Cross-Examination of Kenneth Foo - Continuation


Day 16 – Cross-Examination of Kenneth Foo
(1)        Kenneth Foo admitted that:
(a)        Improper arrangements were entered into without proper disclosures to the Town Council.
(b)        Payments were made to FMSS without knowledge of the Town Councillors, including himself.
(c)        He was not invited to meetings of the tender evaluation committee despite being a member.
(d)        He agrees that looking back, he would have done things differently.
(e)        TC could have considered direct management for AHTC, but that was not done.
            [Background: Kenneth Foo agreed Hougang Town Council was directly managed with How leading it.  Direct management would have helped saved AHTC money as it would not have to pay FMSS an additional profit element.]
(f)         It was possible to conduct a tender for the 1st MA contract and 1st EMSU contract, and this should have been done for Aljunied residents’ benefit.
(g)        Giving a contract to a good friend would affect the market’s confidence.

(a)        Improper Payment to FMSS entered into without proper disclosures to Town Council
Q:         … My question was: the transitional arrangement would have been improper because it had not been tabled before the town council or approved by it, correct?
A:         Yes.
Q:         You agree with me that the chairman. the vice-chairman and the elected members had a duty to disclose that transitional arrangement before it was entered into, correct?
A:         Yes.
[Background: The “transitional arrangement” refers to the period of time when FMSS continued as MA and EMSU provider, after the 1st MA and EMSU contracts had expired, but before the 2nd MA and EMSU contracts were approved.]
(b)        Payment to FMSS made without knowledge of all Town Councillors (including himself)
Q:         Did you know at the 4 August meeting that payments had already been made to FMSS before 4 August?
A:         Not in the report.
Q:         Yes. But did you know, whether from the report or otherwise?  
A:         No, I don’t recall.
Q:         Thank you. Do you agree with me that if payments had already been made, that is something that should have been disclosed to the meeting on 4 August?
A:         It should have been reported.
Q:         In fact, it was the duty of the chairman, vice-chairman and the elected members to disclose it, correct?
A:         Yes.
Q:         And that was not done, correct?
A:         Yes.
(c)        Not invited to tender evaluation committee even though he was a member
Q:         … Earlier you said you were not a member of the tender committee, so can I just get some clarification from you?
Q:         You were a member?
A:         On 14 June [2012], I was.
Q:         Right. So did you participate in the meetings of 21 June and 21 July?
A:         No.
Q:         So are you saying that because of a mistake, they didn’t invite you for the two meetings? Is that right?
A:         I believe so.
(d)        Would have done things differently
Q:         Right. But now come back to my question. We’re now here today, on 29 October, looking back. Now, when you look back, do you agree with me that if you could do it all again, you would have done it differently?
A:         I would say that I would have done it to make it better.
           
Q:         Yes, in other words, done it differently, right?
A:         Yes.
(e)        Direct management could have been considered for AHTC, but this was not done
Q:         Thank you. So in Hougang, you had direct management with Ms How at the lead, correct?
A:         Yes.
Q:         And therefore one option that AHTC could adopt was direct management with Ms How again leading it, correct?
A:         Could be.
Q:         Yes. Did you suggest that?
A:         No. 
(f)         Possible to conduct, and should have conducted, tender for 1st MA and EMSU contracts for residents’ benefit
Q:         And you would have believed, as of 9 June, that there would have been enough time to call a tender for the provision of EMSU services for the period 1 Oct 2011 and further?
A:         Yes.
Q:         So having regard to it, it would have been in the interests of the residents of AHTC, or Aljunied, to do a tender to get the best value for money, correct?
A:         Yes.
Q:         As far as the MA contract was concerned, we know that CPG … said that they wanted to be released on 30 May, correct?
A:         Yes.
Q:         And they wanted to be released by 1 August, right?
A:         Yes.
Q:         Just looking at the time, there was enough time to do a tender, correct?
A:         Yes. In our defence, we said it is two months. 
Q:         … And even if FMSS had been set up to provide managing agent services, as a consumer, it is always better to have FMSS bid with others, correct?
A:         Yes.
Q:         Because, that way, you have more leverage or negotiating power, correct?
A:         Yes.
(g)        Giving a contract to a good friend would affect the market’s confidence.
Q:         Mr Foo, sorry, maybe I didn’t give [a] full example. The contract is given to a best friend who had just incorporated a company a few days ago. Okay?
A:         Okay.
Q:         The market can find it out, right?
A:         Yes.
Q:         And that will affect the market’s confidence in the procurement practices of this company, correct?
A:         Yes.


Cross-Examination of Chua Zhi Hon
(1)        Chua Zhi Hon admitted that:
(a)        FMSS was in complete control in June/July 2012 and could have obtained whatever rates it was asking for.
(b)        The MPs should not have ruled out a tender.
(c)        it would have been proper and honest for the MPs to consider asking CPG to stay on longer.
            (a)        FMSS in complete control in June/July 2012
Q:        
Given what you know today, you would agree with me that in June and July 2012, FMSS was in complete control of the negotiations?
A:         Based on the information that was told to date, I can agree with that, but … I don’t think they have full control in the sense that we still maybe could go to direct management, I guess.
Q:         If FMSS had said on 21 July, “We are not interested in negotiating, take it or leave it” and if AHTC had said “Leave it, go away”, the next day someone is stuck in the lift, there is no one engaged to rescue that person, correct?
A:         Yes.
Q:         … So I come back to my question.
Given what you know today, FMSS knew or would have known that it would get away with whatever rates it was asking, because if it walked, AHTC and its residents would have been in trouble.
A:         I guess so. 

(b)/(c)   MPs should not have ruled out a tender, and should have asked CPG to stay on longer
Q:         Thank you. It would also have been proper and honest for the elected MPs to consider whether they can ask CPG to stay on for a longer time to enable the tenders to be done, correct?
A:         Yes.
Q:         In circumstances where the elected MPs were prepared for CPG to continue their services on project management and EMSU to beyond 1 August, the elected MPs should have asked CPG to continue their MA services for a longer period to enable the tender to be done?
A:         I’m not sure whether I can agree to that, because I believe that there are also a lot of other factors that come into play.
Q:         Knowing what you know today, do you agree with me that the elected members of Parliament could and should have invited a tender?
A:         They could have invited a tender, yes.
Q:         In fact, they should have? If they could have then, under the rules, they should have, correct?
A:         I can agree, yes.


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