Auditor-General's Report on Audit of Aljunied-Hougang-Punggol East Town Council (AHPETC)

How much would be the total amount paid to FMSS in this way from May 2011 up till now? It will obviously be more than $6.6 million. If similar payments were made in other years, then it would not be much less than $20 million. We do not know the full amount because there has been no audit for the period from May 2011 to January 2015.

This process is unacceptable. It is also unlawful.

It is a common practice across Singapore that when a Town Council engages a Managing Agent, a major part of the Managing Agent's contract is to provide the Town Council with its key management personnel to supervise the running of the Town Council day to day. We would thus naturally expect the Town Council's key management personnel – its Secretary,

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General Manager, Deputy General Managers – to be employees of the Managing Agent.

MND does not prohibit this. MND has allowed it in response to Town Councils' feedback. However, in all these 25 years, in no other Town Councils, except AHPETC, are the Secretary, the General Manager, the Deputy General Managers of the Town Council not just employees of the Managing Agent, but also complete owners of the Managing Agent. Their ownership interests and control of the Managing Agent are what distinguish AHPETC from all other Town Councils. That makes any transaction between the Town Council and FMSS and FMSI a related-party transaction that has to be disclosed under the Financial Reporting Standard (FRS).

I heard with some interest Mr Chen, who has considerable experience, saying there are no standards. I think Mr Chen has overlooked FRS. FRS sets out what ought to be disclosed. The only difference is that AHPETC acted in breach of FRS. Everybody else complied with FRS. So, there are no new standards to look for. The standards are there. One just has to follow the rules.

The ownership and control of the Managing Agent, in the case of AHPETC, are what distinguish that Town Council from all other Town Councils. That makes any transactions between the Town Council and FMSS or FMSI a related party transaction. And under FRS, if someone is a General Manager or Secretary of the Town Council and, at the same time, employed by the Managing Agent, that is not considered a related-party transaction, unless that person has control or joint control of the Managing Agent. In all other Town Councils, no one had such control and the auditors raised no queries. For AHPETC, its own auditors raised queries, which the Town Council refused to answer.

This is not a question of negligence. This is not a question of inexperience. When employees do not own the MA, they cannot be said to have a serious personal financial interest in each such transaction. But with AHPETC, the position was different. The Managing Agent was owned by Loh, Ms How and Yeo. The payments they were verifying and approving on behalf of the Town Council were going directly into their own pockets. This is not a theoretical conflict of interest. It is a real conflict. Husband and wife were issuing invoices on behalf of their own company. They were often verifying, on behalf of the Town Council, the work done by themselves. They were also certifying, on behalf of the Town Council, the payments to their own companies. The wife was then approving, on behalf of the Town Council, the cheques for payment to their own companies, and the husband was then signing the Town Council's cheques for payments to themselves. I think Mr Chen will accept that this is unacceptable. You do not need an FRS to know that this is contrary to the law.

This arrangement was designed deliberately. It was not accidental. It is with a husband-and-wife team who are hard-core supporters of the Workers' Party and close to some of the

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Workers' Party Town Councillors. They must have been highly trusted; they were the assenter and proposer for the Workers' Party in the General Elections of 2006. The conflict of interest is apparent, real and serious. No Town Councillor who knew of this structure could have approved this structure lawfully. It is not capable of being approved in law. It is unlawful. And it would have been a serious breach of fiduciary duties for any Town Councillor to have approved this process.

During the AGO audit, the Town Council responded on this related-party transaction. It said, "Well, most of the payments were pre-agreed by contract". That is what Ms Lim told this House today as well. And the cheques were countersigned by the Chairman or Vice Chairman. With respect, these are non-answers. The payments may have been pre-agreed by contract but were the services being provided, let alone provided properly? Payments are being made for services. Who was checking on the services for which the millions were being paid? And the cheques being countersigned, what does that mean? What were the checks done for each payment? It is all quite unacceptable and unlawful.

When pointed out, instead of accepting that this is unlawful and unacceptable, there is now an attempt to confuse and evade. So, serious questions remain unanswered on payments.

