FMSS has been 'grossly profiteering' off AHPETC: MND
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SINGAPORE: The former managing agent of Aljunied-Hougang-Punggol East Town Council (AHPETC) FM Solutions and Services (FMSS) has been "grossly profiteering" off the town council which is its sole client, the Ministry of National Development (MND) found.
MND said the Accounting and Corporate Regulatory Authority (ACRA) conducted an ad-hoc review of FMSS' auditor, Teo Liang Chye and Co. In FY 2013/2014, while AHPETC suffered an operating deficit of S$2 million, FMSS made a net after-tax profit of S$2 million, after paying its directors and shareholders fees and salaries amounting to S$1.14 million, MND said in a statement on Saturday (Aug 29).
FMSS was managing agent (MA) for the Workers' Party-run AHPETC from July 15, 2011 to July 14, 2015. In AHPETC’s FY2013/2014 financial statements and reports, its independent auditor, Audit Alliance LLP, found that AHPETC’s deputy general manager, who was also a shareholder and director of FMSS, certified invoices received from FMSS totalling S$2.1 million on behalf of the town council, and subsequently also approved the related payment vouchers by the TC to FMSS, with no segregation of duties, the ministry said.
"This reinforced MND’s concerns about the TC’s state of financial management, and in particular, whether payments made by the TC to FMSS were valid and proper," it added. ACRA started a practice monitoring review on FMSS' auditor and submitted its findings to MND on Aug 27.
On examining the accounts, MND said it found:
For FY2012/2013
FMSS made a profit after tax of S$510,904. This was after FMSS paid its three owners/directors, fees and salaries of S$702,295, and consultancy and secretarial fees of S$300,000 .
Total payments to the three FMSS Owners/Directors for FY2012/2013 amounted to S$1,513,199.
For FY2013/2014
FMSS made a profit after tax of S$2,035,784. This was after FMSS paid its four owners/directors fees and salaries of S$839,696, and consultancy and secretarial fees of S$300,000 .
Total payments to the four FMSS owners/directors for FY2013/2014 amounted to S$3,175,480.
Between FY2012/2013 and FY2013/2014
While FMSS’ revenue increased by 30 per cent in one year, from S$6,740,572 to S$8,773,429, its profit after tax rose 300 per cent, from S$510,904 to S$2,035,784.
Total payments by AHPETC to FMSS owners and directors amounted to 22 per cent of FMSS’ revenue in FY12/13. It grew further to 36 per cent in FY2013/2014. "Such levels of profit margin are abnormal," said MND. "As AHPETC was FMSS’ only client, these findings support MND’s earlier concern that the TC had overpaid FMSS excessively."
Additionally, MND noted that AHPETC had an operating deficit of S$1.5 million in FY2012/2013, and a further deficit of S$2 million in FY2013/2014. "Had the TC not overpaid FMSS, it might well have had been able to break-even," MND said.
The ministry has written to Ms Sylvia Lim, the immediate-past chairman of AHPETC "to ask if she was aware of the extent of profiteering in FMSS, and if so since when had she known, and what she had done about it". MND has also asked Ms Lim if she has examined past transactions of the town council with FMSS, and how she intends to recover the monies lost due to any overpayment.
"As FMSS was paid using Service & Conservancy Charges (S&CC) collections from residents and S&CC operating grants from MND, public monies are at stake," the ministry said. "What happened between the town council and FMSS is not a private matter, but one which MND needs to look into. MND is therefore making a public statement on this matter of public interest, which underscores why MND has applied to the Court to appoint independent accountants."
MND is appealing against a High Court decision after it rejected MND's application to have independent accountants appointed to oversee Government grants to AHPETC.
Law and Foreign Affairs Minister K Shanmugam said FMSS made "huge profits" from AHPETC. Speaking to the reporters on the sidelines of an event at Sree Narayana Mission Home, he said the town council did not provide this information to auditors and the Auditor-General's Office.
"They refuse to give information on related-party transactions, on transactions with FMSS. It's obvious overcharging. They were asked in Parliament if they were going to recover this money. And they said 'No, everything was above board'. They will not recover (the money), because it was all fair. And they justified the payments without disclosing the details."
