FMSS’ PROFITS VS AHTC’S DEFICITS


FMSS’ PROFITS VS AHTC’S DEFICITS

FMSS’ How Weng Fan (How) was cross-examined by Mr Davinder Singh (DS) today.

For those unfamiliar with FMSS, this was a start-up MA company started by How and her late husband, Danny Loh (Loh), both WP supporters, in May 2011. FMSS was awarded two MA contracts by the WP-controlled AHTC despite lacking experience running a GRC. The first 1-year MA contract with a value of about S$5 million was awarded to FMSS by waiver of tender.  The second 3-year MA contract with a value of about S$16 million was awarded by tender to FMSS, though FMSS was the sole bidder.  These figures exclude separate (and additional) project management fees paid by AHTC to FMSS.

During the earlier part of the TC trial, we learnt from the WP MPs that FMSS charged more than CPG, the incumbent MA, even though the FMSS contract was stated to be “at the prevailing Managing Agent’s fees and fees structure as per the existing Managing Agent contract” .

However, what is stark from the cross-examination of How are the huge profits that FMSS made from its sole TC client, AHTC, through the two MA contracts.

Barely after more than one year of incorporation and operations, FMSS generated a profit after tax of some S$510,000 for FY 2012/13 – after paying its owners/directors some S$700,000 in fees and salaries and S$300,000 in consultancy and secretarial fees.  In other words, FMSS’ owners/directors received about S$1.5 million in FY2012/13.  In sharp contrast, AHTC suffered an operating deficit of S$1.5 million in that same FY – even though it enjoyed an operating surplus of more than S$3 million in its last FY under the PAP, where CPG was operating as the MA.

In the next year, i.e. FY 2013/14, FMSS increased its profits after tax to some S$2 million – a 300% increase within a short span of a year! – after paying its owners/directors some S$840,000 in fees and salaries and S$300,000 in consultancy and secretarial fees.  In other words, FMSS owners/directors received about S$3.2 million in FY 2013/14.  Again in sharp contrast, AHTC’s operating deficit worsened to S$2 million in that FY.

The contrasting fortunes of FMSS/its owners/directors and AHTC is best illustrated by the following two charts:






The burning question that arises from the above is this: how did FMSS – a start-up company, with no track record or relevant experience, and with only a single TC client – achieve such substantial profits for its owners/directors in such a short span of time?

Further, all these profits are in addition to the salary that How herself drew as the General Manager of AHTC.

Clearly, the lucrative MA contracts awarded by the WP Defendants to their supporters, How and Loh, had greatly benefitted them financially.  Most troubling, however, is how such enrichment appears to have come wholly at the expense of the TC and its residents. 






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