Not profiteering. But politicking?

Social media has been abuzz with questions relating to the role of Action Information Management Pte Ltd in the leaseback agreement with 14 PAP Town Councils.  There have been suggestions by some netizens that there should be a CPIB investigation and other suggestions that AIM is but an example of profiteering at the expense of citizens. 

Based on information that is so far available:

1.  The 3 directors of AIM are PAP members. Two of those 3 are also shareholders of AIM
2.  Dr Teo Ho Pin, the coordinating chairman is reported to have claimed that AIM is a PAP owned company. (technically, the company is owned by Chandra Das and Lau Ping Sum and not PAP, the political party.)
3.  The company has a paid up capital of $2.
4.  Dr Teo has stated that there was a tender process for the sale and leaseback of the computer systems and that only AIM made a bid even though there were 5 companies that collected the forms.
5.  Dr Teo also confirmed that only the software was sold to AIM at $140,000 and the terms of the leaseback was for the Town Councils to pay $785 per month per Town Council. 
6.  Chandra Das (Director of AIM) has stated that he and his fellow directors do not receive any directors' remuneration. 
7.  It has also been confirmed that the original service provider (NCS) that developed and maintained the system for the 14 Town councils is still providing the services under the leaseback arrangement as AIM has engaged NCS to maintain and develop the system. 

I am going to take all the facts above as true and accept Dr Teo and Mr Chandra Das' statements as true.  In fact, I am going to give Mr Chandra Das the benefit of the doubt.  Let us assume that the shareholders of AIM have not and will not be given any dividend.  AIM has entered into a transaction that is clearly profitable.  However, the Directors do not get any remuneration and the shareholders do not get any dividends.  In such an arrangement, there is a potential for profits to accumulate year on year.  What is going to be done with these profits eventually? 

A quick calculation of the rate of returns has alerted many people to the possibility of profiteering by AIM.  But, I do not think that this is an instance of profiteering.  After all, AIM has engaged NCS to maintain and develop the system.  In all likelihood, the $785 per month per Town Council is entirely channeled towards payments to be made to NCS as the service provider.  There is a high probability that AIM (having, presumably, no skilled personnel or infrastructure) is a middle man that is not deriving any profit at all. 

This is a leaseback arrangement that probably produces no profit for AIM and one where NCS continues to be the ultimate service provider at arguably more or less the same rate as before the leaseback.  After accepting Chandra Das' assertion as true and giving further benefit of the doubt so as to remove any suggestion of impropriety, we have to render the leaseback agreement as a zero profit venture for AIM. 

Why would a company go through a tender process and choose to make no profit at all unless there was some other purpose for the transaction?  I suspect that this transaction had nothing to do with profiteering and everything to do with politicking.  Nothing illegal.  Just dirty politics. 

The new contract with AIM containing the termination clause in the event of change in management was most probably intended to frustrate opposition parties in the event that a Town Council management ended up in the hands of the opposition.  Given the fact that Town Council management runs parallel to the seats won by MPs, the possibility of a change in management is always going to be inevitable.  The termination clause was probably inserted in anticipation of electoral defeat in some constituencies.  Probably.

Anyway, for good measure, in order to eliminate the possibility of profits being made by AIM, I tried to do an online search through ACRA for the audited accounts of AIM.  This is what I found:

 

The Annual Returns (AR) filed by the company is without accounts.  I didn't bother clicking through to purchase the AR.  I backtracked to look at the business profile of the company that is available here http://www.tremeritus.com/wp-content/uploads/2012/12/Action-Information-Management.pdf?9804ec
AIM is an Exempt Private Company.  There is thus no legal requirement for Audited accounts to be filed at the registry. 

The PAP has to come forward and give a proper detailed explanation on this whole transaction before the online speculations grow completely out of hand.  As it stands there are questions being thrown around as to the propriety of the tender process and the profits possibly being made by AIM.  With social media setting the agenda on this issue and MSM playing catch-up and the Town Councils and AIM being patchy with information, there is an urgent need for thorough explanation. 

What a way to end the year!

Terminating Aljunied Town Council's Contract: What's their AIM?

Palmergate is yesterday’s news.  Let’s move on.  He’s human.  He erred.  He has resigned.  This is now a personal issue for him to deal with his family.  What remains to be sorted out is the vacant Parliamentary seat.  Even though the current judicial interpretation of the Constitution would result in a full discretion for the PM to decide whether or not to hold a by-election in Punggol East, it would be politically prudent for the PM to call for one in order to avoid the further hardening of moderate voters against the PAP. 

Amidst all this, and amidst online discussion about the undesirably close (though not necessarily improprietous nor unlawful) relationship between PA and PAP (with Michael Palmer and Laura Ong providing the useful metaphor of being in bed with each other), the Workers’ Party’s  Sylvia Lim has revealed that a certain Action Information Management Pte Ltd manages the computing and financial system for PAP run Town Councils.  This information has surfaced as a result of Sylvia Lim’s public clarification as to the reason for delays in her Town Council’s audited statements.  The following is from her statement:

"After the GE in May 2011, the Town Council was served with a notice that the Town Council’s Computer and Financial Systems will be terminated with effect from 1 August 2011 due to material changes to the membership of the Town Council. This Computer and Financial Systems had been developed jointly by the 14 PAP Town Councils over a period of more than 15 months but was in January 2011 sold to and leased back from M/s Action Information Management Pte Ltd, a company which was dormant. This effectively meant that the AHTC had to develop its own equivalent systems, in particular the Financial System, within a 2 months’ timeframe."

Sylvia Lim has brought this information up in the context of explaining delays to the audit of the Town Council.  She does ask the relevant question as to why the Computer and Financial System was sold to Action Information Management (AIM).   Although AIM director, S Chandra Das, has attempted to clarify that they were willing to grant a further extension if requested, he has not stated anything about how or why AIM was awarded this contract in the first place. 

