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PAP town councils became poorer after they sold software to shell company AIM, Hougang MP

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Hougang MP Png Eng Huat took to Facebook earlier today to remind the public about the People’s Action Party (PAP) shell company, Action Information Management Pte Ltd (AIM). The MPs post is trending with over 700 shares and is being widely circulated in social media and online forums.AIM was at the centre of the Aljunied-Hougang Town Council’s (AHTC) debacle in town council management issues, and has been struck off ACRA.

https://theindependent.sg.sg/pap-owned-company-aim-at-the-heart-of-wps-legal-trouble-has-been-struck-off-acra/

In June 2010, the PAP called for an “open tender” to sell TCMS. This was when AIM, a company with a paid-up capital of $2 and owned by PAP, submitted the sole bid and won the rights to buy over the software.  It is unclear how much the PAP town councils paid NCS to develop the software, but it was sold to AIM for $140,000. The software was finally transferred to AIM in Jan 2011, 4 months before 2011 General Election.

After the transfer, AIM leased the software back to PAP town councils for a fee of $785 a month. AIM retained NCS to maintain and further develop the system.

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AIM did not only have $2 in paid-up capital, but it also only emlpoyed two part-time staff. Its three directors were all former PAP MPs: Mr S. Chandra Das, Mr Chew Heng Ching and Mr Lau Ping Sum.

AIM later terminated its contract with AHTC in Aug 2011, which caused much distress to the Workers’ Party.

The Hougang MP in reminding the public why today was significant said:

“Today in history…

Exactly eight year ago on 12 October 2010, 14 PAP TCs collectively awarded the tender for the sale of their Town Council Management System (TCMS) software to Action Information Management Pte Ltd (AIM), a PAP-owned $2 company, for $140,000. The TCs then leased back the software for one year at $131,880, effectively selling the TCMS software for only $8,120.

The 2013 MND Town Council Review Report (TCRR) said the PAP TCs paid AIM another $33,150 in management fees after the leaseback period to extend system support for another 18 months.

AIM is basically a shell company. In its tender submission to purchase the TCMS software, under “Particulars and employment history of professional/supervisory/technical staff, if applicable”, it listed “Outsourced”.

So from a reported gain, the PAP TCs became poorer by $25,030 after the sale of their software. This was because the 14 TCs had an existing contract with NCS, which they had to novate to AIM to facilitate continual system maintenance. The TCs had to pay to two parties instead of one as a result.

In the tender evaluation and recommendation report by the IT & Productivity Committee, there was neither any mention of the directors’ shareholdings nor that AIM is a PAP-owned company.

AIM subsequently gave notice to ATC to terminate the use of TCMS software shortly after GE2011, on 22 June 2011.

In addressing the issue of conflict of interest, MND, in its 2013 report, assessed that “the PAP TCs had acted in good faith in the interests of their residents” and exonerated the AIM transaction, citing the following points:

(a) There was no pecuniary or material interest by any Town Council member in AIM or in the contract awarded to AIM in 2010.

(b) The PAP Town Councils complied with the open tender process under the Town Councils Act and Town Councils Financial Rules (TCFR).

(c) The acceptance of a single bid for award is permissible under the TCFR as long as it satisfies the tender requirements and evaluation criteria.

(d) AIM did not make a profit from the TCMS transaction in 2010; its Directors were not paid any fees and it charged only a fee to cover its operational costs.

(e) There was no misuse or loss of public monies in the transaction.

(f) In the light of the above findings, the team concluded that the AIM transaction in 2010 has complied with the Town Councils Act and the Town Councils Financial Rules.

The original price of TCMS paid by the 14 TCs is $23.8 million (Application software – $14.3m, hardware and system software – $9.5 million).”

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