WP says AHPETC cannot determine ex-agent's profit margin

Singapore

IT WAS a weekend of verbal sparring between the ruling People's Action Party and the Workers' Party (WP) over the accounts linked to the Aljunied-Hougang-Punggol East Town Council (AHPETC) yet again, with the issue set to take a life of its own in this year's elections.

This comes as AHPETC will show a surplus for its FY14/15 accounts, reversing from its deficit position, the opposition party said. Submission of the audited accounts will be made on Monday, it added.

Unlike before, the party said it would meet the deadline this time.

The latest squabble over the issue saw attention turning to the returns made by AHPETC's former managing agent, FM Solutions and Services (FMSS), with the Ministry of National Development (MND) describing FMSS as "grossly profiteering off its sole client, AHPETC", and that the town council had overpaid. This claim got a swift rebuttal from WP, with the party claiming it has no control over FMSS' profits.

MND on Saturday released figures showing that FMSS posted a post-tax profit of more than S$2 million in the fiscal year 2013/2014. While its profit has about quadrupled from the same period a year ago, FMSS' revenue was up by just 30 per cent in the same time. FMSS was appointed by AHPETC from July 2011, but stopped its services to the town council from July this year. AHPETC will now be self-managed. FMSS' main shareholders were the late Danny Loh and his wife, How Weng Fan. The company was incorporated seven days after WP won the Aljunied ward.

In addition to being the managing agent in that period, FMSS had its two main shareholders holding town council positions as secretary and general manager, respectively then. FMSS was the only bidder in the open tender called by AHPETC.

MND also pointed out that four FMSS directors earned fees of S$3.2 million in FY13/14. A year ago - and less one director - total fees were about half of that. MND did not show data for director fees or profits from other town councils' managing agents.

Hougang incumbent Png Eng Huat, who introduced the party's new candidates to the media on Sunday, told reporters that the AHPETC cannot determine the profit margin of FMSS. This was also touched on in WP chairman Sylvia Lim's response to MND. In her letter on Saturday, she also said she was appalled at the series of "careless accusations".

Ms Lim, also present at Sunday's introduction, said remuneration was an internal matter for FMSS. She added that the FMSS contract had been audited by the Attorney-General's Office (AGO). "There has been no finding by the AGO or anyone that we did not exercise due diligence in our assessment of the contract price," she said.

"This is just an example of how such a dominant ruling party as the government can use government departments to make political attacks on their political opponents," she added. "This town council episode shows how the huge machinery can try to eat you up."

On whether the party could take care of another group representation constituency's (GRC) town council, Ms Lim said AHPETC has gained awareness of issues linked to a handover. She would not say if WP now has a "B team" - a reference to the "A team" fielded in Aljunied some four years ago.

National Development Minister Khaw Boon Wan hammered in MND's point Sunday morning: "Now that they have sacked FMSS...they have to recruit their own GM and secretary. Are they also rewarding them S$3 million a year since they think S$3 million is fine?"

Mr Png said AHPETC will turn in a surplus for its FY14/15 accounts, when the withheld government grants of S$7.2 million are included. The town council has also raised revenues and cut costs, such as in reducing energy bills. AHPETC's FY13/14 accounts were filed 10 months late.

On the disclaimers from auditors, Mr Png claimed "a substantial number" of them were "sort of removed".

The PAP handed over a ward with an operating surplus, but WP has said that it now serves a bigger population base after Aljunied's town council was merged with that of Hougang. It also chalked up significant lift maintenance costs. AHPETC ran a deficit for two fiscal years.

MND had highlighted in November last year that the arrears rate for service and conservancy charges at AHPETC was 29.4 per cent in April 2013. The typical rate was about 3 per cent.

WP introduced four new candidates on Sunday. They are shipping law firm partner Dennis Tan, 45; in-house legal counsel Gurmit Singh, 55; former associate librarian Mohamed Fairoz Shariff, 36; and Singapore Cancer Society manager Kenneth Foo, 38.

Meanwhile, the Singaporeans First (SingFirst) Party, which will be contesting in Tanjong Pagar and Jurong GRCs, has formed teams "likely to compete" in the upcoming election, The Straits Times reported.