Workers' Party (WP) chairman Sylvia Lim said the town council it runs never hid the fact that its senior officers were also owners of its managing agent, FM Solutions and Services (FMSS).
She also said the Aljunied-Hougang-Punggol East Town Council (AHPETC) has put in place measures to ensure transactions involving FMSS are subject to greater scrutiny.
Ms Lim, who is AHPETC's chairman, made these points in Parliament yesterday as she led her party's clarifications of the lapses found by the Auditor-General's Office (AGO) in a year-long audit of its accounts.
Opening her 35-minute speech, she said: "We, the MPs of Aljunied, Hougang and Punggol East, are concerned about these matters."
One major lapse was the town council's failure to manage conflicts of interest in $25.9 million worth of transactions with FMSS and FM Solutions and Integrated Services (FMSI), which provides rescue and maintenance services.
The town council's senior officers are secretary Danny Loh Chong Meng, general manager How Weng Fan, and deputy general managers Yeo Soon Fei and Johnson Lieow Chong Sern. They are also owners of FMSS, and Mr Loh is the sole owner of FMSI. AHPETC, Ms Lim said, had always acknowledged these links.
She also said that for a small company like FMSS, it is unavoidable for its directors to hold key positions in the town council they manage.
But since the release of the AGO findings this week, she said media reports had created "misimpressions... that the town council secretary and its general manager... are freely being given contracts without tender and paying themselves handsomely without accountability".
This was not the case, she said. The managing agent did not have powers to award tenders or evaluate those it participated in.
Instead, a committee of the party's MPs and appointed councillors made the decisions, she said.
Ms Lim also addressed the AGO's criticism of the town council not having checks on payments made to FMSS and FMSI.
The AGO had highlighted 84 invoices, worth $6.6 million, that Mr Loh and Ms How had issued as senior officers of FMSS and FMSI.