My response to Sylvia Lim's 2nd Open Letter to Residents of AHPE

In response to The New Paper’s article that FMSS had served a letter of demand on AHPETC for the sum of $3.5m, AHPETC issued the following Open Letter to the residents of AHPE. As with most of their communication, AHPETC has once again been selective with the truth and at times distorting the facts to suit their own lies.

SG Bumiputra sat down to study Sylvia Lim’s letter and the following are the distortions and untruths I discovered. 

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SECOND OPEN LETTER TO RESIDENTS OF ALJUNIED-HOUGANG-PUNGGOL EAST TOWN

Dear Residents,

In my First Open Letter to you in June 2015, I explained three main points concerning various allegations made against Aljunied-Hougang-Punggol East Town Council (AHPETC).  These were:

1. AHPETC does not and cannot reserve contracts for “friends” due to the public tender process;

2. The alleged “overpayment” by AHPETC to its former Managing Agent (MA), when compared to rates paid by PAP TCs in 2014, was an exaggeration, looking at the rates paid by PAP TCs in 2011, 2012 and 2013 according to data provided by the Ministry of National Development (MND);

[Distortion: FMSS’ MA rates were consistently higher than other TCs, in the four years that it was AHPETC’s MA (not just 2014) ). Now we also learnt that the margin of profit was 30% and the four FMSS owners made more than $3.2m a year.] 

3. The MA rates that AHPETC agreed to pay its MA in 2012 were arrived at taking into account the MA rate paid by the PAP management of Aljunied TC to its former MA.

If you missed the first open letter, you can read it online at http://www.ahpetc.sg/sylvia-lims-open-letter-to-residents/.

In this Second Open Letter, I would like to clarify and reassure all residents that AHPETC places your interests at the heart of its work and continues to make improvements to its financial management.

This letter will cover the issue of Conflicts of Interest and AHPETC’s financial position.

1. Conflict of Interest and Related Party Transactions

There have been allegations concerning related party transactions between AHPETC and its former MA, FM Solutions & Services Pte Ltd (FMSS).

First, there is no longer any issue, as AHPETC is now directly managed and does not outsource its work to an MA.  The previous MA contract expired on 14 July 2015, and there were no bidders to take over the MA services after 14 July 2015.

Since 15 July 2015, AHPETC has been self-managed.  This means that AHPETC is now directly hiring staff to handle estate, finance, administration and other tasks, instead of outsourcing the work to an MA.

Under direct management, AHPETC’s contractors continue to deliver services under the existing contracts, now supervised by TC’s directly hired staff.

Second, there was never any conflict of interest whatsoever between the Workers’ Party (WP) or any of its Members of Parliament (MPs) and FMSS.  Neither WP nor any of its MPs or members has any interest in the business of FMSS.  None of the directors and shareholders of FMSS is a member of WP.

[Untruth: The late Mr Danny Loh and Ms How Weng Fan are long time WP supporters. They acted as assentor and proposer to the WP team of candidates led by Mr Yaw Shin Leong in Ang Mo Kio GRC in the 2006 General Election. Ms How has worked for Mr Low TK in Hougang since graduating from university. FMSS was formed on 15 May 2011, exactly 1 week after the results of the GE. CPG only informed Sylvia Lim of their wish not to continue as MA in late May.]

Third, there have been accusations that when the MA was working at AHPETC, the husband and wife team who owned FMSS could freely sign payments to themselves.  This is not true.  When WP took over in 2011, one of the first decisions made by the new Aljunied-Hougang Town Council was to require any cheques to the MA, no matter how small the amount, to require the counter-signature of AHPETC Chairman and Vice-Chairmen who have no interest in the MA’s business

[Untruth: While the payment amounts may have been pre-agreed by contract, the TC still has a duty to ensure that the services that the MA was contracted to provide were performed duly and properly. The question is, when the Chairman and Vice-Chairmen counter-signed these payments, did they take steps to counter-check that the contracted services - for which the millions were being paid - had been duly performed? The answer is clearly NO since their own auditors have observed poor governance over related third party transactions involving FMSS. And the AGO discovered specific instance of overpayment/overcharging by FMSS because it misrepresented the facts to the TC who approved the payment rates in ignorance.]

 2. Financial Position of AHPETC

Some people have accused AHPETC of bankruptcy and running huge deficits that are not sustainable, and also warned residents of other towns not to vote for WP so as not to subsidise AHPETC.  These allegations are misguided.