I have said I will highlight two ways in which payments were made to FMSS, amongst several. Let me deal with the second way in which the Town Council was run for the benefit of FMSS. That was by inflating the Managing Agent fees paid to FMSS.

The Town Council decided to pay significantly higher Managing Agent fees to FMSS, compared with all other Town Councils. The total MA fees paid by the Town Council to FMSS were nearly $22 million for over four years. Mdm Speaker, may I ask for the next annex to be handed out, please?

A comparison of the Managing Agent rates in Singapore for 2014-2015 will be shown in this table. It is quite an important table. Members will be shocked by it and, therefore, I will wait for it to be distributed before I continue.

If Members look at this, you can see from this annex that FMSS charges the Town Council $14.92 for each commercial unit, compared with between $4.80 and $6.65 for all other Town Councils. Is this inexperience? Is this oversight? Is this a case of playing the victim, coming here and saying we are all victims of a political conspiracy? This is what you decided

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to pay. Small businesses in Aljunied were charged much more to pay FMSS. Likewise, FMSS charged the Town Council $7.43 for every residential unit. Others charge between $4.80 and $6.65.

And from July 2014, FMSS increased its rates even more. The rates are now $15.82 and $7.88. The commercial unit rates and Managing Agent's fees are now more than double what everyone else has charged. If you take the weighted average of MA fees paid by other Town Councils, it is $5.72 per unit for both residential and commercial units. The difference, therefore, on an annual basis, between what the Town Council paid FMSS and what others pay their Managing Agents is about $1.6 million every year.

That is not the profit. That is just the difference. Obviously, everybody else makes a profit, too. So, this $1.6 million is on top of the profit that FMSS was making. You can compare the rates any way you like. Weighted average; you can compare it with Tampines, which is comparable; you can compare it with Chua Choa Kang, which has got a similar number of units. Whatever way you slice it, Aljunied pays far more to FMSS. What justifies this?

The rhetoric from the Workers' Party is always about helping the poor man. The reality is that the Workers' Party took money from the man-in-the-street to give to their friends in FMSS. Mr Low and Ms Lim keep saying there has been no loss. Maybe there was no one taking money through the backdoor in the dark of the night. There was no need because the money was taken from the front door in broad daylight. Through all this overcharging – $6.4 million over four years on this calculation, overcharging on managing agent's fees. Another $6.6 million taken out in just one year through an unlawful process. There might be an overlap between the two sums because part of the $6.6 million would be for MA fees. And there must have been much more.

I will now deal with the second major problem arising from the facts, which is lack of transparency and lack of disclosure. Ask yourself: should the full facts have been disclosed to all the Town Councillors? Should the process have been discussed? Should the risks have been considered? Should the safeguards have been thought about?

The answers to these questions might appear obvious. The behaviour of a party which claims to champion transparency and accountability was shocking. First, the facts do not seem to have been fully disclosed to all the Town Councillors. Second, there seems to have been no proper discussion of the conflicts at all.

Let me deal with the non-disclosure first. If Members look again at Annex 4 that was handed out earlier, the fact that Loh, Ms How and Yeo owned FMSS – that is obviously

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important. You would expect it to be disclosed and discussed at the Town Council meeting. But strangely, there are no minutes of Town Council meetings where any such disclosure is recorded. Instead it gets very curious. The minutes show that between August and September 2011, the Town Councillors were given limited disclosure. They were only told that Loh and Ms How were directors and employees of FMSS. Very odd. It was felt necessary to tell the rest of the Town Councillors that Ms How and Loh were directors and employees of FMSS, but not reveal the more important fact that they were not just employees and directors but also the owners of FMSS.

PwC asked the Town Council why was there no record of Loh, Ms How and Yeo's ownership being disclosed and discussed at the Town Council meeting. The Town Council says, "Oh, everyone knew the ownership structure of FMSS."

