When does a town council have to declare transactions involving a related party, and how should it do so?
Various Workers' Party (WP) MPs asked the authorities to make this clear during the debate on the findings in the Auditor-General's audit report of their town council.
The Aljunied-Hougang-Punggol East Town Council (AHPETC) had been criticised for not making adequate disclosures about dealings with its managing agent, FM Solutions and Services (FMSS), and another contractor FM Solutions and Integrated Services (FMIS).
The shareholders in both are senior town council officers.
Yesterday, AHPETC and WP chairman Sylvia Lim said most town council secretaries and general managers are also senior staff of the managing agents: "Should all town councils then make such related party disclosures?"
But Law Minister K. Shanmugam said AHPETC's situation is unusual, as no other town council in the last 25 years has had key employees who were also the owners of the managing agent.
"Their ownership interest and control of the managing agent is what distinguishes AHPETC from all other town councils. That makes any transaction between the town council and FMSS and FMSI a related party transaction that has to be disclosed," he said.
This article was first published on February 13, 2015.
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