AHPETC filed its audited accounts for FY 14/15, on time, by 31 August 2015.  Though these accounts show AHPETC in annual deficit, this is because AHPETC has still NOT received its annual S&CC operating grant of $7.2 million from the government, which would normally have been paid to all Town Councils in April 2014.   Taking into account the $7.2 million in grant which AHPETC expects to receive, AHPETC’s annual income and expenditure statement would show an annual surplus of $1.7 million.

[Untruth: MND had to withhold the grants because the TC could not file a clean set of accounts for years. Its own auditors and the AGO itself raised numerous disclaimers and concerns. As these grants are public funds, MND has a duty to safeguard how they are used and managed. Nevertheless at the request of the TC for release of the grants to pay their outstanding SF deficits, MND agreed and asked for AHPETC latest cash flow position. The TC refused to give the information despite repeated reminders viz on 2 May, 15 Jun and 6 Aug 2015. Even the High Court Judge Quentin Loh remarked that the TC had itself to blame for not securing the grants.]

The past operating deficit was largely the outcome of higher tender price for various service contracts and start-up costs.

The current positive position came about through a combination of steps taken by AHPETC. These included lowering its utilities costs by using contestable energy, reducing its general and administrative expenditure, and increasing its revenue.

Throughout the difficult initial years, AHPETC management believed that it could improve the TC’s financial position, and the latest audit shows that it has.  We expect to further consolidate and improve AHPETC’s financial position going forward.

We have done our best to serve residents, and I would like to express appreciation to our staff for their contribution to the progress we have made and to our residents for their support and understanding.

SYLVIA LIM

CHAIRMAN

ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL

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From this simple episode, it is obvious that Ms Sylvia Lim and the Workers’ Party are skills in the art of misinformation. Sandwiched between truths, the lies are hard to distinguish from the truth. 

Singapore General Election 2015: Ministerial Salaries

Every once in a while when the opposition trolls run out of things to say, they will invariably raise the issue of Ministerial Salaries to push their agenda that the PAP Ministers are out of touch with Singaporean. However, before you get mislead by this misinformation, did you know that the Worker's Party (WP) and the People's Action Party (PAP) agree on the quantum of ministerial SALARIES to be paid?

A look back at the SALARY debate in 2012 will show that the WP's proposal is very similar to that of the review committee set-up by Prime Minister Lee Hsien Loong. In fact, the WP proposed a higher starting monthlySALARY for ministers.

The full story can be found at AsiaOne. #sgelections #ge2015

Singapore GE2015: Cost of Living. A civil servant speaks her mind.

Sharing what my civil servant friend shared with me about the Cost of Living issue Singaporeans face ...

Chowing down your food with friends—$3 plate of Hokkien mee, $4.50 plate of orh luak (oyster omelette), $8 plate of BBQ chicken wings and $12 plate of BBQ stingray—at a hot and crowded hawker centre, watching as super zhng-ed out luxury sports cars worth over $1 million whiz past? Yes, it pisses me off too.

But refusing to buy $0.30 tissue from an old aunty as you work your way through your food? Yep, I’m sure that pisses the Aunty off as well, especially when she can’t afford your $27.50 meal.

Simply put, we can see an income gap in Singapore everywhere we look. It is one of the highest amongst developed countries. How high? There is a number called the Gini coefficient. Essentially, the closer the number is to 1, the greater the income inequality. Singapore’s was 0.464 in 2014. Compared to places like the USA’s 0.401 and UK’s 0.35, we aren’t doing so well.

How should Singapore overcome this income gap? Solutions have been much debated abroad and locally.

Some say minimum wage for those in lower-skilled jobs—like fast food chains—is the answer. In fact, they think minimum wage would help these employees better cope with the rising cost of living. But is this really a viable solution? Other countries have tried, but their unemployment rate is much higher than Singapore’s. In Europe, high minimum wages have been accompanied by severe unemployment. Typically, those with the lowest skills are most badly affected. This makes sense, if you think about it. Companies would find it simpler to come up with automated ways of carrying out these jobs, so they don’t have to pay minimum wage to hire workers.

And why would companies choose to do business in Singapore, when there are many other neighbouring countries that do not have minimum wage? I am no expert, but surely this solution could negatively impact Singaporeans’ jobs.

