SINGAPORE — Former Workers' Party chief Low Thia Khiang admitted on Tuesday (Oct 16) that he had not done his duty as a “responsible town councillor”, and had not exercised due diligence in coming to the decision to replace his town council's managing agent with a firm set up by the party's supporters.

Taking the stand as the first defence witness, Mr Low made the concessions when pressed by Senior Counsel Davinder Singh on whether he had checked the agreement to see if former managing agent CPG Facilities Management was entitled to get out of the contract before deciding to release it from its duties.

Mr Singh, who is acting as the lawyer for Pasir Ris-Punggol Town Council (PRPTC) — one of the two plaintiffs in the lawsuits — said Mr Low had “jumped at the chance” to get CPG out, and had placed the interests of his own supporters before that of his residents.

In a three-hour cross-examination that saw multiple fiery exchanges between both parties, Mr Singh charged that — among other things — Mr Low did not do his “due diligence” as a “responsible” Member of Parliament (MP) in assessing whether the town council should remove CPG and appoint FM Solutions and Services (FMSS) as Aljunied-Hougang Town Council’s (AHTC) new managing agent.

Mr Low, two of his fellow MPs, two town councillors, FMSS, and the husband-and-wife team behind the firm are being sued by PRPTC and an independent panel acting on behalf of AHTC, which want them to account for over S$33.7 million paid to FMSS between 2011 and 2015.

LOW’S ACCOUNT ‘ALL A FABRICATION’: LAWYER

Mr Low had testified in his 48-page affidavit that when WP won the Aljunied Group Representation Constituency (GRC) in the 2011 General Election, he knew he had a “clear” and “huge” challenge on his hands.

WP needed to find a dependable managing agent to help it run the new GRC, which is four times the size of Hougang Single Member Constituency — which has been run by WP since 1991 — with more than 40,000 public housing dwelling units.

Explaining his rationale for setting up FMSS, Mr Low testified that it could not be any managing agent as a town council with “poorly motivated staff or a disinterested managing agent would perform poorly”.

“This would damage the reputation of the MPs running it,” he said.

None of the three companies — EM Services, CPG Facilities Management, and Cushman & Wakefield — which had been managing town councils for incumbent People’s Action Party (PAP) wards for many years, wanted to take on the job, added Mr Low.

But Mr Singh charged that the account was “all a fabrication”.

“Far from doing due diligence, far from CPG telling you that they didn’t want to continue, far from doing an assessment, far from reading (CPG’s) contract, you have already decided with your fellow elected MPs that you were going to change to a new managing agent,” said Mr Singh as he cross-examined Mr Low.

“Your entire case is that CPG wanted out, so it wasn’t reasonable for (you) to ride an unwilling horse, it is all a fabrication,” Mr Singh added.

Mr Singh pointed to an May 9, 2011 email that Mr Low had sent to the elected MPs, which had copied Ms How, secretary and general manager of the self-managed Hougang Town Council, two days after WP won Aljunied GRC in the May 7, 2011 poll.

Mr Low wrote in the email that he had told Ms How about their decision to merge the Hougang and Aljunied town councils, and that “we will appoint (a) managing agent to manage the town instead of self-management”.

FMSS was incorporated six days later on May 15, 2011 by Ms How’s husband, the late Danny Loh. He had provided Essential Maintenance Service Unit (EMSU) services to Hougang when the Housing and Development Board decided to stop providing EMSU services to all town councils in the mid-1990s.

Citing records from the Accounting and Corporate Regulatory Authority showing that Loh had applied to set up FMSS on May 12, Mr Singh put it to Mr Low that as early as May 9, 2011, the first working day after the elections, “you have sealed CPG’s fate”.

“You have decided to get rid of CPG, and to appoint a company which Ms How would be involved as the managing agent of the town,” he said.

When Mr Low disagreed, Mr Singh pointed to the email, where Mr Low said there was feedback that CPG had gone into inactive management of some contracts and some areas were poorly maintained. Mr Low said in the email that they “may have to take over the management earlier or risk residents suffering from poor service”.

