had been undertaken under the Act, or after an investigation, Mr Faisal noted.

“We share these opinions of the minister that Section 43D is not applicable to the facts due to concerns about retroactivity and the pre-conditions not being met,” AHTC wrote in its letter to the MND.

“We are thus doubtful of the propriety of the Rectification Order issued under Section 43D(2).”

Despite these reservations, AHTC said it wishes to “direct its energies towards fulfilling its core functions of managing and maintaining the HDB estates in Aljunied-Hougang Town for our residents”.

As such, it has complied by taking these steps:

• Ms Lim has been removed from being an authorised officer to unilaterally incur or approve expenditure on behalf of the town council.

• Ms Lim is no longer authorised to unilaterally accept or waive any quotation or tender for any stores, services or works on behalf of the town council

• Ms Lim’s and Mr Low’s votes at committee meetings involving procurement and expenditure will not be taken into account.

• The town council will pass a resolution at its next meeting in February to remove Ms Lim and Mr Low as cheque signatories. In the meantime, AHTC will not present cheques to them for signing.

In response to media queries, the MND said: "With regard to AHTC’s concerns about the propriety of the Order, we would like to assure AHTC that the Order was made after careful consideration and legal advice was duly sought. It is appropriate given the serious nature of the Oct 2019 High Court Judgment."

WP has stated that it will appeal the High Court’s judgment.