Perhaps this is why the government has not implemented minimum wage. Instead they supplement the wages of lower-income Singaporeans. For example, Workfare has become a longstanding feature of our system. For Singaporeans 35 and above, and earning $1,900 or less, get up to $3,500 more a year in cash and CPF contributions.

Even those near the middle are getting help. More recently, the government has been co-funding 40% of wage increases for Singaporeans earning $4,000 per month and below through the Wage Credit Scheme.

What else can they do in the long-run? In a 2014 report, the Organisation for Economic Co-operation and Development (OECD) lists a few other solutions, one of them being to better match jobs with skills, and yet another to promote equity in education. Singapore may already be heading down this path. Last year, PM noted that some of the ways to deal with the gap between rich and poor in Singapore was to ensure that Singaporeans who chose a technical route could succeed too, and all had access to housing, education and healthcare.

For example, SkillsFuture will give polytechnic and ITE graduates good career progression and allow them to earn more when they start in the workforce, by ensuring these students get a chance at hands-on learning in the industry.

As for quality housing, education and healthcare… well, the government provides housing grants (which go up to $60,000) for those looking to buy HDB flats, helps lower-income families afford kindergarten fees with KiFAS (lower-income families possibly pay as little as $1 per month), and the new MediShield Life will provide universal insurance for hospitalisation.

A lot of these schemes will benefit both the Aunty selling tissue paper packets, and you having your hawker feast. So, while we complain about the unfairness of it all, we should also admit this: income inequality is real, but the government hasn’t been sitting on its white horses. With some luck and hard work, we may be able to keep the gap from widening beyond what’s healthy.

The Story of FMSS: More than meets the eye

More to it than meets the eye: the story of FMSS

The numbers speak loudly enough for themselves – FMSS and its owners have clearly managed the TC to their own advantage and profiteered from it. In all, $3 million dollars in salaries, fees and profits last year– crazy margin - three dollars out of every S&CC ten dollar spent on the MA is sheer profit and benefits for the 4 owners. What adds insult to injury is that while they got paid big bucks, they didn’t even deliver a basic standard of administration and financial system to past muster under the TC’s own auditors. Four years this went on until the AGO audit exposed the mess the TC was in. Then Sylvia Lim finally had to step in and try to clean up the mess.

What is really difficult to comprehend is Sylvia Lim’s defensive reactions over FMSS. Each time, the TC screwed up – which means FMSS screwed it up - as highlighted by their own auditors, she will defend the FMSS with spurious and some plainly, false assertions.  When all else fails, she hide behind the argument that their relationship with FMSS is purely commercial and the contract was awarded via open tender bla bla bla. When AGO found a case of FMSS having misled the TC which wound up paying 40 % more than was rightly the amount, she trivialised it as a mathematical error and even took personal responsibility as Chairman of the TC for the “mistaken overcharging” by FMSS. Now when confronted this week with the glaringly obscene profits that the FMSS owners made off the TC, she dismissed it and declared there has been no overcharging by FMSS. 

The latest distraction she is trying to throw smoke with is that the Government shouldn’t look into all these things (even if it involved public monies) and that all this is an abuse of Government power. Are you kidding? As an elected MP, she has a legal duty to manage the TC conscientiously and safeguarding the residents interests and monies is at the heart of that.  No different from the Government, namely MND which oversees the TCs under the TC Act. This  duty of the office - of the elected MP of AHPETC and of the Minister for ND - requires that no stone be left unturned and that no one looks the other way to find out if residents have indeed been short-changed and overcharged by FMSS. The public has a right to know what the hell happened in the 4 years that the FMSS ran the TC, laughing to the bank but leaving behind such a huge rotten mess brewing under the façade of efficient enough cleaning services and other visible activities, which lull residents to believe that everything in the TC is hunky dory.

When you research and trace the facts, the picture that comes out tells you that there is more to FMSS than meets the eye. I have no doubt that FMSS was set-up at the initiative of the WP leaders. It was incorporated on 15 May 2011,  13 days after the GE; preparation for incorporation – collect/submit forms and getting lawyers to draw up incorporation documents - probably occurred at least a week before that. All this happened before CPG spoke to Sylvia expressing wish to terminate their service as the MA. In an interview reported in Straits Times (19 Aug 2011), Sylvia revealed that CPG asked to be released from their MA contract in “late May”

Ms How and her husband, Danny, long time supporters of the WP, were trusted aides who ran Hougang TC. They managed to put up almost $500,000 in a jiffy as paid up capital for the new company. And most telling, the company was set up as a “limited exempt private company” which means that its annual accounts need not even be submitted to ACRA . Completely out of public scrutiny.

