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?

 

 

The Potong Pasir Town Council Saga & the broader issue of transparency

The following article appeared in Channelnewsasia today:

http://www.channelnewsasia.com/stories/singaporelocalnews/view/1132707/1/.html

It appears that the SPP has alleged that the newly elected PAP MP for Potong Pasir had promised to retain the services of all 16 employees of the Potong Pasir Town Council.

It appears that only 3 employees were retained at Potong Pasir TC and the remaining staff have been served with termination notices with an offer of re-employment with EM Services.

EM Services is the newly appointed managing agent of the Potong Pasir Town Council. I find the following aspect of the news report disturbing:

When contacted on Wednesday, Mr Sitoh refuted SPP's claims.

"At that time, I didn't know the inside workings of the town council and how many staff there were, so my exact words to her, "Since you asked, I'll try my best to see what I can do"," he said.

"And I think I've kept to my word: I negotiated with EM Services and I must give credit to EM Services. They said, "Don't worry, we'll take the staff"."

As for his decision not to keep most of the town council employees at Potong Pasir, Mr Sitoh said he could not keep everybody, as he has to abide by EM Services' regulations.

"It has its own way of doing things that is developed over the years, which is why I adopt this system. My paramount interest is the Potong Pasir residents, so EM Services has to bring in its own people. I can't compromise on standards of services I deliver to residents."

He added that EM Services will probably have to train some of the Potong Pasir town council employees under its own training programme.

Town council employees whom MediaCorp spoke to expressed concern about the situation, especially after they were told that when re-employed, they would be put on a six-month probation under EM Service's terms and conditions. When asked about the probation period, Mr Sitoh said this was standard human resource policy for all EM Services staff. He added: "If they're good performers, what's the worry?"

Firstly, it appears that the appointment of EM Services was one which involved a personal choice and exercise of discretion by Mr Sitoh. The process of appointment of Managing Agents is totally unsatisfactory. In the end, these Managing Agents are going to be paid under their contract by the Town Council. The Town Council funds are coming from the residents ultimately. Where is the accountability if one person exercising his personal discretion could negotiate with and appoint EM Services as the Managing Agent. I have in an earlier blog post addressed the issue of PAP members being part of EM Services including, of course, the Chief Operating Officer of EM Services who is an ex-MP. With such close party based links, it would have been more prudent for Mr Sitoh to have taken over the Town Council and then to set out, through an open and transparent manner, to find an appropriate Managing Agent. The fact is that PAP run Town Councils have become comfortable with the delegation of estate management functions to these companies such as EM Services, Esmaco & CPG Facilities. This has led to the newly elected MP for Potong Pasir to speedily appoint EM Services without first considering if the process itself should be transparent.

In an article on Today that appeared on 30th May 2011, Mdm Halimah of Jurong Town Council noted as follows:
"We have a transparent and rigorous system in place where all tenders, including the appointment of the managing agent, are evaluated by the Tenders and Contracts Committee comprising Councillors. This committee's recommendations are then reviewed by the full Council,"

If this is in fact the practice in Jurong Town Council, it Is to be welcomed. The appointment of the managing agent itself is one that is evaluated by the Tenders and Contracts Committee.

In Potong Pasir it remains a question mark as to whether any rigorous or transparent process was followed.


Secondly, this issue of what Mr Sitoh promised should not descend into a war of words between the SPP and Mr Sitoh over who said what. But, at this point that is the way it is coming out. SPP alleges one thing and Mr Sitoh disputes it. Let’s assume for a moment that Mr Sitoh is telling the truth that he said he would try his best. His final remark in that Channelnewsasia article is not at all indicative of someone who tried his best or someone who cares.

In relation to the 6-month probation period for the terminated Town Council employees, Mr Sitoh stated “if they are good performers, what’s the worry.” This is precisely the EQ problem that we have been encountering with many PAP MPs lately. One would have thought that the chorus of discontent that grew louder and louder during the elections would have helped to soften these MPs. It doesn’t appear to have affected some of them.