When Mr Singh asked Mr Low if “earlier” meant “faster than planned”, the latter said he understood there was a contract, and that they would replace the firm if it did not perform its duties.

When queried if he had asked for a copy or reviewed CPG’s contract, Mr Low said he could not recall, as Mr Singh pointed out that the WP MP did not review the contract before sending out the email on May 9.

“An honest town councillor would go through in his mind a series of due diligence questions,” said Mr Singh, who added that town councillors could only come to a conclusion that is in the residents’ interests only after undergoing that process.

When asked if he had done this exercise, Mr Low said he did so “later on”, although he could not recall when he reviewed CPG’s contract. During the exchange between both men, Mr Low admitted that no one had briefed him on the contract, nor did he ask for an assessment to be done on CPG.

He was also unaware if his fellow MPs, Ms Sylvia Lim and Mr Pritam Singh — who are also defendants in the lawsuit — had asked for an assessment of CPG.

Mr Singh also questioned Mr Low on the two parties which had expressed interest in providing managing agent services. Mr Low had rejected them as he pointed out that they were involved in facilities management, which was “far from managing townships”.

The lawyer put it to Mr Low that he had not done his due diligence as he had not checked on the two companies’ staff numbers and experience, as “FMSS was a done deal”.

MANAGING AGENT CPG ‘WANTED OUT’: LOW

Mr Singh and Mr Low crossed swords over the latter’s claim that CPG had “wanted out” of managing the town council.

Mr Low said there was no negotiations with CPG because the firm had indicated it did not want to continue.

“So, if someone says they want out…you kick them out?” said Mr Singh.

“Then? What is there to negotiate?” Mr Low rebutted. “They practically cut off the line to show that they didn’t want.”

Mr Singh then fired back: “Surely a responsible town councillor would check the (agreement) before deciding to release the party?”

Mr Low told the court that he did not check because of “the situation we were facing”.

Mr Singh charged that Mr Low did not do so to “give you the opportunity to fulfil your plan” to have FMSS replace CPG.

Mr Low’s swift response drew chuckles from the public gallery, as he said: “I disagree. That is your own story.”

Mr Singh then charged that Mr Low had “put your political supporters ahead of your resident’s needs” as he had not asked if they were entitled to damages if CPG wanted to end the contract.

“You jumped at the chance when it fell on your lap,” he added.

‘RECKLESS’ AND ‘REMARKABLE’

Mr Singh also quizzed Mr Low about the need to set up a separate company, FMSS, when Ms How — who was already working for Mr Low at Hougang Town Council — could have her contract moved to the new AHTC.

Ms How and Mr Loh were “reluctant” to form the company when first approached by Mr Low, added the lawyer. The setting up of a new company would involve a “profit element”, he added.

When Mr Low said it was not his concern whether FMSS made a profit, and that he did not know CPG's or FMSS’ cost structures, Mr Singh replied that he found it “reckless” and “remarkable” as “you used residents’ monies to give the new managing agent a higher cost”.

Mr Singh said Mr Low had failed to take into consideration residents’ best interest by allowing CPG to end the contract despite knowing it would be a “huge challenge” to move from managing 10,000 to 50,000 dwelling units.

“This decision of you and your elected members was done despite knowing… it would be a herculean task, despite knowing that CPG was experienced and had all the ability to perform, despite knowing that you had not read the contract, understood the terms, known the rates,” he said.

“But that does not matter to you (or your fellow defendants) because you were going to get rid of CPG at all costs.”

Mr Low disagreed, but Mr Singh charged: “Residents expected you to watch their money, to make sure that you act lawfully, you act prudently, you don’t cut off an experienced, longstanding managing agent without due diligence, but none of that mattered.

“You have come to this court to talk about politics, but what you are doing is putting politics above the residents.”

Mr Singh’s cross-examination of Mr Low continues on Wednesday.

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