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.
Comments
Post a Comment