Really? Every Town Councillor knew? Then, why did the Town Council make the curious decision to only record that they were directors and employees and not record their ownership of FMSS and FMSI? What was there to hide about the ownership? Why record only some of the less important facts and omit the most important fact?

And there is no reference whatsoever in the minutes to FMSI, that it was owned by Loh. FMSI got contracts worth $29,400 per month for five years – October 2007 to June 2012. And Loh's ownership was not mentioned or recorded?

Obviously, some of the Town Councillors would have known that Loh and Ms How owned FMSS. Could Ms Sylvia Lim not have known? She was the Chairman of the Town Council. So, did she tell the other Town Councillors? What exactly did she tell? Were the ownership details recorded or revealed?

Beyond this limited disclosure, there is nothing else in the Town Council minutes. And over the years, there was no further disclosure of the interests. Nothing. Despite the many contracts and millions that were given to FMSS and FMSI.

Now, let me deal with the second major problem on transparency, the discussion on conflicts, or rather, the absence of discussion on conflicts. Surprisingly, there seems to have been no record of any discussion whatsoever by the Town Council on the process that you see outlined in Annex 4 where they pay themselves, that almost every aspect of the payment process would be controlled by FMSS. Nothing disclosed, nothing discussed.

Again, some Town Councillors must have known about the process and they must have approved it. Could Ms Sylvia Lim, as Chairperson, not have known? Why did she not discuss

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it with all the other Town Councillors? There is no record that she did so.

In response to queries by PwC as part of the AGO audit, what response did the Town Council give? Just guess. Instead of answering the questions, they said, "This is not within your remit to ask."

That is an evasion; it is not an answer. The auditor asks you serious questions and your response is, "You are not entitled to ask me these questions." Why does the Town Council not give proper answers instead of playing hide and seek? What are you hiding?

This is not negligence. It is an active decision to suppress. It raises the issue of integrity. The issue of integrity is raised right through. This pattern of non-disclosure and murkiness has been a constant and troubling feature.

One, as we saw, the Town Council minutes suggest that the Town Councillors were not given the full details on FMSS. Or if they were given the details, then someone decided that only the less important parts should be recorded.

Two, there seems to have been no discussion at Town Council meetings of the actual process. There is no record that this took place, how FMSS would be supervised and how the risks will be mitigated.

Three, the Town Council's own auditors, Foo Kon Tan, queried them on transactions with FMSS. The Town Council failed to answer them. As a result, Foo Kon Tan qualified their audit report and said "the Town Council had not made available to us details of the project management service fees paid to a related party. Accordingly, we are unable to determine the completeness of the related-party disclosures". These are your own auditors. The Town Council refused to give information to its own auditors and you keep talking about transparency.

And the Town Council failed to disclose the details of its contracts with FMSS in its FY2012/2013 accounts. And so, the report went on to say, "AHPETC did not disclose fully the related-party transactions in its financial statements." This was in breach of the Singapore Financial Reporting Standards (FRS). Again, Mr Chen, the rules are all there. You just need to comply with them.

The FRS requires disclosure of related-party transactions in financial statements. The pattern of non-disclosure is obvious.

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And the Town Council also refused to give details to PwC, which was requested as part of the AGO audit, and I quote from the AGO report, "we noted that AHPETC has entered into a number of RPTs whereby substantial sums were paid to related parties in FY2012/2013. The Town Council ("TC"), despite repeated requests, did not provide us with all the critical documents relating to these transactions."

I quote again, "Since the commencement of our review in April 2014, we have made various requests for documents from AHPETC as part of our review of selected transactions. In our view, these documents (such as documents which record the proper disclosure and consideration of RPTs) ought to exist as a matter of record. Notwithstanding numerous requests and reminders, AHPETC did not provide a number of the requested documents."

Right through, active, persistent non-disclosure. Obviously deliberate. And the consequence of all of this? Of the millions that were paid to FMSS, who knows how much was justifiable?

That brings me to the third of the four major issues that I have highlighted – monies lost by the Town Council. Ms Sylvia Lim and Mr Low have been quick to say that, despite all the problems, no Town Council monies have been lost. Really?