WP APPALLED BY MND'S "SERIES OF CARELESS ACCUSATIONS"
In response Ms Lim wrote to a senior director in MND on Saturday. In a letter shared on the Workers' Party (WP) website, she stated: "We are appalled at the series of careless accusations made by your ministry against Aljunied Hougang Punggol East Town Council (AHPETC). It is shocking that despite our clarifications on your allegations relating to lost monies and overpayment, your ministry continues to make spurious statements to distract the public and aimed at politically discrediting AHPETC."
Ms Lim, who is chairman of WP, said FMSS was appointed managing agent for AHPETC through a public tender and won a contract to provide Essential Maintenance Services Unit services through an open tender. "Payments made by AHPETC to FMSS were made pursuant to these contracts. Payment in accordance with contracts cannot be overpayment," she wrote.
"We wish to highlight that arrangements between FMSS and its employees are entirely commercial and not within the control of AHPETC," she added. "I am not aware of the matters you have highlighted therein, as AHPETC does not ask its contractors about their profitability or internal arrangements. We emphasise that AHPETC has ensured that payments made to FMSS are in line with and within the budget provided under the tender awarded.
"It is also ambiguous as to what the ministry means by an 'abnormal' profit margin, when it is not clear what the other MAs’ levels of profit are in other town councils."
"It is unfortunate that the political environment has put non-PAP town councils at a financial disadvantage due to the lack of competitive bidders. Your ministry ought to recognise the existence of an imbalanced system and take into consideration the political reality of the situation," Ms Lim countered.
"We also question your ministry’s political motivation for issuing a public release on this matter at such a premature stage, when you say that your ministry has not even completed a review of the findings by ACRA."
AHPETC currently has no managing agent, after no one came forth to submit a bid.
- CNA/ly
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Good profits means keeping cost down.
If they think that it is fraudulent, they should let the police and AG handle the matter.
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KBW talking out of his arse again. This time there will be no mercy for him.
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With NSP Contesting in Sembawang, he'll be elected again
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29 August 2015 To: Mr Han Kok Juan Senior Director (Housing) Ministry of National Development Dear Mr Han, FMSS’ ACCOUNTS We refer to your letter, received today. We are appalled at the series of careless accusations made by your Ministry against Aljunied Hougang Punggol East Town Council (AHPETC). It is shocking that despite our clarifications on your allegations relating to lost monies and overpayment, your Ministry continues to make spurious statements to distract the public and aimed at politically discrediting AHPETC. A copy of our Open Letter to Residents published in June 2015 can be found at this link (http://www.ahpetc.sg/sylvia-lims-open-letter-to-residents/) for your reference. We reiterate that FM Solutions & Services Pte Ltd (FMSS) was appointed the Managing Agent (MA) of the AHPETC for FY 12/13 and FY 13/14 pursuant to a contract awarded through a public tender. Similarly, FMSS bid for, and was awarded, a contract to provide Essential Maintenance Services Unit (EMSU) services, after an open tender. Payments made by AHPETC to FMSS were made pursuant to these contracts. Payment in accordance with contracts cannot be overpayment. With regard to paragraphs 3 to 5 of your letter, we wish to highlight that arrangements between FMSS and its employees are entirely commercial and not within the control of AHPETC. I am not aware of the matters you have highlighted therein, as AHPETC does not ask its contractors about their profitability or internal arrangements. We emphasise that AHPETC has ensured that payments made to FMSS are in line with and within the budget provided under the tender awarded. In any case, it is misleading and unfair to compare MA rates charged by FMSS with MAs of other town councils under the People’s Action Party (PAP), since their MAs did not submit a single bid for our public tender for MA services in 2012. FMSS’ bid for MA services in 2012 was assessed, using the former rates charged by CPG Facilities Management for the PAP-managed Aljunied TC as a baseline. It is also ambiguous as to what the Ministry means by an “abnormal� profit margin, when it is not clear what the other MAs’ levels of profit are in other town councils. It is unfortunate that the political environment has put non-PAP town councils at a financial disadvantage due to the lack of competitive bidders. Your Ministry ought to recognise the existence of an imbalanced system and take into consideration the political reality of the situation. Lastly, our stand remains that there is no basis for your Ministry to apply to the Court to appoint Independent Accountants. We also question your Ministry’s political motivation for issuing a public release on this matter at such a premature stage, when you say that your Ministry has not even completed a review of the findings by ACRA. SYLVIA LIM IMMEDIATE PAST CHAIRMAN ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL
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if u own a business, the idea is to profit, rite?
