My motivation for this blog is the distaste I find in pro-PAP online posts and comments that lash out at those who question. They dump down on the latter by reposting Dr Teo's media statement of 2 Jan 2013 as their gospel truth. It reflects absolute non-critical thinking capability, of wide-eyed and open-mouthed PAP supporters who slurp up every sliver of explanation dished out without distilling fact from fiction, the credible from the incredulous.
But first, let me dwell on the inconvenient truth of AIM that nobody talks about. What we know of AIM:
- Year Registered: 1991
- Object: IT consultancy
- Physical address : None
- Paid up capital: S$2
- Year Delisted :2015
- Key Officials:
Lau Ping Sum (one share since 1991, director since 1998)
Chandra Das (one share since 2004/director since 2010)
Chew Heng Chin (director since 2010)
My 30 years banking experience during which time I kept a keen eye on financial frauds both locally and internationally, tells me a $2 company, especially a long dormant one, always smells like a rat. If it smells like a rat, it most probably must be a rat. Alarm bells should be ringing.
Back in the late 1980s there were many stories of MPs trying to get onto the boards of private businesses. One MP proposed to join my family's small interior furnishings business, promising to bring in all POSB new branch projects. We never got past talking to his emissaries. It was not worth it. Another that I know of was an MP considering to join the board of a company of Oh Choon Woo. I cautioned against this because the company was under investigation by IRAS. Obviously, the MP was brought in to smoothen the company's tax problems. Eventually IRAS raided the company, and Oh Choon Woo went into exile under mysterious circumstance. But that's another story.
Do not kid ourselves that self-interest ideas never enter the brains of men in whites, million dollar salaries notwithstanding. Remember the MP who sat on the board of 74 companies?
In the centre of the AIM saga is then MP Chandra Das whose integrity is'nt exactly impeccable. In the 1980s when he was either Advisor or Consultant to public accounting firm Deloitte & Touche, he advocated very strongly for bank auditors to be appointed on a rotational basis amongst the top few audit firms. He failed to mention that Deliotte had no bank clients in Singapore and that he had business interest in the firm. This is also the guy who had a thick folder of complaints on him that LKY reviewed and had him removed in 1996. Remember his sudden resignation?
There is a strong suggestion AIM was never a PAP created animal but a vehicle set up by MPs to pursue personal interests. The circumstances seem to support this. It was first set up by Ng Pock Too. The only activity was the 2010 purchase of this software of the town councils. A very prominent personality in IT industry, John Wong Weng Foo, joined the board initially. John would'nt be doing pro bono in a low-key PAP enterprise for sure. Most likely he was to drive the IT business, perhaps to develop a solution for town councils, a niche market in late 1980s when MPs took on the responsibility of running their wards. The government has big time IT company NCS why would PAP be bothered with a startup like AIM.
Why AIM was never a PAP owned company? Because it's the law. All political associations, which comprise all political parties registered under the Societies Act, and any organisation whose objects or activities relate wholly or mainly to politics in Singapore, are forbidden to participate in business.
Now the brilliant men and women of PAP cannot be so naive that they did'nt understand the law. Of course they do. So why then did both Minister Khaw and Dr Teo said in Parliament 13 May 2013 that AIM was set up by the PAP? Because the AIM saga exploded into public prominence. No longer able to cover tracks, PAP had to shield the misdeed and assume ownership of AIM. Then the moment it is conveniently possible in 2015, AIM was delisted. Case closed.
If AIM was indeed a party-owned entity, they need to answer to the Societies Act on its breach. They can monkey round the issue that technically, the shareholders are just two individuals, and since the PAP is not a legal entity, thus do not own AIM. It is the spirit of the law that has been breached.
If AIM was never a PAP company, then they lied big time in parliament and are covering rogue MPs. It is collusion of a corrupt act.
The PAP cannot have it other ways. It is one or the other and that is the inconvenient truth.