Can she or anyone else honestly say that no monies have been lost? When the Town Councillors act in breach of their fiduciary duties and paid Loh and Ms How millions of dollars, that is not a loss to the Town Council? Over-payment to a related party is not a loss? That is a really strange statement from Ms Lim. The house is burning and she is standing in front of it and says, "You know, there has been no loss."

Is it possible that she does not recognise loss even when it is staring before her face?

Let us try and put a number on the monies that have been paid to FMSS in breach of fiduciary duties.

Firstly, the MA fees of $22 million. As we saw earlier, the over-charging could be about $6.4 million, perhaps more. That is the over-payment by the Town Council to FMSS for MA fees. Is that not a loss? Add in other amounts which were paid to FMSS without any adequate check or control; $6.6 million in one year. Four years – what would the figure be? You get a lot of money paid by the Town Council to FMSS. So, just on these figures, perhaps over four years, $20 million? You add the $6.4 million, of course, there will be some overlap – because part of the $20 million would be part of the MA fees. But that is before you even look at issues like blatant double charging or over-charging.

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Just one illustration of that. Four Town Councillors who were asked to look at the FMSS' fee proposal to provide essential services. Some of the elected Members of Parliament must have been on the Committee. They briefed the other Town Councillors on the fee. They told the Town Councillors that the fee would be about the same as what was the previously charged fee. The previously charged fee was about $49,000 per month. But the four Town Councillors misled the others. FMSS actually charged $67,000 per month and it was not picked up. They happily paid. This is an oversight? Can it be an oversight? Is it not because of the way FMSS was allowed to operate? Over-payment by more than $120,000 – just from one transaction. And what was the work done? Who knows?

This particular case was exposed quite by chance. If not exposed, the money would not have been repaid. And when it came out, the Town Council says, "Oh, sorry. We made a mistake." How did the mistake arise? How many other such mistakes which benefited FMSS? AGO was not asked to do a forensic audit. So, they did not check all the items. They only checked on the general processes. And even that, only for one year from 2012 to 2013. So, you cannot say, based on AGO audit, that no money was lost. And AGO had made that clear that you cannot say that.

When you set up a system that is so flawed, of course, there are going to be serious issues. Let us put this in layman's terms. You have a business, with cash, valuables belonging to other people. You do not know what exactly you have. You put a friend in charge. They take what they want of the cash. You overpay them several million dollars. You do not check.

Auditors say your accounts are in a mess, the accounts are unreliable. In fact, you say yourself that you cannot produce the accounts. Auditors say that you have no clear idea of what has happened to the cash. And you come and you say no money is lost. One can only wonder at such a statement.

The law takes an extremely strict view on related-party transactions when conflicts of interests are involved. The lawyers in this House will know that. When contracts have been entered into with related parties in breach of fiduciary duties – and let there be no doubt that there is a breach of fiduciary duties here by everyone – the law presumes loss. It will require the related party to justify every payment by showing what work was done and assessing the true value of the work. The contracts are all voidable.

Given all of this, how can Ms Lim or anyone honestly say no money has been lost? And the money was not lost through accident. The structure was approved by at least some of the Town Councillors. For your party supporters to form a company and do all of this, this is not a question of negligence or inexperience. You do not need many years of experience to

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know that you should not let your friends do what they like with public funds.

We will only get a full picture of what monies were lost if there was a forensic audit of the Town Council from May 2011 to January 2015. But you know what? It will be quite easy for the Town Council to find out how much money exactly FMSS and FMSI made. All you have to do is to ask them to produce their accounts and bank balances. How much were Ms How, Loh and Yeo paid? How much money did FMSS and FMSI make? Since FMSS is a private exempt company, its accounts are not public. And FMSI is a sole proprietorship. So, the rest of us here and the rest of Singapore will not know what they made. The basic point is that while the Town Council lost money, FMSS and FMSI made money. The Town Council can find out the answers. Will it do so?

