SINGAPORE – The Ministry of National Development (MND) said on Tuesday that it may consider regulatory action on the Workers’ Party-run Aljunied-Hougang Town Council (AHTC) amid court findings in July that WP chief Pritam Singh, chairman Sylvia Lim and former chief Low Thia Khiang did not act in good faith in the discharge of their duties as town councillors.

The ministry added in a statement that it has asked AHTC about its next steps, given the findings.

Specifically, the MND wants to know about the duties and powers of Ms Lim and Mr Singh over payment and procurement processes, and what action AHTC intends to take in relation to the two WP leaders, if any.

In 2020, after the High Court in 2019 found the WP leaders accountable in a civil suit brought by AHTC, the MND issued an order requiring AHTC to restrict the powers of Ms Lim and Mr Low in making financial decisions.

On Tuesday, MND said it has cancelled the order, but added that it may consider further regulatory action pending clarification from AHTC about what it intends to do regarding the July court findings.

“Upon receiving AHTC’s response, the (Minister for National Development) will consider whether further regulatory action under the Town Councils Act is required to safeguard public monies entrusted to the town council,” added MND.

The town council had taken the three WP leaders, as well as town councillors Chua Zhi Hon, Kenneth Foo, How Weng Fan and Danny Loh, to court over $33.7 million in improper payments made under their watch.

Ms How and her husband Loh, who died while on holiday in 2015, were also the owners of AHTC’s then managing agent FM Solutions and Services, which was found to have received the bulk of the improper payments.

The rectification order issued in 2020, under Section 43D(2)(b) of the Town Councils Act, mandated that Ms Lim and Mr Low should not have the 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; and serve as cheque signatories for AHTC.

Mr Low stepped down from politics in 2020 and is no longer a town councillor.

Responding to queries from The Straits Times, MND said it had issued the 2020 order as Ms Lim and Mr Low did not recuse themselves from financial matters at AHTC, despite the High Court’s findings in 2019 that both of them had breached their fiduciary duties to the town council.

The Court of Appeal in November 2022 and July 2023 subsequently ruled that the two WP leaders did not owe fiduciary duties to AHTC.

Upon review of these findings, National Development Minister Desmond Lee decided to cancel the rectification order with immediate effect, said MND.

In the latest development in the long-running case, the Court of Appeal in July 2023 found Mr Singh not liable for negligence in the AHTC payments process.

The apex court however, held that he, along with Ms Lim, Mr Low and other town councillors, did not act in good faith in implementing a system of payment processes that led to the misuse of town council funds.

It also found Ms Lim liable for a contract awarded by the town council to Red-Power Electrical Engineering.

Referring to the Court of Appeal findings in July, MND said on Tuesday: “This is a serious finding. They did not act in good faith in the payment processes of AHTC.

“The Court of Appeal also found them to be grossly negligent. They allowed the managing agent, FM Solutions and Services, to pay monies to itself, and others, without proper controls. Monies could be paid, even if work was not done, or not properly done.”

MND added that the Court of Appeal also found that Ms Lim was responsible for a contract to Red-Power at rates that were “four to seven times higher” than those offered by the then existing vendors Digo Corporation and Terminal 9.

Any damages to be paid by the WP leaders and town councillors will be assessed in a second tranche of the trial.

MND noted that, despite the findings, Ms Lim and Mr Singh remain as AHTC town councillors.

Ms Lim is a member of the town council’s audit committee and the estate and community liaison committee, while Mr Singh, who is also Leader of the Opposition, chairs the public relations committee and is a member of the tenders and contracts committee, and the estate and community liaison committee, said MND.

“(Thus), they may continue to be involved in implementing and/or monitoring AHTC’s payment process, as well as make procurement decisions,” it added.

“This was why MND has requested information from AHTC on the involvement of Ms Lim and Mr Singh in AHTC’s procurement and payment processes and other actions the TC intends to take, even as the minister has cancelled the rectification order.”

The Straits Times has contacted AHTC for comments.