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Singaporean demand WP to field How Weng Fan of FMSS as candidate of GE2015
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Germain Heng:
Sylvia,
I refer to your response to MND with much interest.
Your letter, albeit emotionally charged and rightfully so since we've entered elections fever, still does not explain why the directors at FMSS were able to sign off their own payments as staff of AHPETC. If the profits of FMSS correspond with the deficits of AHPETC, it would be reasonable for us to conclude that the said directors had overpaid themselves as employees of AHPETC, via AHPETC's coffers. This is further underscored when AHPETC was FMSS's sole client, and hence, revenue was earned by providing services to AHPETC.
It is hence not unreasonable to ask that AHPETC present concrete steps to investigate the allegations of misappropriation and if found true, recover the money of the residents. These monies are not yours but you've a custodian role, and thus responsibility.
Second, as much as I would like to accept that no MAs tendered for AHPETC's contract, it does not explain why FMSS was established mere days after GE2011. Further, if you were worried about handover issues, AHPETC's contract with CPGFM was well within your jurisdiction to continue as they had 2 years left to provide services. I can only conclude that FMSS was set up with the sole purpose to taking over operations of AHPETC, and this was planned immediately after GE2011, not withstanding CPGFM's existing contract.
May I suggest that you stop being a politician for a bit and consider the facts of the matter as it is presented to the public. In my opinion, MND and ACRA have the responsibility to present these facts to the public, election season or not. In fact, because it is election season, they have a greater responsibility to do so in order for voters to make an informed choice.
You, and your team, on the other hand, has chosen to victimise yourselves over the course of the events. For whatever reason this is so, it does not bring any more light to the matter.
I hope you can enlighten me and the rest of my fellow Singaporeans. This should be done because:
1. We are tired of this drawn out process which seems to be so because of an absence of clear, straightforward answers from you and your fellow town councillors.
2. The money that AHPETC had collected belongs to our fellow Singaporeans towards their estate's upkeep.
3. You have a responsibility to be transparent since that was WP's call in GE2011. We cannot allow you to empower the future of our children if these questions are not answered.
Sylvia,
I refer to your response to MND with much interest.
Your letter, albeit emotionally charged and rightfully so since we've entered elections fever, still does not explain why the directors at FMSS were able to sign off their own payments as staff of AHPETC. If the profits of FMSS correspond with the deficits of AHPETC, it would be reasonable for us to conclude that the said directors had overpaid themselves as employees of AHPETC, via AHPETC's coffers. This is further underscored when AHPETC was FMSS's sole client, and hence, revenue was earned by providing services to AHPETC.
It is hence not unreasonable to ask that AHPETC present concrete steps to investigate the allegations of misappropriation and if found true, recover the money of the residents. These monies are not yours but you've a custodian role, and thus responsibility.
Second, as much as I would like to accept that no MAs tendered for AHPETC's contract, it does not explain why FMSS was established mere days after GE2011. Further, if you were worried about handover issues, AHPETC's contract with CPGFM was well within your jurisdiction to continue as they had 2 years left to provide services. I can only conclude that FMSS was set up with the sole purpose to taking over operations of AHPETC, and this was planned immediately after GE2011, not withstanding CPGFM's existing contract.
May I suggest that you stop being a politician for a bit and consider the facts of the matter as it is presented to the public. In my opinion, MND and ACRA have the responsibility to present these facts to the public, election season or not. In fact, because it is election season, they have a greater responsibility to do so in order for voters to make an informed choice.
You, and your team, on the other hand, has chosen to victimise yourselves over the course of the events. For whatever reason this is so, it does not bring any more light to the matter.
I hope you can enlighten me and the rest of my fellow Singaporeans. This should be done because:
1. We are tired of this drawn out process which seems to be so because of an absence of clear, straightforward answers from you and your fellow town councillors.