Mr Low said to this House that the Town Council had no choice but to appoint FMSS. He played the victim. No one else wanted to tender to be the Managing Agent for the Town Council because it is an Opposition ward. Lucky to have had Ms How to the rescue, he says, because she had some experience from Hougang.

When the Workers' Party Members of Parliament took over the Town Council on 8 May 2011, there was an existing MA contract with CPG. This was due to expire only on 31 July 2013, two more years to go. And the contract was such that it could not be terminated by CPG. It could only be terminated by the Workers' Party.

The Town Councils Act provides for continuity. There was no need to start from scratch. Ms Sylvia Lim says that CPG asked to be let go. Maybe so. But it was up to the Workers' Party whether they wanted to let CPG go. But you had already decided who you wanted. So, let us not pretend here. FMSS was set up on 15 May 2011, seven days after the General Election (GE). And you decided to replace CPG with FMSS. Ms Lim had said that discussions on termination started in the end of May. That was after you set up FMSS.

Taking over was pre-meditated, to hand over the Managing Agent to the parties that you wanted to. So, stop playing the victim card. You said having Ms How was lucky for the Workers' Party, but I think one can conclude from the AGO report that it has not been so lucky for the residents, seeing how they had been short-changed. But of course, Ms How and FMSS have been very lucky. They made more than other Managing Agents. As I have said, where did the money go in the end? It will be interesting to find out.

Let me now turn to the fourth issue: the responsibility of each of the Town Councillors for what has happened. Given this sorry state of affairs, it is now time for each Town Councillor to come clean before this Parliament and before the people of Singapore.

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Let me start with Mr Chen. Mr Chen has said that they will "take a rational and responsible approach" to Town Council management "with the interests of the residents ‘high' on their minds." Mr Chen should tell us: did you know that Loh, Ms How and Yeo owned FMSS and FMSI? If you did, when did you know? Why was there no discussion at the Town Council of their ownership of these companies? And why is there no record in the minutes of any such discussions? Did you know that Loh, Ms How and Yeo were going to be allowed to supervise themselves and pay themselves as set out in Annex 6? Did you know of the process? Did you know that the amounts involved ran into millions of dollars? Over $6 million in just one year – FY2012/2013? Did you know that FMSS was being paid very high MA fees, much higher than anyone else? If you did not know the full facts, Mr Chen, then that is a partial excuse. Because I think if you had known all the facts, you could not have agreed to this structure – no one could reasonably have agreed to it. This cannot be approved, in law, by anyone acting honestly and with full knowledge of the facts. So, the question is: what did you know and when did you know?

I am reminded by Deputy Prime Minister Teo that you are the Chairman of the Finance and Investment Committee. Mr Chen, as a lawyer, you will know that every Town Councillor owes fiduciary duties and you know what fiduciary duties mean. It will be a gross breach of those fiduciary duties to have allowed Loh, Ms How and Yeo to act as they did and rubber stamp what they did. You will be aware that such conduct is unlawful. If a Town Councillor acts in breach of his fiduciary duties, then legal action can be brought up. The Town Councillor would have acted unlawfully.

Mr Chen, now that all these details are out – what are you going to do? How are you going to explain to your residents?

Let us turn to Mr Pritam Singh. You are a lawyer. You make fierce speeches about transparency. In May 2011, you said, "My friends, the Workers' Party has one important rule that we abide by strictly – we will not play politics with the residents of Aljunied GRC by making empty promises to them. If there is one thread that runs through the Workers' Party manifesto, it is the thread of transparency and accountability" – you thundered. You have been anything but transparent and accountable. There is a thread all right, but it weaves and leaves a tangled web. Would you tell us what your position is on each of these questions I have asked?

Now, let us turn to Ms Sylvia Lim. You are the Chairperson, lawyer. You obviously must have known from the beginning that Loh, Ms How and Yeo owned FMSS and FMSI. And you approved the system that was set up. And you rubber stamped their actions by countersigning the cheques. You do not seem to have ensured that all relevant facts were made known to all the Town Councillors. No discussion on how the serious financial conflicts were going to be handled. No discussions on how residents' monies will be protected.