Let's dive right into Dr Teo's media statement. There is a lot of goobledygook going on. My humble experience with systems management and development allow me to understand what's going on. As the saying goes, the devil is always in the details. Follow me as I demolish Dr Teo's assertions para by para.The para numberings are mine.
| Media statement by Teo Ho Pin 2 Jan 2013 (1) On 28 December 2012, I issued a press release in response to Ms Sylvia Lim’s statement on the website of the Aljunied-Hougang Town Council. Ms Lim had made various assertions in her statement. However, her statement was made without citing the relevant facts. I now make this further statement to set out fully the relevant facts. I am the co-ordinating Chairman of all the PAP-run Town Councils (“the TCs”). The PAP TCs meet regularly and work closely with one another. This allows the TCs to derive economies of scale and to share best practices among themselves. This improves the overall efficiency of the TCs, and ensures that all the PAP TCs can serve their residents better. In 2003, the TCs wanted to harmonise their computer systems. Hence, in 2003, all the TCs jointly called an open tender for a vendor to provide a computer system based on a common platform. NCS was chosen to provide this system. The term of the NCS contract (“NCS contract”) was from 1 August 2003 to 31 October 2010. There was an option to further extend the contract for one year, until 31 October 2011. In 2010, the NCS contract was going to expire. The TCs got together and jointly appointed Deloitte and Touche Enterprise Risk Services Pte Ltd (“D&T”) to advise on the review of the computer system for all the TCs. Several meetings were held with D&T. ---------- | Comments: (1) Misleading information on the old software. Was it LIES or ignorance. But it influences the thinking process of those trying to follow this AIM saga. The system they purchased was Oracle Financial 11 (OF11). It is an off-the-shelf business application software. Users buy it and customise settings to suit their needs to the extent the various suites of the package allow. . The NCS contract is NO BIG DEAL. NCS did not develop anything. They do not meddle with the software, having no source code. All they did was maintain changes to settings, not the software. They are simply the outsourced IT dept. The town council (TC) team had no IT capability to handle customisation of settings. The NCS contract is nothing but a systems support contract. Which means anyone with OF11 knowledge and understands TC's needs, can replace them. I would think there are many in the market. Be very clear - the support contract was going to expire, but the OF11 application can still function. |
| (2) After a comprehensive review, D&T identified various deficiencies and gaps in the system. The main issue, however, was that the system was becoming obsolete and unmaintainable. It had been built in 2003, on Microsoft Windows XP and Oracle Financial 11 platforms. By 2010, Windows XP had been superseded by Windows Vista as well as Windows 7, and Oracle would soon phase out and discontinue support to its Financial 11 platform. ---------- | (2)This is serious MISINFORMATION. All application software has a life-cycle. The profitable ones live on. But they constantly upgrade as hardware platforms change. OF11 has moved on and I think the current version is OF11i. What Oracle meant was it will no longer support the software version running on old hardware operating systems. Meaning they will stop making any improvements to features in OF11. Users can continue to use OF11 on all those old Windows OS. |
| (3) The TCs were aware of and concerned about the serious risks of system obsolescence identified by D&T, and wanted to pre-empt the problem. In addition, as the NCS Contract was about to expire, they sought a solution which would provide the best redevelopment option to the TCs, and in the interim would allow them to continue enjoying the prevailing maintenance and other services. ---------- | (3)Users have a choice -- upgrade hardware and migrate to new version of OF11i. Oracle and all other developers, normally allow existing users a cheaper upgrade path. Upgrade has distinct advantages -- familiarity and migration of databases. Or users take the opportunity to change software, particularly if they find the old one does not meet their needs. User should not lag too far behind technology changes. Obviously with Windows OS changing, TCs need to keep pace. But the situation was not as urgent as they make it out to be. The role of Deloitte & Touche: There is something snaky. I mentioned above how Chandra Das tried to get the central bank to adopt a of policy change of rotational auditors for banks, but never declared his dealings with D&T and the fact the firm had no bank clients. We wonder if his D&T link is still there. |
| (4) As Coordinating Chairman of the TCs, I had to oversee the redevelopment of the existing computer system for all TCs. It was clear to me that the existing computer software was already dated. The NCS contract would end by 31 October 2011 (if the one year extension option was exercised). However, assessing new software and actually developing a replacement system that would meet our new requirements would take time, maybe 18-24 months or even longer. We thus needed to ensure that we could get a further extension (beyond October 2011) from NCS, while working on redevelopment options. ---------- | (4) No comments |