There was obvious pre-meditation and strategy by the WP in the formation of FMSS. They had a hand in forming it, more than they have disclosed. To be fair, they had just won a GRC and were obviously nervous about trusting the CPG who had been running the TC under the PAP. They needed to rely on their own people. The FMSS was a WP trusted and WP aligned entity from the point of its creation. In my view, there is nothing wrong with what they did, even if they chose to keep it secret. No big deal, they did what they had to do. This is politics, man.

The story however starts to go bad after FMSS took over running the TC and ran it to the ground. Ms How, used to being her own boss under Low Thia Khiang in Hougang, ran AHPETC like the way she ran Hougang. Sylvia Lim had little control over her even when Ms How behaved in a rude and disrespectful manner to her - there was little she could do about it. But the truth it, Sylvia was quite happy not to have to deal with boring, mundane stuff like running a TC. She had her sights on higher things, they were on a roll, everyone in the WP was politically high. So no surprise, that in the same ST interview reported in Aug 2011, she assured that the party can run the TC and has set aside the first 6 months after the GE to focus on the TC and after that “ a few months down the road, we will start to think about the next general election and the new areas we would like to contest”

Four years passed – disclaimers piled up each year by their own auditor – FKP - as the TC under FMSS couldn’t even produce a clean set of accounts. I recall that the High Court Judge Quentin Low said that in another setting, this state of affairs would have led to civil if not criminal sanctions. What FMSS was guilty of was incompetence and greed. What Sylvia and her fellow WP MPs were guilty of was negligence arising from the arrogant belief that running a TC was no big deal. She had assured voters that the WP can easily run a GRC TC and were ready.  She thought she could have the challenge of running a GRC TC done in 6 months and then just focus on politics.

This under-estimation of the complexities of a GRC level TC management and over-estimation of the experience and expertise of FMSS is the root of why things went so wrong in AHPETC. This is why Sylvia assumed that the PAP’s AIM IT system contract would not be renewed and never bothered to ask; indeed like FMSS, the WP preferred to have their own system over which they had total control. Sylvia asked AIM for short extensions to get her own system going and this was acceded to; she even thanked AIM at the end of it all. But when things go wrong because of FMSS incompetence (even manual records got lost and couldn’t be traced), Sylvia blamed AIM. When their own auditors raised a list of growing disclaimers, Sylvia blamed “handover issues” implying that George Yeo fixed them up – this was a constant and tiresome refrain until debunked. The fact is the “handover” of documents and records was between the CPG and FMSS held under the supervision of the TC with Sylvia at the helm. Poor Georgie boy had nothing to do with it. I heard that when CPG left after a proper handing over records with FMSS signing for all documents received, Sylvia hosted a big makan to thank the CPG folks for staying back and handing over properly to ensure a seamless transfer. (Sylvia’s reflex to deflect and blame others seem deep seated.More recently she blamed deficits in the past to MND withholding their grants – the facts are completely the opposite! AHPETC TC was in deficit for those years when they had the full grants (FY 12/13, FY 13/14)  and they reported an operating surplus for FY 14/15, the year when the grant was withheld!)

When the AGO auditors went in to do a special audit of the TC , they were horrified to find that the TC’s archival and record system consisted of a room full of piled up boxes overflowing with documents.  No proper record keeping and many missing records, some conveniently so for FMSS as related third party transactions were found to be an issue by the AGO and even later by the TC’s own auditors. What was Sylvia and her MPs doing during all this time?  To be blunt, they had been sleeping on the job, underestimated the challenge of running a GRC TC and trusted the wrong people to do it but who screwed them. The only problem is because the monies are all residents’ monies, the ones who got royally screwed are the residents of AHPETC and many of them till today don’t even know it.