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Nothing.

You must have known that such conduct would be in serious breach of your legal, fiduciary duties. That it will be unlawful to do so. Yet, you allowed this. And the Town Council also failed to give documents and information to your own auditors and to PwC. The inevitable question is: why did you do all of this?

On 13 May 2013, Ms Lim, you made a speech in this Parliament. You said you are committed to being accountable to others for Town Council management and you strongly defended FMSS, Loh and Ms How. That was the very month, May 2013, that you stopped submitting arrears data to MND. Your Town Council had submitted it every month until then.

You also said that you had a "team of dedicated professionals" to run the Town Council. And you said, "How did we get to this point? We have a team of dedicated professionals with Town Council experience, because for the past 20 years, you Hougang voters have supported us. Because of you, Singaporeans can now see they have a choice. They can see that it is not only the PAP that can run Town Councils". And you said, "MPs in Singapore manage Town Councils in HDB estates. Under the Town Councils Act, elected MPs are to manage and improve the common property in the town, which includes roofs, lifts and other common facilities. A large part of a Town Council's income comes from the residents, by way of S&CC or service & conservancy charges; Town Councils also receive Government grants, which are funded by taxpayers. Being custodians of public monies, MPs should use Town Council funds to advance the residents' interests and not for partisan advantage."

You knew you were custodians of public monies. That is why FMSS and FMSI were allowed to freely transfer public funds to themselves?

Is that right? I am sure we will have your answer to all the questions that we have raised. And I am sure that is the most parliamentary language you can find.

In the course of several months, many questions have been raised about the way the Town Council's finances have been managed. You refused to answer the questions. Instead, you kept repeating that answers will be given when the AGO report was issued. Now, the report has been issued. Will we get honest, direct answers to these questions?

And, finally, Mr Low – Loh and Ms How were your friends. They got the contracts because they were your friends. What is your role and responsibility, Mr Low? You allowed all of these to happen. As the Secretary General of the Workers' Party, what is your

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responsibility?

Let us look at the question of what should be done now. Any honest Town Councillor will admit that all this is unacceptable and will want to set right what has gone wrong, which means, coming clean on the facts, re-looking at all the contracts and payments and recovering all the excesses, the over-payments and the payments made in breach of fiduciary duties, which means taking legal action where necessary. Will the Town Councillors do that?

Mdm Speaker, the AGO report makes for sad reading. They did not manage the Sinking Fund; their data is unreliable; they have submitted reports with significant discrepancies; and it looks like they are not even able to monitor the overall state of what your residents pay you in S&CC fees; they do not perform bank reconciliation required by the TCFR; they do not properly control receipts and handling of cheques; accounting systems and procedures were inadequate; they do not check on amounts collected, paid out and receivables; their own auditors, Foo Kon Tan, heavily and seriously qualified the accounts for FY2011/2012 and FY2012/2013; and for FY2013/2014, no audited accounts have been submitted. It is well overdue.

Ms Lim can go on about all of this being rubbish, but you cannot run away from the facts. Why are the accounts not here yet? Just give an answer.

If you were a listed company, by now, your shareholders would have sued you. Because you collect public funds every month, you have a duty to account to your residents. Basically, the Town Council is in shambles. It is quite amazing to hear you stand up and say, "Everything is okay."

Your own auditors have qualified the accounts for two years running; seriously qualified. And you also admit you may not be able to submit your accounts for this year. And how can you say everything is okay? Only the audited accounts can show that.

The fact that you cannot produce accounts shows that there is something seriously wrong. While you stood up to the public to say that you have a team of dedicated professionals who can run the Town Council, "Don't worry!", you say, and you cannot even produce the accounts.

It is not just a matter of there having been a few lapses on some issues. So many things are so disastrously wrong. There has been a complete dereliction of duties. This is in addition to the gross breach of fiduciary duties in relation to FMSS and FMSI.

