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AHTC trial day 7: FMSS had no opportunity to respond to “prejudiced” report-defence

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The report from auditing firm PricewaterhouseCoopers (PwC) alleged that overcharging was committed by FM Solutions and Services (FMSS), the former managing agent of Aljunied-Hougang Town Council (AHTC). Furthermore, according to the report, the managing agent could have “deliberately put forward increased rates.”

However, the firm never gave FMSS an chance to respond to these allegations.

But PwC says this was not necessary.

Lawyer for the defence, Leslie Netto cross-examined PwC partner Goh Thien Phong on October 15, Monday, day 7 of the AHTC trial. Mr. Netto cast doubt as to independence of PwC’s evaluation of the payments made by the AHTC.

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Mr. Goh had led the team that evaluated payments made in 2013 through 2015 by AHTC, then known as Aljunied-Hougang-Punggol East Town Council (AHPETC), when the WP had been in charge of the Punggol East ward.

Mr. Netto claims that PwC’s report was “prejudiced”, and that PwC should have allowed parties an opportunity to respond to criticism, a process known in the legal world as  Maxwellisation, before the report was made public on April 30, 2017.

Mr. Goh follwed Owen Hawkes from KPMG as a witness for the prosecution. On Tuesday afternoon, October 16, former WP chief Low Thia Khiang will be testifying for the defense.

Three Workers’ Party Members of Parliament (MPs), along with two town councillors and Ms How Weng Fan and the late Danny Loh, of FMSS, are being sued by Pasir Ris-Punggol Town Council and an independent panel acting on behalf of AHTC, who have questioned more than S$33.7 million paid to FMSS between 2011 and 2015.

Mr. Netto represents Ms. How and Mr. Loh. Similar to the strategy of Chelva Rajah, who represents MPs Low Thia Khiang, Sylvia Lim and Pritam Singh, Mr. Netto has questioned the impartiality of the PwC.

He said, “Your report is prejudiced and cannot by any stretch of imagination be regarded as an independent opinion of a fair-minded accountant.”

He called the statements made by PwC as “laughable,” and said that they would have gotten a different story had they talked to Ms. How.

He also read portions of Ms. How’s affidavit to the court, “There were so many things to think about and talk about (in that uncertain period). Those who suggest that there was any kind of mischief or conspiracy must be crazy.”

Ms. How said she was “never told with certainty” that the contract for managing agent would be given to FMSS in 2011.

In her affidavit, Ms. How also wrote about Mr. Lim and Ms. Low, that they “are not the kind of people who will whisper and plot.”

Furthermore, Ms Lim “has a mind of her own” and “nobody can ask favours of her. She is officious and deals with everyone at arm’s length.” Regarding Mr. Low she wrote, “He is not the kind of person who will do favours at the expense of the Town Council. No way.”

In response to Mr. Netto, Mr. Goh said that a response from FMSS was unnecessary. “I understand KPMG has done Maxwellisation (with FMSS, but they did not go far in getting a proper account from her), so we do not see it necessary to seek (their comments).”

He mentioned that Ms How would not agree to be interviewed, which KPMG had requested. And even if she had, there were to important components missing in her narration, according to Mr. Goh.

“First, there is nothing to show us that there is indeed negotiation of the pricing of (FMSS’) first managing agent contract (resulting) in a higher price to be paid to FMSS.

Second, there is one piece of documentation that is left out, which is an email by one town councillor to Ms How (in early) May 2011 to tell Ms How that her company will be the managing agent for a period of one year – as early as that. I don’t know why she said she is not certain, but it (appears apparent that) she will be the managing agent without even calling for a tender.”

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