You win the election. You take over the Town Council. You unceremoniously terminate the employment of Town Council employees without so much as an offer of compensation. The best you could negotiate for these employees was an offer of employment at EM Services and your response to the 6 month probation period can at best be described as scornful. I expect more than that from you Mr Sitoh.

Thirdly, what is there to stop EM Services from claiming after the end of the probation period that the staff cannot be confirmed because they were below par. With the kind of political links that EM Services has, doubts may arise as to the true reason for the termination of the employees if they get dropped after six months. Many doubts have already been cast at the termination of services encountered by an employee of Esmaco serving at Jurong Town Council. The General Manager of the town council, Mr Ho had allegedly terminated the services of one of staff that happened to take part in campaign activities in support of the National Solidarity Party. Mr Ho, as it turned out, is, apart from being a director UGL Premas (the holding company that owns Esmaco), the Branch secretary of the PAP’s Bukit Batok Branch.

The line between Town Council, Managing Agent and the political party tend to be blurred in such situations. I can only hope that things would be more transparent.

In the meantime, the SPP’s letter to Mr Sitoh is available here: http://www.spp.org.sg/wp-content/uploads/2011/06/request-for-mr-sitoh-to-retain-employment-of-potong-pasir-town-council-staff.pdf

How does a Town Council decide on awarding a contract to a Managing Agent?

Just as I thought that the muddle over conflict of interest was beginning to clear up a little because of the clarification from MND and from Madam Halimah, I have come across news (rather belatedly noticed by me) that Potong Pasir Town Council has appointed EM Services as the Managing Agent.

On 21st May 2011, it was still being reported that the newly elected PAP MP Mr Sitoh Yi Pin was hoping to take over the management of the Town Council by the end of the month. It has been reported on 27th May that the Town Council has appointed EM Services.

The following is from an article appearing on Channelnewsasia on 27 May 2011:
Potong Pasir Town Council staff to be offered jobs by EM Services
SINGAPORE: The Potong Pasir Town Council has engaged EM Services to be its managing agent.

Town council Chairman and MP for the area, Sitoh Yih Pin, said there are currently 16 staff in the town council under its previous Chairman, Mr Chiam See Tong.

And EM Services has accepted Mr Sitoh’s request to re—hire all of them from the town council.

Mr Sitoh said he wants to take over the operations smoothly with minimal inconvenience to the staff.

EM Services has distributed human resource forms for the staff to complete and they would likely be re—hired in other town councils.

Mr Sitoh added that he is also in discussions with EM Services to place three of the staff in Potong Pasir as they live in the division.

The choice of the next general manager of the Potong Pasir Town Council would also be left to EM Services to decide.


It is clear that EM Services has been engaged by the Town Council to be its managing agent. Did they go through a tender process? On the 21st of May, Mr Sitoh had not taken control of the Town Council yet. On the 27th of May, he is already able to confirm that EM Services has been appointed as the Managing Agent.

So, is it a case of the Town Council Chairman having full discretion to invite any company to be the Managing Agent of a Town Council? Is this the manner in which other Managing Agents are appointed in other Town Councils? EM Services currently manages 8 Town Councils. How was the company appointed? Was there a tender process? In the interest of transparency, I hope that there was a tender process through which EM Servies was appointed as the Managing Agent.

Potong Pasir residents should write to their Town Council to find out the process by which EM Services was chosen to be the Managing Agent of the Town Council. Don't forget that EM Services currently manges Sembawang Town Council (where questions have arisen over how there was easy access to the water tank where a corpse had been disposed).
Of course, it also does not help that Mr Ang Mong Seng is the chief operating officer of EM Services. As I always insist, conflict of interest is not merely an issue of whether there was an actual conflict but also an issue of whether the appearance of conflict could exist. This has to be avoided to bring governance to a higher standard.

More transparency needed in our Town Councils

Over the last week, this has become something of a pet issue for me.

Is there or is there not any conflict of interest in the management of our Town Councils?

The following article has appeared in Todayonline:

MPs: No conflict of interest ...

by Cheow Xin Yi 04:46 AM May 30, 2011SINGAPORE -
They are general managers accountable for the day-to-day administrative functions of town councils. Some of them are also employees of managing agents who win contracts from the town councils to service the estate.