2. The money that AHPETC had collected belongs to our fellow Singaporeans towards their estate's upkeep.
3. You have a responsibility to be transparent since that was WP's call in GE2011. We cannot allow you to empower the future of our children if these questions are not answered.
Khaw Boon Wan, please as Anchor Minister to contest in Aljunied GRC
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The PAP's trick to fix the opposition is working. Repeat it often enough and it because real. Was having dinner with some friends last night and they actually though WP ran AHPETC into the ground, not knowing about the withholding of grants.. sad.
http://themiddleground.sg/2015/08/30/gross-profiteering-means-leh/
by Bertha Henson
FIRST, let me say that trying to make sense of the National Development Ministry’s statement on AHPETC is like pulling teeth. If you want to make an accusation, you make it “properly”, don’t you? Instead you’ll be left scratching your heads at the accusation of “gross profiteering” by FM Solutions and Services or FMSS, the former managing agent of the Workers’ Party town council.
Why?
What is the definition of profiteering? What is the baseline for comparison?
Profiteering is already pretty gross, so gross profiteering must be just how much more “grosser”?
Is the accusation about FMSS pulling a fast one on the WP, that is, WP was pretty dumb to be taken in and overpay the company? Or was this a nod-nod, wink-wink arrangement among friends who don’t really want to look into each other’s business?
Why now?
Let’s look at some of the figures MND pulled out by getting ACRA to lean on the town council’s previous auditors. (Note that as a limited exempt private company, FMSS did not have to file its accounts with ACRA. But ACRA can audit an auditor in what is known as a “practice assessment” to check if audit opinions are based on appropriate work and sufficient evidence.)
MND’s key statement or bottomline is this: In FY13/14, while AHPETC suffered an operating deficit of $2 million, FMSS made a net after-tax profit of $2 million, after paying its directors/shareholders fees and salaries amounting to $1.14 million.
So the question that follows is: How is it that the town council can suffer a deficit while its managing agent makes $3.14 million, enough to cover the deficit?
“Had the TC not overpaid FMSS, it might well have had been able to break-even,” said MND.
In the WP’s very quick reply to the MND statement, chairman Sylvia Lim reiterated that the contract between FMSS and the town council was aboveboard: “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.”
Which looks all right to this layman. You agreed, therefore, you pay.
The next question then is: How much did the AHPETC pay FMSS in terms of managing agent fees? According to MND, FMSS revenue is $6,740,572 in FY12/13 and $8,773,429 in FY13/14. Presumably revenue went up because Punggol East was taken into the WP fold in May 2013.
Was this too much to pay?
Ms Lim, who had released both MND’s letter to her and her response, said that “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.”
This echoed what she had said in an earlier open letter to Aljunied residents where she also iterated: “… our contractual commitments with FMSS have been based on strict reasoning using available market information in 2012 when tender was called in the absence of competing bids, while placing residents’ interests in undisrupted services at the forefront.”
You would recall that there was plenty of ding dong over the rates which were based on the commercial and residential units within the town council ambit. And whether it was higher or lower than the PAP town councils. It’s too messy to get into such detail, but let’s say if Ms Lim is right about the “fairness” of the fee, what’s the question that follows?
Is FMSS making “too much” profit and how is it able to do so?
According to MND figures, the three directors (who are also the only three shareholders) received $1m in secretarial and consultancy fees, salaries and other bonuses in FY2012/13. The company’s after-tax profit is $510,904. Lumped together, this means the directors’ profit is $1.5 million, or 22 per cent of the annual revenue. MND’s letter did not state whether the fees and salaries paid to the director/shareholders were fair or at market rates.
IN FY2013/14, the four directors (one more was added, and he also became a shareholder of FMSS) received $1,139,696 in fees and salaries and the company declared an after-tax profit of $2 million. Lumped together, this puts the directors profits at $3.1 million or 36 per cent of annual revenue. It is unusual, however, to consider the directors’ remuneration and other fees as part of a company’s profitability, and it is unclear why MND did this and presented the 36 per cent figure.