| (5) D&T also raised with the TCs the option of having a third party own the computer system, including the software, instead, with the TCs paying a service fee for regular maintenance. This structure was not uncommon. We decided to seriously consider this option. Having each of the 14 individual TCs hold the Intellectual Property (IP) rights to the software was cumbersome and inefficient. The vendor would have to deal with all 14 TCs when reviewing or revising the system. It would be better for the 14 TCs to consolidate their software rights in a single party which would manage them on behalf of all the TCs, and also source vendors to improve the system and address the deficiencies. ---------- | (5)There are various ways and means, if the TCs develop their own software. Except for TCs, there are political wiretraps in centralised ownership. What happens when PAP losses a TC? I'm sure Deloitte & Touche never considered politics a factor in their thinking. Of course for the 15 MPs they thought the wards belonged to them in perpetuity. (They were 15 wards before they lost Aljunied). |
| (6) The TCs thus decided to call a tender to meet the following requirements: a). To purchase the software developed in 2003, and lease it back to the TCs for a monthly fee, until the software was changed; b). To undertake to secure extensions of the NCS contract at no extra cost i.e. take on the obligation to get an extension on the existing rates, until the TCs obtained new or enhanced software. This was put in to protect the financial position of the TCs; and c). To work with the TCs to understand their enhancement and redevelopment needs and look for a suitable vendor to provide these upgrades. ---------- | (6) INCREDULOUS! a). Dr Teo is pulling a fast one here. They have NOTHING to sell. They never owned the Oracle Financial 11 software. They were mere licencees. b) Support contract with NCS - OK no problem here. NCS is a GLC, pally with PAP. c) What 'upgrades'? It's a new system they wanted to develop. |
| (7) Under the tender, the TCs sold only the IP in the old software. The ownership of the physical computer systems remained with the individual TCs. We wanted to sell the IP rights in the old software because it had limited value and was depreciating quickly. Had we waited until the new system was in place, the IP to the superseded old software would have become completely valueless. The TCs advertised the tender in the Straits Times on 30 June 2010. Five companies collected the tender documents. These were CSC Technologies Services Pte Ltd, Hutcabb Consulting Pte Ltd, NCS, NEC Asia Pte Ltd and Action Information Management Pte Ltd (“AIM”). I am aware that NCS considered bidding but in the end, decided not to do so as it was of the view that the IP rights to software developed in 2003 on soon to be replaced platforms were not valuable at all. Another company withdrew after it checked and confirmed that it was required to ensure renewal of the NCS contract without an increase in rates. The company did not want to take on that obligation. The others may also have decided not to bid for similar reasons. In the end, only AIM submitted a bid on 20 July 2010. ---------- | (7) I REPEAT, THEY HAVE NOTHING TO SELL. What Intellectual Property right was Dr Teo talking about? They were merely licencees of the OF11 software. Oracle never gave them IP over the software that is damn well for sure. The fact that of the 5 companies that collected the tender documents, only AIM submitted a bid is no surprise. They saw through the scam. Assuming the TCs have an IP to sell (which I absolutely don't believe), why would management go about a tendering process when they are faced with more crucial tasks -- attending to develop a new system? Well there is a reason -- if they can monetise it for big money. But see Dr Teo's math below -- they expect to net a miserable $8,000). And even in this, Dr Teo got it wrong. See below. Is this PAP narrative believable? - Go through a hustle of a tender to sell a software for a net gain of $8,000? - Go through such a hustle when they were going to ditch the software to develop a new one? |
| (8) We evaluated AIM’s bid in detail. First, AIM’s proposal to buy over the software IP would achieve our objective of centralising the ownership of the software, consistent with the model suggested by D&T. AIM was willing to purchase our existing software IP for S$140,000, and lease it back at S$785 per month from November 2010 to October 2011. The lease payments to AIM would end by October 2011, with the expiration of the original NCS contract. Thus after October 2011, the TCs would be allowed to use the existing software without any additional lease payments to AIM, until the new software was developed. This meant that the TCs expected to gain a modest amount (about S$8,000) from the disposal of IP in the existing software. ---------- | (8) Why did AIM offer $140,000? Because politicians who try to play businessman NEVER PUT IN A RESERVE PRICE. Talking about protecting residents interest! They don't really know how. Once again Dr Teo gets it wrong even with this simple maths. During this time, there were 16 TCs, not 14. The real math: $140,000 - ($785 x 12 months x 16 wards) = ($10,720) DR Teo, you actually lost $10,720. You conveniently ignored Aljunied + Hougang also had to pay up. You were doing a belated narrative so such details get lost. Understandable. |
