SINGAPORE - Minister for National Development Lawrence Wong has issued an order requiring Aljunied Hougang Town Council to restrict the powers of Workers' Party MPs Sylvia Lim and Low Thia Khiang in making certain financial decisions at the town council.

The Ministry of National Development (MND) said in a statement on Friday (Jan 3) that this was to guard against a repeat of the financial irregularities at the town council which were caused by the duo. As elected MPs of Aljunied GRC, they also serve as town councillors in AHTC.

The rectification order under section 43D(2)(b) of the Town Councils Act mandates that they shall not have authority to:

- unilaterally incur or approve expenditure on behalf of AHTC

- unilaterally accept or waive any quotation or tender for any stores, services or works on behalf of AHTC

- serve as cheque signatories for AHTC

MND added that this does not affect the other functions and duties of Ms Lim and Mr Low at AHTC and they can continue to discharge their duties as elected members of the town council, including taking part in discussions and voting as part of committees.

AHTC said it has received MND's order and is reviewing it.

According to clauses 43D(4) and 48A(1) under the Town Councils Act, the town council can be fined up to $5,000 for not complying by the deadline, and $50 every day if it continues to ignore the notice after conviction.

The chairman or secretary of the town council can also be subject to the same fine, plus a jail term of up to 12 months.

The order comes after Parliament voted in favour of a motion in November calling on Ms Lim and Mr Low to recuse themselves from all financial matters at AHTC.

This followed a High Court verdict in October which found the two WP MPs had breached their fiduciary duties and also acted dishonestly in hiring a managing agent without calling a tender. The two are challenging the High Court's decision.

Deputy Prime Minister Heng Swee Keat, who introduced the motion in November, had said the opposition must hold itself to the same standards that it rightly applies to the Government.

In response, Ms Lim said Mr Heng's motion was "premature", disclosing that she and her fellow WP MPs planned to file an appeal against the judgment.

AHTC later discussed the issue of recusal at its quarterly meeting and voted 17 to 1 against it.

The MND, which oversees town councils, then asked AHTC to explain its decision and also asked if it intended to implement other interim measures or safeguards. AHTC responded on Dec 13.

In its statement on Friday, MND said it had carefully considered AHTC's letter.

"We note that the reasons provided by AHTC for not requiring Ms Lim and Mr Low to recuse themselves from all of AHTC's financial matters do not relate directly to, and more importantly, do not detract from the grave and serious Court findings on Ms Lim's and Mr Low's conduct," added the ministry.

"Further, while we note the measures that AHTC has put in place, it is not apparent - and AHTC has not demonstrated - how they would be effective to guard against a recurrence of irregularities arising from the acts of dishonest Town Councillors."

The ministry said that it would review the order after the Court of Appeal hears and decides on the appeal against the High Court judgment.

Besides Ms Lim and Mr Low, WP chief Pritam Singh and five other parties were also held accountable for improper payments made by AHTC in the civil case brought against them by the town council, which was seeking damages over a sum of $33.7 million.

High Court Judge Kannan Ramesh said in a judgment released on Oct 11 that Ms Lim and Mr Low had breached their fiduciary duty towards the town council, while Mr Singh, Mr Kenneth Foo and Mr David Chua Zhi Hon had breached their duties of skill and care.

The case centred on their role in awarding contracts to FM Solutions and Services (FMSS) and FM Solutions and Integrated Services (FMSI) without calling for tenders.

Pasir Ris-Punggol Town Council had also sued to recover its share of losses incurred when Punggol East constituency was run by AHTC from 2013 to 2015.

Almost all parties are appealing against the judgment, save for AHTC.