Are these big or small figures?
Here’s where the MND falls down. It describes them as “abnormal” profits and expects the layman to know enough to agree.
Ms Lim is therefore right to say that “it is… 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”.
She added that AHPETC “does not ask its contractors about their profitability or internal arrangements”. In other words, the WP doesn’t know, or believes it is not its place to know, what profit margins contractors make. Private sector businessmen would appreciate that no one should poke their noses into how they make their money. Most times, it is the competitive market which determines the level of profits. Too high, and no one will award you the tender. Too low, and you would wish you had never taken the job in the first place.
Except that in this case, only FMSS put itself forward, which is Ms Lim’s argument: “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.”
(I have a problem with her reply. So is the AHPETC paying too much after all since she is referring to financial disadvantage? I also have another question: why did the husband-and-wife team behind FMSS see the need to set up a company to do what they had been doing before as AHPETC employees? The AHPETC would have saved a lot of money by paying them salaries. Instead, FMSS is making $3 million from having AHPETC as its sole client.)
There is one point that MND made which Ms Lim did not respond to. It was over how AHPETC’s own independent auditor looking at the FY13/14 accounts found that “the TC’s Deputy General Manager, who was also a shareholder and director of FMSS, certified invoices received from FMSS totalling $2.1 million on behalf of the TC, and subsequently also approved the related payment vouchers by the TC to FMSS, with no segregation of duties.”
This is a reference to the oft-heard “related party transactions” in which the same party was approving payments to itself, but without full disclosure or proper oversight. During the period when FMSS was managing AHPETC, the late Mr Danny Loh, who died while on holiday abroad earlier this year, and Ms How Weng Fan were also the TC’s Secretary and General Manager (GM).
Now the the Auditor-General’s Office had tried to obtain documents on such transactions from AHPETC repeatedly without success. But even without some of the documents, the AGO was able to conclude that there were “control gaps” in the payment processes which led to the “risk that payment might not be fully justified or properly computed”.
It is a pity that Ms Lim didn’t address this point, as people would be left wondering if this was how FMSS had managed to make profits by some kind of double-counting or surreptitious overpayment.
Ms Lim, however, took issue with the timing of the release of the MND statement. In its letter to the AHPETC, MND had said that it was “reviewing” the ACRA’s findings, but had some “preliminary observations to make”. Said Ms Lim: “We… question your Ministry’s political motivation for issuing a public release on this matter at such a premature stage.”
I have to say that I had initially thought the findings were, well, final, because there was nothing in the press statement to say that they were just preliminary observations.
So after all that sound and fury, neither the MND nor AHPETC gave answers that would satisfy those who are interested to find out just what in heaven’s name is going on.
I am actually waiting for a few more installments. That MND will explain what is gross profiteering and how other managing agents make profits. That either MND or AHPETC would make public its FY14/15 accounts which are supposed to have been filed by the end of the month, that is, in two days. That the court will release its judgment on whether it will allow the G to send in independent accountants to look over the work of the AHPETC.
What’s the bet that everything will happen pretty soon?
http://themiddleground.sg/2015/08/30/gross-profiteering-means-leh/
by Bertha Henson
FIRST, let me say that trying to make sense of the National Development Ministry’s statement on AHPETC is like pulling teeth. If you want to make an accusation, you make it “properly”, don’t you? Instead you’ll be left scratching your heads at the accusation of “gross profiteering” by FM Solutions and Services or FMSS, the former managing agent of the Workers’ Party town council.
Why?
What is the definition of profiteering? What is the baseline for comparison?
Profiteering is already pretty gross, so gross profiteering must be just how much more “grosser”?
Is the accusation about FMSS pulling a fast one on the WP, that is, WP was pretty dumb to be taken in and overpay the company? Or was this a nod-nod, wink-wink arrangement among friends who don’t really want to look into each other’s business?
Why now?
