The Workers' Party-run town council said yesterday that it would comply with an order compelling it to restrict the powers of MPs Sylvia Lim and Low Thia Khiang, but accused the Government of making a U-turn over the matter.
It added that it had reservations about whether the order was applicable to the two MPs, who were found to have breached their fiduciary duties. But it has decided to obey for two reasons.
One, ignoring the order could land the secretary or chairman of Aljunied-Hougang Town Council (AHTC) in jail.
Two, the town council is intent on focusing its energies on the main task of running the estates.
In a letter to the Ministry of National Development (MND), AHTC chairman Faisal Manap said: “The town council wishes to direct its energies towards fulfilling its core functions of managing and maintaining the HDB estates in Aljunied-Hougang town for our residents.”
“As such, the town council will comply with the rectification order,” he added.
To that end, the town council had, on Thursday, taken steps to ensure that both Ms Lim and Mr Low would no longer be allowed to sign cheques or unilaterally approve expenditure or waive quotations or tenders, among other things.
In response to media queries, MND said: “We are glad to note AHTC's decision to comply, and trust that they will continue to discharge their duties and responsibilities in the best interests of their constituents.”
The rectification order, issued by Minister for National Development Lawrence Wong earlier this month, required AHTC to temporarily restrict the powers of Ms Lim and Mr Low in making certain financial decisions at the town council.
It followed a High Court judgment last October that found the duo had breached their fiduciary duties towards the town council in hiring a managing agent company without calling a tender.
The two MPs are appealing against the judgment.
Almost a month after the court ruling, Deputy Prime Minister Heng Swee Keat introduced a motion in Parliament asking the duo to recuse themselves from financial matters at the town council, and expressed disappointment that they had not done so voluntarily.
AHTC later discussed the issue, but eventually voted 17 to one against recusal.
Yesterday, AHTC released Mr Faisal's letter to MND, expressing surprise that Mr Wong had invoked Section 43D(2)(b) of the Town Councils Act to issue the order.
Mr Faisal, citing the Nov 5 debate on the motion, described the latest development as “a shift by the Government from its earlier position in Parliament”.
He also questioned the propriety of the order.
He said that Minister in the Prime Minister's Office and Second Minister for Finance Indranee Rajah had “affirmed” that it was up to AHTC to take action, and Parliament could not compel it to do so.
Also, Minister for Social and Family Development and Second Minister for National Development Desmond Lee had said the law was passed years after the two MPs' actions, and it could be invoked only after an investigation was carried out or if there had been a report or compliance review under the amended Act.
As such, said Mr Faisal, there were “concerns about retroactivity and the pre-conditions not being met”.
To this, MND said it made the order only after careful consideration and seeking legal advice.
The ministry added: “It is appropriate given the serious nature of the October 2019 High Court judgment.”
The ministry had 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.
The case centred on their role in awarding contracts to FM Solutions and Services and FM Solutions and Integrated Services without calling for tenders.