This arrangement - known to occur in at least four town councils in Singapore - has raised the issue of conflict of interest in town council management.

At Aljunied and Jurong town councils, the respective GMs, Mr Jeffrey Chua and Mr Ho Thian Poh, in fact also hold the position of managing directors at CPG Facilities Management and UGL Premas.

CPG is currently the managing agent of Aljunied Town Council, although it is not clear if the agreement will continue following the Workers' Party taking over of Aljunied and the subsequent merger to form Aljunied-Hougang Town Council .

UGL Premas, meanwhile, is the parent company of Emasco Township management, the managing agent of Jurong Town Council.

To National University of Singapore business school associate professor Mak Yuen Teen, the first issue to establish is how the GMs of town councils are appointed. "Are they appointed after the facilities management company has been selected? If so, there would not be a conflict in terms of someone being put in a position to recommend or award a contract to his own firm," he said.

"There will, of course, still be the issue of who evaluates the performance of the facilities management company - it certainly should not be the GM of the town council if they are related parties," he added.

When contacted, former chairman of Jurong Town Council Halimah Yacob confirmed that was the case: Mr Ho was only appointed GM after the town council contracted Emasco as the managing agent. His salary is also paid by Emasco.

"The Council pays the managing agent the fee agreed upon under the contract which the managing agent uses to cover its costs of providing service to the council including staff salaries," she said.

Mr Ho is also not authorised to approve any tender, said Mdm Halimah, who is a Member of Parliament in Jurong Group Representation Constituency.

"We have a transparent and rigorous system in place where all tenders, including the appointment of the managing agent, are evaluated by the Tenders and Contracts Committee comprising Councillors. This committee's recommendations are then reviewed by the full Council," she said.

At Holland-Bukit Panjang Town Council, its secretary Albert Teng is also an employee of its managing agent, EM Services. Bukit Panjang MP Teo Ho Pin, who has been the coordinating chairman among PAP town councils, reiterated: "We must comply with the Ministry of National Development (MND) guidelines if there is a conflict of interest among our councillors or staff when tendering for contracts."

Still, given the close working proximity between the GM and the councillors, isn't there the chance of the committee favouring contractors of their own working partners?

An ex-town councillor at a town council, who declined to be named, said the possibility is mitigated by the diverse groups of people making decisions on the tenders.

At his town council for instance, where the general manager is in fact an employee of the managing agent, there would be at least 10 councillors in subcommittees making recommendations for particular contracts for a total panel of more than 40 councillors to approve.

Weighing in on the issue, the MND said there are safeguards within town council financial rules to prevent a conflict of interest, even as the ministry stressed that it monitors the award of tenders to ensure they comply with the financial provisions.

If a managing agent intends to participate in a tender for works or services called by the town council, the managing agent is required to declare its interest to the town council and is prohibited from participating in the evaluation of the tenders received, said a MND spokesperson, adding that the independent tender committee must ensure that the" tender specifications do not favour any particular tenderer."


Firstly, I am glad that the Ministry of National Development has clarified that there are safeguards within town council financial rules and it is indeed to be lauded that the Ministry monitors the award of tenders to ensure that they comply with the financial provisions.

To be fair, as I have maintained from the very beginning, the mere fact that the General Manager of a Town Council is also the director of the company that provides services as a managing agent does not amount to conflict of interest.

Based on information that has been forthcoming thus far, there is no obvious case of a conflict.

Secondly, the above article indicates that there are 4 town councils with the potential conflict situation. But, the article has mentioned 3 town councils: Jurong, Aljunied & Holland-Bukit Timah. I had speculated about Holland-Bukit Timah in an earlier blog post on the basis of a listing on the website of the Association of Facilities and Property Managers that names Teng Ann Boon, Albert as an employee of EM Services. Today’s Todayonline article confirms this fact. I wonder which the 4th Town Council is.