Let’s look at some of the figures MND pulled out by getting ACRA to lean on the town council’s previous auditors. (Note that as a limited exempt private company, FMSS did not have to file its accounts with ACRA. But ACRA can audit an auditor in what is known as a “practice assessment” to check if audit opinions are based on appropriate work and sufficient evidence.)
MND’s key statement or bottomline is this: In FY13/14, while AHPETC suffered an operating deficit of $2 million, FMSS made a net after-tax profit of $2 million, after paying its directors/shareholders fees and salaries amounting to $1.14 million.
So the question that follows is: How is it that the town council can suffer a deficit while its managing agent makes $3.14 million, enough to cover the deficit?
“Had the TC not overpaid FMSS, it might well have had been able to break-even,” said MND.
In the WP’s very quick reply to the MND statement, chairman Sylvia Lim reiterated that the contract between FMSS and the town council was aboveboard: “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.”
Which looks all right to this layman. You agreed, therefore, you pay.
The next question then is: How much did the AHPETC pay FMSS in terms of managing agent fees? According to MND, FMSS revenue is $6,740,572 in FY12/13 and $8,773,429 in FY13/14. Presumably revenue went up because Punggol East was taken into the WP fold in May 2013.
Was this too much to pay?
Ms Lim, who had released both MND’s letter to her and her response, said that “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.”
This echoed what she had said in an earlier open letter to Aljunied residents where she also iterated: “… our contractual commitments with FMSS have been based on strict reasoning using available market information in 2012 when tender was called in the absence of competing bids, while placing residents’ interests in undisrupted services at the forefront.”
You would recall that there was plenty of ding dong over the rates which were based on the commercial and residential units within the town council ambit. And whether it was higher or lower than the PAP town councils. It’s too messy to get into such detail, but let’s say if Ms Lim is right about the “fairness” of the fee, what’s the question that follows?
Is FMSS making “too much” profit and how is it able to do so?
According to MND figures, the three directors (who are also the only three shareholders) received $1m in secretarial and consultancy fees, salaries and other bonuses in FY2012/13. The company’s after-tax profit is $510,904. Lumped together, this means the directors’ profit is $1.5 million, or 22 per cent of the annual revenue. MND’s letter did not state whether the fees and salaries paid to the director/shareholders were fair or at market rates.
IN FY2013/14, the four directors (one more was added, and he also became a shareholder of FMSS) received $1,139,696 in fees and salaries and the company declared an after-tax profit of $2 million. Lumped together, this puts the directors profits at $3.1 million or 36 per cent of annual revenue. It is unusual, however, to consider the directors’ remuneration and other fees as part of a company’s profitability, and it is unclear why MND did this and presented the 36 per cent figure.
Are these big or small figures?
Here’s where the MND falls down. It describes them as “abnormal” profits and expects the layman to know enough to agree.
Ms Lim is therefore right to say that “it is… 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”.
She added that AHPETC “does not ask its contractors about their profitability or internal arrangements”. In other words, the WP doesn’t know, or believes it is not its place to know, what profit margins contractors make. Private sector businessmen would appreciate that no one should poke their noses into how they make their money. Most times, it is the competitive market which determines the level of profits. Too high, and no one will award you the tender. Too low, and you would wish you had never taken the job in the first place.
Except that in this case, only FMSS put itself forward, which is Ms Lim’s argument: “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.”
(I have a problem with her reply. So is the AHPETC paying too much after all since she is referring to financial disadvantage? I also have another question: why did the husband-and-wife team behind FMSS see the need to set up a company to do what they had been doing before as AHPETC employees? The AHPETC would have saved a lot of money by paying them salaries. Instead, FMSS is making $3 million from having AHPETC as its sole client.)
There is one point that MND made which Ms Lim did not respond to. It was over how AHPETC’s own independent auditor looking at the FY13/14 accounts found that “the TC’s Deputy General Manager, who was also a shareholder and director of FMSS, certified invoices received from FMSS totalling $2.1 million on behalf of the TC, and subsequently also approved the related payment vouchers by the TC to FMSS, with no segregation of duties.”