At this point in time we do not know what is the price for which the 14 PAP run Town Councils sold their Computer and Financial Systems to AIM. 

Let’s assume that the System was valued at market value through an independent valuation process and sold to AIM.  AIM then leased it back to the Town Councils.  The Town Councils will now be contractually bound to pay a price to AIM under the terms of this leasing agreement.  What is the contracted price?  Is there a profit derived by AIM through the purchase by them of the System and the subsequent lease back to the Town Councils?  If so, what is the amount of profit so derived?

Whilst it is understandable that a Town Council might commission a third party to develop a system, it is indeed strange that a system developed by a Town Council should be sold to a third party only to be leased back to the Town Council.  But, perhaps the third party might have had particular skill and expertise that it could bring to bear in relation to the system.  If that were the case, what was the specific skill and expertise that AIM brought with it in order to justify this contractual arrangement.  Sylvia Lim claims that AIM was a dormant company.  (The company’s registration number is 199103607Z.  That would mean that it was incorporated in 1991.  Perhaps it was operational for some time.)

What was the process by which AIM was awarded this sale and lease back contract?  Was it done through a tender process?  Considering that the directors of AIM are ex PAP MPs, did the Town Councils invest in extra effort in going through a transparent process in awarding the contract (so as to avoid inviting unwarranted allegations of impropriety)?

On the assumption that AIM derives no profit from the contract, why would a private company want to enter into a contractual arrangement where it is not going to benefit at all?  That leads us to come up with a grand conspiracy theory (which was probably what Sylvia Lim was hinting at).  Anticipating that PAP might lose control of more constituencies at GE 2011 and therefore some Town Councils, the Computer and Financial System might have been sold off to a third party with a lease back arrangement.  The contract provided for termination by giving a month’s notice.   In the event that a Town Council management falls into the hands of an opposition party, AIM’s services could be withdrawn by giving 1 month’s notice.  There is nothing illegal about it.  Just some old-style politics.  The kind of politics that we hope to eventually see the back of.  

PAP leaders have recently lamented the increasing polarization of Singaporeans and expressed their wish that we don’t embrace divisive party politics.  The problem is that it is the PAP’s traditional approach of demonizing, maligning and disadvantaging opposition parties that has caused a certain degree of anger and frustration amongst many voters and led to the kind of online vitriol that we witness on and off. 

Expecting civility in politics would mean that one has to be civil in the first place.  It is not too late.  We can start afresh.  We can start by looking at all the aspects of our electoral and political system that creates a less than level playing field and seek to change that.  Right now, that looks like a mammoth task.  It may involve a systemic overhaul.  Many citizens are arguably ready for it.  But, is there the political will or desire for it?

 

 

PA or PAP?

You can accuse us of political apathy. But, you can never accuse Singaporeans of stupidity.

I am amazed at the Peoples' Association's response to the Workers' Party assertions about WP MPs being deprived of an opportunity to be invited guests at the 7 month festivites. It has turned out that Chen Show Mao had been invited as a guest at a couple of 'Hungry Ghost' festival dinners. But, the organisers had to withdraw the invitation because the Peoples' Association informed that they would not grant future permission if the WP MP was invited.

This first surfaced via a facebook update by Mr Chen Show Mao and subsequently a press release by Ms Sylvia Lim indicating that HDB had granted leases at several places in the Alunied GRC to the Peoples' Association and taken away management of those parts of the estate from the Town Council. This had been done after the General Elections this year. This is in iself shocking as it suggests partisan politics at play in our public institutions. There is an important value that any self-respecting democracy must uphold: the independance and neutrality of the civil service.

But, I am totally stunned at the audacity of the PA's response.

"The PA and its GROs are non-partisan and do not allow any political party or MP to hold activities on PA premises or other facilities managed by the PA."

"This applies to all political parties and MPs, including the PAP"

There are so many things I can quibble about:
1. The Workers Party did not attempt to hold any activities on PA premises
2. The WP MPs did not attempt to hold any activities on the PA premises
3. Mr Chen was invited by civilian, non-partisan organisers to attend the function
4. Community Clubs are PA premises and PAP MPs have been invited as guests at functions held at CCs.

A simple google search reveals a wealth of information on PAP MPs attending activities or officiating as guests at events taking place on PA premises or facilities managed by the PA.
A sampling:
Eunos Heights Residents’ Committee organised a Chinese New Year Dinner on 20 February 2011 at Eunos Community Club Multipurpose Hall. MP for Aljunied GRC Mr Zainul Abidin was the guest of honour. http://eunoszone3.wordpress.com/2011/03/04/celebrating-the-year-of-the-rabbit/

Passion Nite: on 31st December 2009 at Cheng San CC
Guest of Honour: Dr Balaji Sadasivan, MP for Ang Mo Kio GRC http://www.pa.gov.sg/events/details/passion-nite-159.html

There are too many examples and they are easily available. When the PA decided to assert that they 'do not allow any political party or MP to hold activities on PA premises or other facilities managed by the PA', did they honestly believe that they can get away with that assertion?

I can imagine their response. Those events at PA premises where MPs were present involved MPs that were invited to attend and they were not activities organised by the PAP or the PAP MPs. Well, by the same token the hungry ghost event was not organised by the WP or its MPs. Mr Chen was invited to attend.

Please don't insult our intelligence.

And, by the way who is on the Board of Management in the Peoples' Association?
Lee Hsien Loong, Lim Swee Say, MG Chan Chun Sin, Grace Fu, Masagos Zulkifli, Janil Puthucheary, amongst others. (Interestingly, Mr Yam Ah Mee of GE2011 fame is also there)

Non-Partisan? My ***.