Thirdly, this issue of potential conflict of interest is one that should be examined at the level of individual Town Councils rather than at a national level. The Ministry of National development should at best be expected to devise a policy guideline for Town Councils to follow and monitor whether or not structural devices are in place in Town Councils to ensure that conflicts do not arise. Town Councils collect conservancy charges from residents and these TCs should be answerable to residents if there happens to be any conflict of interest.

Fourthly, I wonder about the situation involving Mr Ang Mong Seng (the former MP for Bukit Gombak & former chairman of Hong Kah Town Council). He is the Chief Operating Officer of EM Services. The explanation given by Mdm Halimah of Jurong Town Council is, to me, satisfactory in assuring that there is no conflict of interest in relation to Mr Ho Thian Poh. Her explanation is that Mr Ho was appointed as the General Manager after Esmaco was awarded the contract to manage the estate and that Mr Ho was under the payroll of Esmaco. Provided that the award of other projects and contracts and the monitoring of Esmaco’s services is carried out by other persons/committees, prima facie there is no reason to assert that there could be a conflict of interest.

In relation to Mr Ang Mong Seng, the situation is not very clear. When was he appointed as the Chief Operating Officer of EM Services? He was the Chairman of Hong Kah Town Council at a time when EM Services was bidding for projects. The Town Council has a tender committee and it is clear that Mr Ang was not a member of that committee. But, what measures did the Town Council have in place to ensure that conflicts do not arise? Would Committee members feel obliged (through no coercion or influence) to award a contract to EM Services? The reason why we try to come up with measures against conflict of interest is that we want to battle against human weaknesses.

Shouldn’t there simply be an absolute no-conflict rule for those who serve as town councillors or Chairmen/Vice-Chairmen of TCs? This would mean that if they are in an executive position in a company that bids for a Town Council project, then the company would be automatically disqualified from making such a bid. This would be the better way to go in the future. So, for instance, EM Services should not have been permitted to bid for projects in Hong Kah.

Fifthly, I agree with the MND spokesperson that the tender committee should ensure that the tender specifications do not favour any particular tenderer. This is one area worth exploring and monitoring. Are the specifications drafted in a manner that might favour any single company? It is one thing to say that there is a tender committee but it is a wholly different issue of the tender process is hijacked by rigging. Again, as observed earlier, residents could play an active role in keeping the committees and town councillors on their toes.

Another thing I want to add…. Keeping them honest and keeping them transparent should apply equally to PAP as well as WP wards. WP in Aljunied should heed this and build a transparent system there that residents can readily scrutinise.

All Town Councils should implement an internet-based disclosure regime for the tendering of all projects. (Incidentally, I got some of the information relating to Hong Kah Town Council because they have uploaded their tender results on their website. This is useful and a step in the right direction.)

‘Conflict of interest’ raises important ethical and moral issues in governance and we shouldn’t treat it as a frivolous matter.

The Town Council formerly known as Hong Kah

The more one digs the more finds…..

Mr Ang Mong Seng, the former MP for Hong Kah GRC (Bukit Gombak) is named at the following website of United Fibre Systems Ltd as one of its Independent Directors. That is perfectly fine.
http://www.ufs.com.sg/corp_team.html

The write-up on that website says this about Mr Ang.

"Mr. Ang is a Member of Parliament for Hong Kah GRC (Bukit Gombak). He has almost 30 years of experience in estate management. He is the Chief Operating Officer of EM Services Pte Ltd, Chairman of Hong Kah Town Council and Vice Chairman of South- West Community Development Council."

He didn’t seek re-election this time around. So, the site is obviously not updated yet. But, note that he is referred to as the Chief Operating Officer of EM Services Pte Ltd. To be fair, the estate management of Hong Kah Town Council is provided by Esmaco Pte Ltd and not by EM Services Ltd. EM Services provides its services for the following Town Councils:

East Coast Town Council
Holland-Bukit Panjang Town Council
Jalan Besar Town Council
Pasir Ris-Punggol Town Council
Sembawang Town Council
Tampines Town Council
Tanjong Pagar Town Council

So, there’s no direct conflict of interest there. He is not involved in the management of those town councils. Ideally, being the MP for Bukit Gombak and therefore being involved in the Town Council management of Hong Kah Town Council, he should have avoided retaining the position of COO in EM Services. The problem is that EM Services has tendered for estate management in many Town Councils and has also tendered for projects in Hong Kah.