This is a reference to the oft-heard “related party transactions” in which the same party was approving payments to itself, but without full disclosure or proper oversight. During the period when FMSS was managing AHPETC, the late Mr Danny Loh, who died while on holiday abroad earlier this year, and Ms How Weng Fan were also the TC’s Secretary and General Manager (GM).
Now the the Auditor-General’s Office had tried to obtain documents on such transactions from AHPETC repeatedly without success. But even without some of the documents, the AGO was able to conclude that there were “control gaps” in the payment processes which led to the “risk that payment might not be fully justified or properly computed”.
It is a pity that Ms Lim didn’t address this point, as people would be left wondering if this was how FMSS had managed to make profits by some kind of double-counting or surreptitious overpayment.
Ms Lim, however, took issue with the timing of the release of the MND statement. In its letter to the AHPETC, MND had said that it was “reviewing” the ACRA’s findings, but had some “preliminary observations to make”. Said Ms Lim: “We… question your Ministry’s political motivation for issuing a public release on this matter at such a premature stage.”
I have to say that I had initially thought the findings were, well, final, because there was nothing in the press statement to say that they were just preliminary observations.
So after all that sound and fury, neither the MND nor AHPETC gave answers that would satisfy those who are interested to find out just what in heaven’s name is going on.
I am actually waiting for a few more installments. That MND will explain what is gross profiteering and how other managing agents make profits. That either MND or AHPETC would make public its FY14/15 accounts which are supposed to have been filed by the end of the month, that is, in two days. That the court will release its judgment on whether it will allow the G to send in independent accountants to look over the work of the AHPETC.
What’s the bet that everything will happen pretty soon?
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The 3 friends at #FMSS gets paid more the 7 WP MPs. The 7 MPs together earned $1.2million a year, while the 3 shareholders profiteered grossly from the taxpayers, overpaying themselves with $1.5million in FY12/13 which doubled to $3million in FY13/14. Together they run AHPETC to the ground with ever increasing deficit. AHPETC runs an operating deficit of $1.5million in FY12/13 & $2million in FY13/14.
WP had a conflict of interest because its "friends" in FMSS were a potential source of donation. The conflict was between the interest of its party coffer and the residents' pockets. The question now is how much FMSS and its directors donated to WP & its proxies.
WP had a conflict of interest because its "friends" in FMSS were a potential source of donation. The conflict was between the interest of its party coffer and the residents' pockets. The question now is how much FMSS and its directors donated to WP & its proxies.
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Stop using the people of Singapore to drive your agenda.
old man wake up and give son a tight slap
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Those "friends" are planning to come up with the defence that the money collected was meant as a slush fund as they realise how serious this is and that criminal charges will be laid after the elections. Their conviction is almost a certainty and they will face jail time.
They will now try to forcibly "donate" the profits to WP and WP will forcibly reject this "donation". This is because both parties know that they are truly fucked, that the shit is going to hit the ceiling after the elections on 11th September. Both WP and their "friends" are scrambling to cover their arses.
Meanwhile, a lacklustre PEH, as the only member to retain a WP seat in this election, is in a quandary. Does he take over the party SGship that he is not interested in after the elections?
Watch out for more cheap theatre from our first World WP Parliamentarians and fearless PAP co-drivers extraordinaire.
Akan datang...
They will now try to forcibly "donate" the profits to WP and WP will forcibly reject this "donation". This is because both parties know that they are truly fucked, that the shit is going to hit the ceiling after the elections on 11th September. Both WP and their "friends" are scrambling to cover their arses.
Meanwhile, a lacklustre PEH, as the only member to retain a WP seat in this election, is in a quandary. Does he take over the party SGship that he is not interested in after the elections?
Watch out for more cheap theatre from our first World WP Parliamentarians and fearless PAP co-drivers extraordinaire.
Akan datang...
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