Judgement of the Appeal Court

In arriving at its decision, the Court of Appeal had found that AHPETC had breached the Town Councils Act by failing to “‘do all things necessary to ensure’ that (a) its payments are correctly made and properly authorised; and (b) adequate control is maintained over its assets and expenditure”.

The Court noted, in particular, the following:

(a) There “were various lapses in internal controls, which exposed AHPETC to the risk of the loss of money or valuables, commitment to expenditure without requisite approval as well as wrong payment for goods and services”.

(b) There was “inadequate oversight of related party transactions” by AHPETC and “key officers of AHPETC also acted in clear conflict of interests when they approved payment to FMSS (a company in which they were themselves the directors and shareholders)”.

(c) It did not appear that AHPETC “had (or has as yet) seriously considered whether and, if so, what steps need to be taken to recover possible sums due from wrong payments”.

(d) AHPETC “did not have a system to monitor the scale of its conservancy and service arrears accurately” and “did not have a proper system to ensure that documents were properly accounted for and safeguarded, and its accounting systems and procedures were inadequate”.

http://app.mnd.gov.sg/Portals/0/Joint%20MND%20and%20HDB%20statement_Annex%20A_27112015.pdf