FMSS under fire in AHTC trial for improper management

While FMSS offered some important services, the company allegedly failed to complete its duty to the town to the full extent required by law.

SINGAPORE – Mothership and The Straits Times report the Workers’ Party (WP) Aljunied-Hougang Town Council (AHTC) trial continues with executive director Owen Hawkes of KPMG, a global network of firms that provide audit, tax, and advisory services, being cross-examined by lawyer Leslie Netto, who represents defendant How Weng Fan, widow of FM Solutions & Services’ (FMSS) owner Danny Loh, as well as FMSS itself.

During the cross-examination, Hawkes brought up two key issues: AHTC’s fiscal management and AHTC’s relationship with FMSS.

Netto argued the services of FMSS kept residents satisfied, and while Hawkes acknowledged this was important, he maintained the breadth of FMSS’ responsibilities went far beyond the simple satisfaction of residents.

In response to the accusation of mismanagement on the part of FMSS, Netto quoted Fan’s affidavit, which discussed AHTC’s supervision of FMSS. A supervision that supposedly came in the form of various councils, meetings, and visits.

This supervision itself was not disputed by Hawkes, who discussed how KPMG had looked at the minutes of said meetings, but Hawkes argued the meetings “did not address particular KPIs on financial controls” and, in essence, were insufficient.

Similarly to how superficial satisfaction of residents wasn’t enough, Hawkes alleges that while the town avoided outright disaster, there was still a serious lack of sincere financial oversight.

“[H]aving been to Hougang…it’s not as if it’s some kind of Mad Max style wasteland.”

– Owen Hawkes, Executive Director of KPMG

For example, Channel NewsAsia reported a S$60 million payment was processed through manual entry instead of the traditional accounts payable, the accounts payable system itself being an important form of organisational oversight. This lapse in oversight, according to Hawkes, even upset members of the town council, conflicting with Netto’s assertion FMSS kept residents satisfied.

“When we discussed this with the town council, they appeared concerned…I think it was pretty clear at the time that they were not very happy.”

– Owen Hawkes, Executive Director of KPMG

Though, Netto contends this alleged lapse in oversight was the fault of the bureaucracy, considering the absence of the town council management system (TCMS).

“You talked about the accounting problem, and this had got a lot to do with the upgrading of the computer system, and they are not denying it because the TCMS was taken away.”

– Leslie Netto, Defense Lawyer

Hawkes did not dismiss this as a non-issue but argued by the time of KPMG’s investigation and subsequent report, some five years after the incident, the problem should have long since been solved.

“[By] the time KPMG was instructed to perform our review of various instances of non-compliance of the Town Councils Act, that was about five years later, which is quite a long time later… …I don’t think five years later, the accounting system should still be in a problematic state.”

– Owen Hawkes, Executive Director of KPMG

In reference to FMSS’s supposed inability to address concerns in a timely manner, Netto brought up KPMG’s report itself, arguing the four business days Fan was given to address the many allegations of the report were insufficient.

Hawkes, however, stood fast in his position that KPMG had intended to work with FMSS, claiming he had invited FMSS staff to discuss the report; requested documents; and even called Fan herself.

Netto stated Fan, who wrote a letter to KPMG, simply did not receive a reply before the report was published.

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