A report by audit firm PwC looking into past payments made by the Workers’ Party-led town council did not consider ‘factor of political life’. The forensic auditor and partner at Pricewaterhouse Coopers (PwC), Goh Thien Phong, conceded this point to senior counsel Chelva Rajah. SC Rajah is defending the trio from WP – Low Thia Khiang, Sylvia Lim and Pritam Singh – in the trial.
PwC was appointed by the Pasir Ris-Punggol Town Council (PRPTC) to review past payments made by AHTC in relation to Punggol East, which the WP held from 2013 to 2015. During that time, AHTC was called Aljunied- Hougang-Punggol East Town Council (AHPETC). PRPTC is under the People’s Action Party (PAP), which won Punggol East in the 2015 General Election.
The appointment of FMSS as the managing agent (MA) for the defunct Aljunied-Hougang-Punggol East Town Council (AHPETC) was tainted “right from the start” and warranted further investigations, said the report by accounting firm PwC.
The auditor added that Punggol East constituency could have saved at least $500,000 during the time it was managed by the Workers’ Party-run town council, had AHPETC followed proper procedure in awarding contracts and making payments.
PRPTC, which oversees Punggol East, is suing eight defendants – including three WP MPs and two town councillors – over alleged losses suffered when the constituency was run by AHPETC.
Writing about the exchange between the senior counsel and the auditor in his Facebook, NCMP Daniel Goh said, “(when it) came to the issue of the waiver of tender. He (SC) asked that the Ministry for National Development had no issue with the waiver, the Minister for National Development had no issue with the waiver, “but PwC appears to have difficulty with the waiver”.”
Goh disagreed with the SC’s suggestion that he “had decided that the MPs were not to be believed for the reasons they gave on the waiver, that they were to be doubted and all they said should be disregarded.”
When asked if Goh considered the (factor of political life) that caused the WP MPs to seek the assistance of existing Hougang Town Council managers to form FMSS, the auditor said: “yes, but there was still the TCFR (Town Council Financial Rules) to be followed and his report was just about why wasn’t it being followed.”
A FACTOR OF POLITICAL LIFEThis is the last thing I observe from Senior Counsel Chelva Rajah’s cross-examination of PwC…
The following is the NCMP’s FB post in full:
“This is the last thing I observe from Senior Counsel Chelva Rajah’s cross-examination of PwC auditor Goh Thien Phong last Friday. It is a good lead in to Mr Low taking the witness stand tomorrow afternoon.
This is going to be a long observation on the exchange surrounding the issue of awarding the first managing agent (MA) contract to FMSS for one year on waiver of tender. The PwC Report had alleged that AHTC was overcharged by about 0.5m in this award compared to the CPG contract if CPG was made to stay.
Rajah started by saying that Goh had alleged the MA contracts awarded to FMSS were made to benefit “the conflicted persons” (Ms How and Mr Loh of FMSS), and asked, “you have no evidence they were made with the purpose of benefiting the conflicted persons, do you?”
Goh said he had relied on the KPMG Report and replied with a question, “In fact, it benefitted the conflicted persons, isn’t it?” He then said it was fact that from the start that the contract was awarded without tender to the conflicted persons.
Rajah thus came to the issue of the waiver of tender. He asked that the Ministry for National Development had no issue with the waiver, the Minister for National Development had no issue with the waiver, “but PwC appears to have difficulty with the waiver, right?”
Rajah asked whether Goh knew the circumstances in which the first MA contract came to be, that CPG didn’t want to continue as MA.
Goh said no, that “in fact, on the contrary”, he knew that FMSS “secured the contract before CPG expressed the desire to be discharged”.
Rajah asked whether Goh approached this matter as an independent accountant.
Yes, Goh answered.
Rajah asked again how he formed the view that the contracts were made to benefit the conflicted person.
Goh said that based on the evidence before him, he was saying “that it raises questions”.
Rajah asked whether Goh considered the fact that the new town council faced “a very real prospect” CPG would pull out and that the MPs had to prepare for the eventuality.
Perhaps, Goh answered.
Rajah said that CPG did indeed pull out and asked Goh whether he agreed that in these circumstances the MPs had to waive the tender or else there won’t be time for a smooth takeover.
Yes, Goh answered, if CPG had pulled out before any contract was awarded.
Rajah then asked whether Goh had decided that the MPs were not to be believed for the reasons they gave on the waiver, that they were to be doubted and all they said should be disregarded.
Goh disagreed and said that the contract was awarded “on a de facto basis” to FMSS, “even before CPG expressed the desire to be discharged”. He pointed to the email from Mr Low Thia Khiang to Ms How Weng Fan on 19 May 2011 about appointing FMSS as MA for one year, before CPG expressed the desire to be discharged on 30 May 2011.
Rajah said, “Yes, because Mr Low correctly believed that CPG was going to pull out. Do you expect him to sit on his hands and do nothing?”
Goh retorted with a question, then why was there no tender being called as required by the Town Council Financial Rules (TCFR)?
Rajah pointed out that AHTC could not call a tender until CPG had confirmed that they were pulling out.
Goh said that there was two to three months from 30 May for AHTC to do so.
Rajah said that was precisely the reason the TCFR allowed for waiver of tender, that was precisely why the MND recognised that when there was a takeover of a town council the present timeline of three months were insufficient, that was precisely why the MND accepted the waiver of tender for AHTC and Potong Pasir.
He asked Goh whether he was saying the waiver of tender for Potong Pasir was also wrong.
Goh said he was the independent accountant for AHTC not Potong Pasir, and that the TCFR did provide for waiver, but only under urgent circumstances and if it was in the public interest to do so. He then said that two to three months was enough, so he did not see any urgency here.
Rajah said, “MND seems to think that is not enough but Mr Goh thinks it is more than enough”.
Goh replied that he could not speak for MND, as he did not know what MND had seen to form their opinion.
This exchange went on for a bit more, until the Honourable Judge interjected and said to Rajah that he was not sure whether these were evidence for his purposes and that these were conclusions he would have to draw, that whatever views Mr Goh might have remained on record thus.
Rajah acknowledged but said that Goh had made certain allegations and drawn certain conclusions and he did not agree with them.
The Honourable Judge said that the PwC Report was prepared for a different purpose, not for the purposes of evidence in court, that it was prepared on commission issued by Punggol Pasir Ris. The Honourable Judge then said, perhaps, Mr Goh was not ideally placed to express a view on the parts of the record which drew factual conclusions, that it would certainly be a view he would have to take depending on the proceedings.
It did not end. Rajah cited another instance in the PwC Report alleging “partiality and preference towards FMSS as the MA”, denied the allegation and told Goh that this was not something he should be concluding as an “expert accountant”.
Goh defended himself, said his findings were based on “the totality of all the evidence”, that he was an “investigative accountant” who investigated into circumstances surrounding the award of FMSS contract because the circumstances were very important.
Rajah then suggested to Goh that if he had investigated with an open mind he would have paid more attention to the plight the newly elected MPs found themselves in after GE2011.
He asked Goh whether he considered the factors that caused the MPs to seek the assistance of existing Hougang Town Council managers to form FMSS.
Goh answered that he “doesn’t consider any emotional factor”.
Rajah said no, not an emotional factor, but “a factor of political life”.
Goh said yes, but there was still the TCFR to be followed and his report was just about why wasn’t it being followed.”