In fact, on 7th August 2009, a term contract for the servicing and maintenance of Senior Citizens’ fitness equipment was awarded to EM Services for the period of 1 Dec 2009 to 30th Nov 2011 by the Hong Kah Town Council. Again, to be fair, Mr Ang was not sitting in the Tenders Committee of the Town Council. Although, there may not in fact have been any interference and the entire process may have been above board, it is sometimes not enough for office bearers to merely insist that everything was clean and above board. It is necessary for them to be seen to be above board as well. The best way to do it is to remove yourself from those companies that may potentially bid for such contracts or to cause those companies not to tender for the contracts in the first place.

Jurong Town Council - Esmaco Services

Based on reading an article in Temasek Review on 15th May 2011, I was under the impression that Esmaco is a company based in Australia and probably originating from there.
http://www.temasekreview.com/2011/05/15/jurong-town-council-in-the-spotlight/

I managed to find out the following about Esmaco. Esmaco was originally owned by HDB Corporation Pte Ltd which then sold off its interest in Esmaco to Premas International Ltd. Premas International Ltd was a subsidiary of CapitaLand Ltd. CapitaLand had in 2005 sold Premas to United Group Limited (an Australian company).

So, today... UGL Premas is the holding company and Esmaco is its subsidiary. It is likely that many of the staff and management in UGL Premas and Esmaco would have been the same chaps that were around prior to the divestment by CapitaLand. Mr Ho Thian Poh may well have been holding on to his position in Premas even before the acquisition by the Australian company and quite possibly he may have been the General MAnager of the Jurong Town Council from before the 2005 acquisition of Premas by UGL.

I'm not making any insinuations here or alleging any wrongdoing. Just trying to give a more accurate picture of the status of Esmaco.

http://www.capitaland.com/en/files/CLPress29042005.pdf


There is still the unanswered question as to how the Managing Director of Premas could also be the General Manager of Jurong Town Council and avoid any possible conflict of interest.

Town Councils - conflict of interest?

A couple of interesting revelations have arisen after the general elections in Singapore this year. These are worth pursuing in the interest of transparency. In the end, I suspect that there may not be anything to be concerned about. But, prima facie, there appears to be a potential for conflict of interest in the management of some town councils.

I am not prepared to jump the gun and declare that there has been an obvious case of conflict. There are so many details that are missing that it is impossible to state with any degree of certainty whether conflict might exist.

Soon after the elections, information surfaced that the General Manager of Aljunied GRC was also the Managing Director of CPG Facilites Management Pte Ltd. This is the company that was awarded the town management contract at Aljunied Town Council. Now that Aljunied has fallen to the opposition Workers Party, there will be a handover of the Town Council management pretty soon.

In an article in the Straits Times on 12th May 2011 regarding the handover of the Aljunied Town Council, the following was stated:

“Aljunied Town Council is now managed by CPG Facilities Management, with whom the town council signed a three-year contract last year. CPG managing director Jeffrey Chua is the town council’s general manager. As the town council managing agent, CPG engages the services of other companies for services such as cleaning, maintenance and lift rescue.”

On the surface, the idea that the same person is the General Manager of the Town Council as well as the Managing Director of CPG appears to be a conflict of interest.

Not too long after this, there emerged news that an employee of Esmaco Pte Ltd working at Jurong Town Council had been sacked. There were allegations about her being sacked because of her election campaign activities when she was supporting the National Solidarity Party. This was denied by her employers. In the midst of this, it has turned out that Mr Ho Thian Poh is both the General Manager of the Jurong Town Council and the Managing Director of UGL Premas Ltd. Esmaco Pte Ltd, which is the managing agent of Jurong Town Council, is in fact a subsidiary UGL Premas Ltd.

So, we now have a situation where the GM position in two Town Councils has been occupied by individuals in a directorial capacity in the companies that have been awarded the contract to be managing agents.