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Here is the link:- http://www.ahpetc.sg/wp-content/uploads/2015/08/Letter-from-MND-to-AHPETC-Ms-Sylvia-Lim-20150829.pdf Questions Why is a civil servant engaging in partisan politic? Shouldn't a civil servant adheres to strict code of conduct by not engaging in smear campaign? Isn't it the duty of the govt of the day to bring the Workers Party to a court of law if it feels that they are guilty? And let the court proves and pronounces them guilty? Why is a civil servant, out of no where, appears during election to play partisan politic. Shouldn't someone initiates disciplinary/legal action such civil servant?
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Submitted by farhan on Sun, 30/08/2015 - 9:53am
Dear Editors,
AdvertisementAfter MND's released its statement accusing WP's former managing agent FMSS of grossly profiteering from AHPETC, sharp-eyed netizens have spotted an oddity in the Straits Times media reporting.
For the MND statement which was released at 5pm, the Straits Times was able to write their 12730 words report on the matter in just 17 minutes. Based on wikipedia, the fastest typing speed in the world is 216 words per minute, making it impossible for the ST reporter to have written the article in time.
Does this means that The Straits Times received the MND statement on FMSS accounts very much earlier? Is this a coordinated attempt to damage the reputation of AHPETC and Workers Party? Is this a breach of the law to release such confidential information to the media early?
Is this the normal behaviour expected of a Free Press? Should such behind the scenes dealings be allowed in our media industry?
Benny Tham
A.S.S. Contributor- See more at: http://www.allsingaporestuff.com/article/154-media-had-early-knowledge-mnd-statement-ahpetcs-gross-profiteering#sthash.lyd2Wlcq.dpuf
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$600,000 is peanut , what nut is $2m?
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MND, bullshiting before the elections ah?
KBW, you think it is easy against the NSP ("No Standard Party")? I don't think so.
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Dirty tactics their usual business. No dirty tactic they will lose identity.
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Kbw is a disappointment. Used to have good impression of him.
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Originally posted by SMB145B:
MND, bullshiting before the elections ah?
KBW, you think it is easy against the NSP ("No Standard Party")? I don't think so.
if they slay the dragon, what is left?
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Arrangement to reward supporters a 'very sad outcome' for AHPETC residents: Khaw
SINGAPORE: The contract awarded by the Workers' Party to FM Solutions and Services (FMSS), the former Managing Agent (MA) for the Aljunied-Hougang-Punggol East Town Council (AHPETC), was an “arrangement to reward their supporters and friends”, said National Development Minister Khaw Boon Wan on Sunday (Aug 30).
The arrangement has resulted in a “very sad” outcome for AHPETC residents, as they end up losing money because the town council was “rewarding their friends excessively”, he added.
His comments come a day after the Ministry of National Development (MND) released a press release stating FMSS "grossly profiteering" off the town council.
The MND said the Accounting and Corporate Regulatory Authority (ACRA) conducted an ad-hoc review of FMSS' auditor, Teo Liang Chye and Co. In FY 2013/2014, while AHPETC suffered an operating deficit of S$2 million, FMSS made a net after-tax profit of S$2 million, after paying its directors and shareholders fees and salaries amounting to S$1.14 million, the MND said in a statement on Saturday (Aug 29).
Mr Khaw described the contract as “very rich” and one that was “able to make so much money that it can reward four of the shareholders and directors more than S$3 million a year and still make a profit”.
“So I was surprised to read that Workers' Party finds that there was no over-payment," he said.
He also questioned what’s next for AHPETC, after the opposition party decided to manage the town council internally as no company had put in a bid to be the MA.