| (9) Second, AIM was willing to undertake the risks of getting an extension of the NCS contract with no increase in rates. This was the most important consideration for us, as it protected the TCs from an increase in fees. ---------- | (9) NCS, AIM, 14 TCs -- all one happy PAP family. What's the big deal? Is Dr Teo saying AIM are better negotiators than 14 MPs? |
| (10) Third, we were confident that AIM, backed by the PAP, would honour its commitments. ---------- | (10) Aha. now we're talking! But note, this was 2 Jan 2013, so Dr Teo had to say "backed by PAP". It was only on 15 May 2013 that Minister Khaw said AIM was owned by PAP. |
| (11) Given the above considerations, AIM had met the requirements of the tender on its own merits. We assessed that the proposal by AIM was in the best interests of the TCs, and thus awarded the tender to AIM. Under the contract with AIM, the TCs could terminate the arrangements by giving one month’s notice if the TCs were not satisfied with AIM’s performance. Similarly, AIM could terminate by giving one month’s notice in the event of material changes to the membership of a TC, or to the scope and duties of a TC, like changes to its boundaries. This is reasonable as the contractor has agreed to provide services on the basis of the existing TC- and town-boundaries, and priced this assumption into the tender. Should this change materially, the contractor could end up providing services to a TC which comprises a much larger area and more residents, but at the same price. ---------- | (11) A $2 company with no physical office nor staff wins a tender. Only PAP IBs understand this. The rest don't. AIM's right to terminate on events - 'material changes to the membership of a TC", borders change, area gets bigger and more residents. None of these events impact the support services for a software. ABSOLUTELY NOTHING. So who proposed this clause? Why did'nt you protect residents' interests? Was it meant to FIX the opposition at all cost, screw the residents? Dr Teo, please speak simple English. This is a service denial clause. If the TC goes to an opposition party, AIM will strike the TC out. Now at that time, Aljunied was a PAP ward. So the AIM contract really protected the interest of residents, only in warped mind of Dr Teo. The real clause should read : "If you vote opposition, screw you" |
| (12) Since winning the tender, AIM has negotiated two extensions of the NCS contract until April 2013, at no increase in rates. The first extension was from November 2011 to October 2012, and the second from November 2012 to April 2013. The TCs received a substantial benefit in terms of getting the extensions from NCS beyond the original contract period, without any increase in prices. --------- | (12) Wow what fantastic valued added by AIM. Since AIM has no staff, they could by magic make NCS toe the line what 14 MPs were unable to do. What Dr Teo really meant was 14 PAP MPs were so inutile they cannot talk to a PAP owned GLC. OK let's re-do the math: (This part inserted 25 Oct 2019) (Assumption -- Aljunied + Hougang no longer under AIM contract after 2011 Election (last month Jul 2011) Nov 2010-Jul 2011 : 16 TCs paid $785 x 8 mths x 16 = $100,480 Jul 2011-Apr 2013 : 14 TCs paid $785 x 33 mths x 14 = $362,670 Sold $140,000- Paid 463,750 = LOSS of $323,150 What is the logic of Dr Teo for the sales & leaseback? Notice how cleverly Dr Teo did'nt mention this in his pata. This is the bottom line of the AIM fiasco: TCs paid $323,150 to AIM for what? - For negotiating with NCS to extend their support contract to TCs with no increase in rates. UNBELIEVABLE!!!!! |
| (13) AIM has also been actively working with several vendors to explore new software options and enhancements for the TCs. AIM has identified software from a number of possible vendors, and has invited them to make presentations to the TCs in order for a suitable option to be chosen. | (13)Chee that's fantastic. That a $2 company with no physical office or staff can do such a remarkable job that 14 MPs with $16,000 monthly allowances cannot. That AIM, with no working staff, knows better than the property management company of the town councils. That AIM, having inserted themselves into TC software management business, did their best to get a vendor that will kick them out. |
Note: I edited comments above 25 Oct 2019. There are 16 town councils including Hougang & Aljunied. I have also expanded comment (12) to redo the math. This is an important part and I forgot - my bad).
Dr Teo's statement is dripping with inaccuracies and nonsense. It is nothing but doublespeak to defend the indefensible.
Not too sure what the new system that NEC tendered for about $16m is like. If they adopt the D&T suggestion of a separate entity to own the software, a new version of AIM, then the PAP is setting the ground for future disputes. What happens to any of the remaining 14 wards if the opposition takes over? Will IT services be denied just like Aljunied? Are residents' interest really served? $16m is a lot of money, paid out by residents. Is the message to residents actually "If you vote opposition, screw you". They way they screwed Aljunied.
A loosing PAP MP is petulant and juvenile if he takes the line, as done before, that having managed a ward, they have the right to withdraw whatever initiatives they put in. Residents don't belong to PAP. In the same way, a company does not belong to the CEO (unless he happens to be the sole shareholder) and so a departing CEO hands everything over log stock and barrel to an incoming CEO.Shame on you PAP MPs, if you think otherwise.