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NEA says nothing wrong with Koufu boss giving hefty $64K contract a month for dishwashing to his own brother

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The National Environment Agency (NEA) – the government agency in charge of all the public funded hawker centres in Singapore – has indicated that there’s nothing wrong with Koufu founder Pang Lim giving his brother a hefty dishwashing and table-cleaning contract for his food centres. Both brothers, who are in their 60s, are grassroots leaders.

Koufu is founded by Pasir Ris-Punggol GRC grassroots leader Mr Pang Lim. Mr Pang Lim (PBM), is also the Vice-Chairman of Punggol 21 CC Building Fund Committee as well as Patron of Punggol North CCC and Punggol 21 CCMC.

Interestingly, Mr Pang Lim is also the owner of a building which was flagged for illegal extension on state-owned land, last year.

Koufu also runs Social Enterprise Hawker Centres (SEHCs) through its social enterprise subsidiary Hawker Management. The SEHC that the Koufu-linked company runs was recently thrust into the spotlight when it was reported that hawkers at the SEHC are made to pay $0.20 on behalf of patrons for each tray returned.

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Although NEA – which is led by Brigadier General (NS) Tan Meng Dui – claimed that hawkers were “aware of the charges” in their agreement with Koufu’s social enterprise, the fact remains that hawkers incur costs running up to several hundreds more a month due to this requirement.

Singaporeans, who were outraged to discover these shocking costs that hawkers are forced to contend with, were further riled when they found out about the hefty contract Pang Lim’s Koufu subsidiary inked with his brother’s firm.

Hawker Management has outsourced its dish washing and table cleaning services to GreatSolutions Pte Ltd, a subsidiary of another public listed company GS Holdings Ltd. GS Holdings is founded by Mr Pang Pok. According to disclosure in its annual report, Mr Pang Pok is the brother of Koufu founder Mr Pang Lim.

Like his elder brother, Mr Pang Pok is also a grassroots leader.

The fine print in the hawkers’ contract disclosed that Mr Pang Pok’s company would provide “centralised on and off-premise dishwashing and table top cleaning” services to Hawker Management, Mr Pang Lim’s company, at $63,775 per month. An initial 3-year contract was signed between the 2 brothers’ companies in Sep last year.

Yesterday, NEA indicated to the national broadsheet that there is nothing legally wrong with Mr Pang Lim’s Koufu subsidiary awarding a hefty contract to his brother’s firm.

NEA explained that it requires the social enterprise operator of Jurong West Hawker Centre to make sure that it maintains “open and fair competition”, and a “transparent, value-for-money” system when contracting cleaning services for the SEHC.

The statutory board also noted that the fact that Mr Pang Lim and Mr Pang Pok are brothers has been disclosed and that Mr Lim’s Koufu has been upfront about its relationship with Mr Pok’s GreatSolutions. The agency added that the Koufu IPO prospectus clearly shows that GreatSolutions is an “interested person”.

Under the prospectus, Koufu can only enter into contracts with “interested” parties after procuring competing quotes from at least two unrelated third-party service providers and considering other relevant factors.

Koufu can only award contracts for the provision of certain services by the mandated interested persons if it is “satisfied that the rates or prices from (them) are not higher than the most competitive quote provided by other third-party service providers for comparable services”.

NEA assured: “All such transactions are subject to a rigorous review process and entered into on an arm’s length basis.”

Meanwhile, it must be noted that Koufu has listed another company besides GreatSolutions as an “interested” party. The other interested party is Brightlink Electrical which provides electrical services to Koufu’s food and beverage outlets.

Brightlink is partially owned by Mr Pang Lim and Mr Pang Pok’s brother, Mr Pang Pong San.

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