"So now they've sacked FMSS, terminated the contract, and do it in house. They need to recruit their own GM and their own secretary. Are they also rewarding them at $3 million a year, since they think S$3 million is fine?” Mr Khaw said.
As for the timing of the MND press release, which was issued at 5pm on Saturday, Mr Khaw said there was "nothing unusual" about it, referring to the sequence of events explained in Saturday’s statement.
The MND said after receiving the financial statements and reports on Jul 9, it wrote to ACRA to ask if it had any concerns about the quality of FMSS’ accounts and the audit process that validated them. ACRA then commenced a practice monitoring review on FMSS’ auditor, Teo Liang Chye and Co, on Aug 14, after giving them one month’s notice. ACRA has completed its review and surfaced its findings to MND on Aug 27.
CONTRACTS AWARDED OPEN TO SCRUTINY: LIM
In response to the MND statement, the Workers' Party Chairman Sylvia Lim on Saturday said the party was "appalled" at the series of careless accusations made by the ministry against AHPETC.
She said FMSS was appointed managing agent for AHPETC through a public tender and won a contract to provide Essential Maintenance Services Unit services through an open tender. "Payments made by AHPETC to FMSS were made pursuant to these contracts. Payment in accordance with contracts cannot be overpayment," she added.
Ms Lim also fielded questions on Mr Khaw's comments on Sunday, during the party's unveiling of four more new candidates. She said she was not sure which contract the Minister was referring to, but in any case, the MND statement was pertaining to the FY 2012/13 and FY 2013/14 and they were awarded after an open public tender was called.
"In fact, during the audits by the AGO, all our papers were open to the auditors to look at, the way the contract was assessed and so on. There has been no finding by the AGO or anyone that we did not exercise due diligence in our assessment of the contract price," she said.
As to how FMSS officers were remunerated, Ms Lim said this was an internal matter within FMSS. "This is a typical situation where the town council outsources all the services to a company. So what the company does among themselves, how much they pay their own officers – that is an internal matter for them.
"What we assess is based on services rendered and what is the fair pricing for that service. So internally whatever they do, that is not something the TC is privy to."
The WP’s Png Eng Huat also stressed during the same press briefing that the profit margins of MA agents cannot be determined as they are open tenders.
"It’s the same as if MND were to tender out contracts to build houses: Do you go and check on the contractors, how much they pay their directors? How much profit they make? Because it affects your prices of flats? I mean, do you do that? It just doesn’t make sense," he said.
- CNA/kk
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Chao kuan, hoping this will discourage electorate to vote wp.
Hei xing ..... xi wang hao xiong ti dai chuan bai yi zhen zi dang li kai.
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Say all these no use
Share as much as possible thru social media
Dont let MSM and IBs monopolise the news
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so our 154th media again
losing credibility, so now make WP so much worse. i think PAP have zero credibility right from the start lor.
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Originally posted by SMB145B:
so our 154th media again
losing credibility, so now make WP so much worse. i think PAP have zero credibility right from the start lor.
I have been to those few WP estates, surprise they do a good job to keep the estate clean. Potong pasir when under chiam also well maintained, have not gone p pasir now to see if it is still well maintained.
When i went to a few places in Ang Mo Kio, the lift area dirty and smell of urine. The carpark full of dried fallen leaves, look like leaves been there for more than a few days. Shame shame, lee hsien loong, only interested in $$$$ and maintenance is lousy. How to respect lhl? So b4 you people fix the opps, look yourselves in the mirror.
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how come no one barks when some town councils lost millions in investment?
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let people go and judge
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Originally posted by lce:
how come no one barks when some town councils lost millions in investment?
Because nobody pay anybody to bark.
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http://www.tnp.sg/news/singapore-news/fmss-issues-legal-letter-ahpetc-says-it-owed-35m
MND say FMSS make too much money.
Not FMSS say they never got paid.
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our press ranking will drop further ...
with sources like these
Toilet New Paper
Shit Times
MediaCrapall shooting FMSS
when AIM is even worse off
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Originally posted by SMB145B:
our press ranking will drop further ...
with sources like these
Toilet New Paper
Shit Times
MediaCrapall shooting FMSS
when AIM is even worse off
AIM, is it under the carpet now?