I did a quick check on the names of all the General Managers or Secretaries in the various Town Councils. They are as follows. (I have also included the companies that are carrying out the estate management in these estates):

Aljunied Town Council Jeffrey CHUA Leong Chuan
CPG Facilities Management Pte Ltd.

Ang Mo Kio - Yio Chu Kang Town Council WAN Chong Hock
CPG Facilities Management Pte Ltd.

Bishan-Toa Payoh Town Council LING Ming Chuan

East Coast Town Council S Sasidharan NAIR
EM Services Pte Ltd

Holland-Bukit Panjang Town Council TENG Ann Boon, Albert
EM Services Pte Ltd

Hong Kah Town Council Ms Christina GOH
Esmaco Pte Ltd

Hougang Town Council Ms HOW Weng Fan

Jalan Besar Town Council LIM Kee Ee
EM Services Pte Ltd

Jurong Town Council HO Thian Poh
Esmaco Pte Ltd

Marine Parade Town Council Ms PNG Chiew Hoon
Esmaco Pte Ltd

Pasir Ris-Punggol Town Council Ms KWOK Wei Kin
EM Services Pte Ltd

Potong Pasir Town Council

Sembawang Town Council SOON Min Sin
EM Services Pte Ltd

Tampines Town Council LEONG Shee Wing
EM Services Pte Ltd

Tanjong Pagar Town Council Simon KOH Tee Chuan
EM Services Pte Ltd

West Coast Town Council TAY Eng Hwa
Esmaco Pte Ltd & EM Services Pte Ltd



http://apfm.org.sg/apfm/sub/members.html
The Association of Property and Facilities Managers lists Teng Ann Boon, Albert as being from EM Services Ltd. He is the General Manager at the Holland - Bukit Panjang Town Council.

A google search on Christina Goh throws up a ‘Linkedin’ profile with a past employment at UGL Premas. There is no way of verifying whether this is the same Christina Goh at Hong Kah Town Council.

The bottom line is that a simple search on the internet does not throw up any web of connections. More digging is needed to get to the bottom of this… if at all there is anything to be uncovered.

Assuming a person is a General Manager of a town council, is there necessarily a conflict of interest if he is also a director of the company that is appointed as a managing agent of the town council? Much will depend on the nature of the GM’s role. If the arrangement is that the town council awards the contract to a company like Esmaco and as part of that contract Esmaco appoints it employee or director to be the GM of the town council, then this arrangement would not on its own amount to a conflict. Presumably, the town council could still call the shots in terms of the contractual obligations of Esmaco and could still hold Esmaco accountable for any breach of service standards. The GM would effectively be an employee of Esmaco and he would be in charge of fulfilling Esmaco’s contractual obligations to the town council.

There would be an unpardonable conflict of interest if a person is at first appointed as a GM of the town council and then he is in charge of procuring the estate management contract and he proceeds to procure the services of Esmaco where he is a director or he is a director of Esmaco’s parent company. I doubt that this was the nature of the arrangement between the town council and Esmaco. It is more likely that Esmaco was appointed to manage the estate and the GM was appointed as Esmaco’s representative under the contract. He is probably under the payroll of Esmaco as well.

There are other issues that can potentially arise out of the way these town councils are managed. If the GM was involved in the process of awarding specific contracts for instance for tiling works or building covered walkways, how is the process managed in the town council. Does the town council leave Esmaco and its representative to decide on the contracts to be awarded and accordingly the pricing involved or does the town council exercise direct control over the process or at least some oversight. Given that estate management in PAP wards is being contracted out to private companies, the important question to be asked is the level of oversight that is being exercised over the way in which these companies operate.

If we look at the CPG Facilities Management website, we can see that as part of the township management services they perform, they carry out fund management and investment as well. http://www.cpgfm.com.sg/township.shtml

It is not clear whether all private companies carrying out estate management services in fact engage in investment on behalf of the town councils. If they do, this is another area to be concerned about in terms of the extent of oversight and control exercised by the town council itself.

But of course, if contrary to my conservative opinion, it turns out that there is something more to the position held by these GMs, then let the proverbial shit hit the fan.