Sylvia makes a fine speech about the duties of MP looking after the TC. During the 2011 GE, she assured the voters that she and her team have the experience to run a GRC TC – no fear.  But the truth is she didn’t bother to spend any time looking after the TC. Hubris led her to presume that she could just oursource her duties to look after the TC to a trusted MA like FMSS and focus on cultivating her political ambitions. Indeed I recall seeing her on stage pleased as Punch when her fellow MP, Pritam Singh commended her to the rally audience as a political leader with Prime Minister material (aiyoh ).Some of you may recall it too. (Anyway the bloody PAP machinery makes sure you don’t forget it by running the footage ad nauseum on the social media.)

A word on the FMSS people. I know that there is no love loss between Sylvia and Ms How. Danny who died suddenly has been a victim of sorts too. By all accounts, he was a nice man and it is really quite nasty of Sylvia of constantly press him for recovery of monies and when he agreed, changed her mind to demand for even more. ( A FMSS staff told me that Danny was a good boss and FMSS a good and fair employer). As a lawyer Sylvia should have worked through proper legal channels but she wanted to do it confidentially for political damage control reasons and so she kept putting pressure  Danny personally to cough up more monies on the grounds of overpayment due to poor service. ( This is completely at odds with  Sylvia’s public assertion later that payment according to contract cannot be overpayment!) Sylvia of course didn’t dare to deal with Ms How as the fiery woman would probably have kicked her in the groin ( slapping is reserved only for use by WP candidates J).

I have always thought that Sylvia was a nice  damsel and Ms How was the bad egg; but I have revised my view since researching this story – Ms How is abrasive, hot tempered and cantankerous, a  rough diamond, but what you see is what you get. Sylvia is really a devious character (maybe politics have changed her) and she has shown herself to have no compunction to lie in your face. She is of course under great pressure too because she is left to shoulder this AHPETC-FMSS mess by herself and some of her fellow MPs have clearly distanced themselves from her on this issue.

Anyway back to the story: a  business is driven to make profits; it is not a charity. So I suppose one can argue that there is really nothing wrong for FMSS owners to pursue profits; they are not obliged to save for the TC. On the other hand, it is the elected MPs whose job and duty it is to oversee and manage the MA and ensure that they don’t profit at the expense of the residents. No checks, no balance. The WP MPs failed in their duty because the buck ends with them – final responsibility for managing the TC rests with them, the elected MPs. 

The Government wants to do a forensic audit of the 4 years of TC accounts when the TC was run by FMSS. Eventhough Sylvia has found instances of overcharging and was exposed trying to recover monies from FMSS privately, she resists any such forensic audit.

I am glad that Sylvia has finally took charge of TC affairs since Mar this year. But she must stop “protecting” FMSS in order to exercise political damage control to avoid the public knowing just how much their friends have screwed them and the residents, right under their noses for four years.

The PAP is not going to win back Aljunied this GE. You can bet on it. No need for Sylvia to be so kiasu and kiasi. Do the right thing even if the truth turns out to be inconvenient politically. Because in the long run, you will be politically stronger for it.

It is time for Sylvia to take ownership and not keep on sweeping this FMSS-TC episode under the carpet. Afterall she has taken the first steps already and have as reported in her latest audited accounts cleaned up the shit and improved the situation. She cannot pretend not to have an inkling of what a mess she is left with in the TC, she cannot pretend that the last 4 years under FMSS didn’t happen. Time to step up and do the right thing. Do a forensic audit and get it cleaned up once and for all.

“The bottom line is this: We are responsible to ensure that the town runs well. The managing agent is employed for their professional expertise, and they have to deliver ….We are quite well aware of the need to be careful with these monies which come from the residents and also from government grants. We will definitely want to protect these monies” (Sylvia Lim, ST 19 Aug 2011)

I believe Sylvia Lim meant these words when she said them then. Time for her to go back and live by them and stop ducking the problem.

AHPETC Financial Report FY2014/2015

AHPETC, now directly run by the Workers' Party, proudly announced that they have submitted the statutory required documents on time. If one did not know the full story, one would be surprised as to why there is great fanfare for an organization to do what it is required by law to do.

Accompanying that announcement, was also a statement that AHPETC had achieved a slight surplus for Financial Year 2014/2015. In and of itself, these 2 statements convey to the layman that all is fine in AHPETC. Unfortunately, what the two statements failed to do,  which they were deliberately designed to do, is to tell the truth about what went on and is still going on in AHPETC.

The following infographic tells you what AHPETC does not tell you .... or want you to know. #sharethetruth #ge2015 #sgelections