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You made a conscious decision to appoint your close supporters – Loh, Ms How and Yeo – to run the Town Council. You allowed the set-up which allowed monies to be paid to them, unlawfully. What does this say of your integrity?

In conclusion, I say this to the AHPETC Town Councillors. Each of you appears to have seriously breached your fiduciary duties. On behalf of the residents of Aljunied GRC, more than 150,000 of them, hardworking, honest people, we have to ask the Workers' Party to come clean and explain yourselves to the public. Your residents deserve some real, honest answers.

Madam, before I ask for my clarifications, I will make some as well. Let me first say that we utterly reject the Minister's assertions or insinuations that the manner in which we appointed the Managing Agent to run the Town Council was to benefit our friends. We utterly reject that.

I have some clarifications to make as well as some clarifications to ask of the Minister. First of all, the Minister produced Annex 6, this chart showing Managing Agent's rates per unit. From what I know, Managing Agent's rates are usually different for residential and commercial units. But in your chart, they are all the same. So, I would like the Minister to clarify that there has been no mistake in his chart and it is really the fact that all these Managing Agents are charging the same rates for commercial and residential units. From the data that I have, even the Managing Agent for PAP Town Councils, such as CPG, from the Aljunied Town Council's records that we have, their Managing Agent's rates for commercial units was $12 and something. I think the Minister may want to check his chart.

I can give you an answer straightaway. You should look at Annex 6 and you will see in the first page that the Managing Agent's rates, once they are done on a weighted average basis, these figures are accurate, I am told by MND.

We will check.

Madam, I would like to clarify the Minister's various – how should I call them – accusations and charges, I think I will call them that. First of all, I think he was not in the Chamber when some of us made our speeches and it is a fact that some of the other Members of Parliament have yet to speak. So, if he is accusing us of not giving answers and all that, I think it is premature for him to say so.

Next, Madam, in relation to the issue of critical documents and so on and whether we have withheld things from the AGO and Pricewaterhouse, I addressed that point in my speech earlier. Perhaps the Minister did not hear it.

The other point to be made is that the financial reporting standard (FRS), I am not an accountant and I think neither is the Minister and, so, there can be a difference of opinion on FRS. From this version of the FRS which I see, it is mentioned that parties are related so long as one entity provides key management personnel services to the reporting entity. Is it just related to business interests, or is it the case also that parties that provide key management to the reporting entity are considered related?

Next, Madam, as far as the signing of cheques goes, I think the Minister was also not here when we went through the Appendix, the list of 84 invoices, showing that steps had been taken to segregate the duties. He is trying to paint the picture that we have been operating lawlessly all this while, but I do not think that is a fact.

Next, the Minister may not have noticed that when we looked through the award of the MA tender in 2012, we actually engaged an audit firm to do an audit of our process. What our auditors noted was the disclosures made by the MA to us at the time, including the fact that 80%-over of the MA fee was salary of the staff and revealing to us their cost structure and so on. On that basis, we were awarded an "A" during that audit, because of the way that tender was assessed. And, yes, it is a case that the rate may be somewhat higher, but it is not what the Minister portrays in this annex, which I think is not accurate.

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The Minister asked why we have not submitted our accounts to FY2013/2014. We explained to the House earlier already, so, we do not think we need to repeat ourselves.

So, Madam, the final point. He was asking whether the Town Councillors knew of the ownership interest of the various directors of the FMSS when they approved the contract. The fact is, as we have stated to the auditors, the ACRA company profiles were submitted for evaluation. So, that was disclosure on that aspect specifically.

One last point for now: the Minister suggests that we deliberately got rid of the former Managing Agent CPG Facilities to appoint our friends. That is not the case at all. As we have said before, the request to be released came from CPG. In fact, their lawyers drafted the deed of mutual release. They explained to us why they needed to be released. We respected their decision because we need to work with the MA and we cannot have an MA that is reluctant to work with us.

Madam, I have clarified those for now. In case other things might crop up, my other colleagues may want to clarify as well.

