AHPETC win over MND on Appointment of Independent Accounts

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http://www.straitstimes.com/news/sin...ent-accounts-w
High Court turns down MND request for independent accountants at WP-run AHPETC

SINGAPORE - The High Court will not appoint independent accountants to oversee government grants to the Workers' Party (WP)-run town council.

Justice Quentin Loh said that the Ministry of National Development (MND) has not established legal bases for its court application to appoint the accountants.

Despite the "grave and serious questions" raised over the state of accounts at Aljunied-Hougang-Punggol East Town Council (AHPETC), the judge wrote that "when the Town Councils are set up, the whole idea is to rest the responsibility of the management of the funds as well as the estate with the Town Council."

The law therefore does not allow for the Court to appoint independent accountants to oversee payments made by AHPETC.


High Court turns down MND request for independent accountants at WP-run AHPETC
PUBLISHED ON MAY 27, 2015 5:52 PM 1266 109 1 0
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Justice Quentin Loh said that the Ministry of National Development has not established legal bases for its court application to appoint independent accountants to oversee government grants to the Workers' Party-run Aljunied-Hougang-Punggol East Town Council. -- PHOTO: ST FILE

BY WALTER SIM

SINGAPORE - The High Court will not appoint independent accountants to oversee government grants to the Workers' Party (WP)-run town council.

Justice Quentin Loh said that the Ministry of National Development (MND) has not established legal bases for its court application to appoint the accountants.

Despite the "grave and serious questions" raised over the state of accounts at Aljunied-Hougang-Punggol East Town Council (AHPETC), the judge wrote that "when the Town Councils are set up, the whole idea is to rest the responsibility of the management of the funds as well as the estate with the Town Council."

The law therefore does not allow for the Court to appoint independent accountants to oversee payments made by AHPETC.


MND had wanted independent accountants to sign off on AHPETC payments over $20,000 before it released several million in government grants to the town council.

But in his grounds of decision, released on Wednesday, Justice Loh said that it is a "travesty for AHPETC to have ignored their duties and obligations imposed on them by the Town Councils Act and Town Council Financial Rules."

"They owe a duty and a heavy responsibility to their constituents to run AHPETC properly and it is incumbent on them to put their house and finances in order."

"If AHPETC was a managing corporation ... I have no doubt that AHPETC or its officers will be exposed to the possibility of civil liability or, in an extreme scenario, criminal liability," he added.

In a two-day hearing earlier this month, the MND said that questions remain over the cash flow position and accounting practices of the AHPETC, which has recently missed two sinking fund payments.

AHPETC said that it did not make those payments as it needs the funds to keep daily operations going.

MND has withheld two years of grants to AHPETC - a total of about $15 million - as it said it has no guarantee that those funds would be used properly.

On March 20, MND applied to the court to appoint independent accountants to AHPETC to safeguard government grants.

Earlier this year, serious accounting and governance lapses were discovered at AHPETC by the Auditor-General's Office.

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