Thank you, Mdm Speaker. I am going to make two points in response to what the Minister has said. Like the Chairman of the Town Council, I reject the statements made by the Minister. Two points. The Minister alluded to me making some statements about transparency and accountability. I will jog his memory further. It was during the Ministerial Statement on Town Councils in May 2013. I made similar comments that we will proceed on this basis – transparency and accountability.

Now, if I did not believe in transparency and accountability, I would not be supporting this Motion today and neither would any Member of the Workers' Party. But we are supporting it.

The second point: the Town Council elected members and Members of Parliament will continue to serve the residents to the best of their ability and in their interests, as we have done since May 2011. Every week, I do my house visits twice a week; other Workers' Party Members, some of them do it three times a week. We knock on the doors ourselves, no RC member with us. And we ask residents, "Is there anything we can do? Do you have any question for us?" I fully believe when I do my house visits this Saturday, some of these questions will come up. Likewise, they will come up for my fellow Workers' Party Members of Parliament. We will answer all of them. Why? Because our duty is to the residents. We

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will answer to them. Well, Minister, if you were a resident, I will answer your question.

I see a very interesting definition of transparency: we will answer residents, we would not answer in Parliament. [Interruption] Well, I am not sure what you are saying because I have asked all these questions and you stand up there and you say, "If you are my resident, I will answer you." I assume that since I am not your resident, you will not answer me in Parliament here. But let us not debate it. If you have answers to the questions I have asked, please revert to us tomorrow when you speak, rather than to say you will answer to your residents when you knock on their doors without RC members.

Second, you say you support the Motion. You know, there is a phrase, "To walk the talk." Talk is cheap. I have asked a series of detailed questions, with facts and figures and data and what was disclosed and what was not disclosed and why it was not disclosed and why was your Town Council's Managing Agent paid so much. I think if you want to go beyond and you want to be honest with the people of Singapore, I suggest you take your time and you answer those questions, rather than to provide grand pronouncements about rejecting my statements and that you are all for transparency. I accept that you are for transparency. So, in the spirit of transparency, answer the questions.

Now, in response to Ms Sylvia Lim's points, again, there is a general statement of rejecting everything I said. I think the question is really that I have not made broad statements. I have referred my statements by reference to facts and figures. So, you would do well to go back to those facts and figures and answer them.

As regards Annex 6, the Managing Agents' rates, I am assured that the rates are correct, as set out in the table. You may be misled because the previous Aljunied Town Council had differential rates but, today, those are the rates – if you look at the year that we have put. Now, if there is any change to be made to the table, I will check overnight and I will let you know tomorrow. This is what I have been told; it is accurate, but since I have not checked it myself, I will have it checked tonight.

As regards the other points, you asked about FRS. I think you are referring to the wrong FRS. What you are referring to is the FRS which came into force as of July last year. If you go back to the FRS before July last year, you will see that it is as I have stated it.

Second, you throw at us that you have some audit firm which gave you the all-clear, would it not be good for you to produce that report and let me ask you these questions. The firm was tasked to review the MA tender and had a narrower scope compared with Pricewaterhouse. The review by that firm focused primarily on compliance with tender procedure. Were they asked to consider the substantive considerations behind the award of

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the contract? Did they actually sign off on the process that is outlined in Annex 4 and say: "We agree. This is a wonderful process and you can go ahead with this – where the same person issues the invoice, certifies it and also signs the cheque?" Did they approve that? Did they approve the process? So, let us be clear what they approved and rather than debating here – I think, why not you make a substantive statement? I will be surprised if you can produce any professional who is honest, who will say the processes that have been outlined in this House are supportable.

You referred to the ACRA statement. There is nothing on the record and, if you look at my speech, there is nothing on the record that ACRA's statement was discussed at the Town Council meeting; it is not recorded in any minutes. But if you say that all the Town Councillors knew all the facts and yet proceeded on this basis, then, no doubt, you will explain to us why you chose to record some facts but not others; you chose to record that they were employees and directors but not owners. You will also then explain in due course at the right forum why you thought fit to approve this process, with full knowledge of facts.