The PAP announced yesterday that Mr Lim had written to its secretary-general, Prime Minister Lee Hsien Loong, earlier in the day to withdraw his candidacy.
Mr Lee has accepted his request.
Calling latest allegations baseless, Lim also said the episode is causing his family pain
The controversy surrounding Lim, one of 27 new PAP candidates introduced last week, comes days before Nomination Day on Tuesday. It had caused concern among party activists that the issue would cloud the ruling party's campaign for the July 10 election.
In his letter to Lee on Sunday (June 28), Lim said further allegations emerged against him after he issued a clarification in response to initial allegations about his conduct at work and as a national service commander.
Mr Lim said the new allegations were "baseless".
"I recognise that the controversy over my candidacy has eclipsed the core issues of what this election should be about - Singapore's future and the difficult steps we have to take to recover from Covid-19," he wrote.
"The controversy has also caused intense pain and stress for my family. I cannot put my family through this," added the general manager for specialised vessels at Keppel Offshore & Marine. He said he appreciated the support the party has given him in this period.
In his letter accepting Lim's decision, PM Lee said that the controversy about Lim's candidature was unfortunate.
"Ideally, there would have been a fair and deliberate consideration of these allegations.
"Unfortunately, the nature of the campaign is such that we do not have time for a thorough investigation. The allegations spread like wildfire online, eclipsing the serious life and death issues we must grapple with," he wrote.
PM Lee said he respected Lim's decision to withdraw, adding that he regretted the stress that Mr Lim and his family have had to bear during this period.
"I hope Singaporeans will give you and your family the peace and privacy to recover, and welcome your continued contribution to our society," added PM Lee.
Lim, 42, who had been walking the ground in Jurong GRC and was expected to be fielded in the constituency, had earlier yesterday responded to allegations of elitist behaviour and lack of humility in a statement through the party. He had said that he was "determined to stay the course and to serve if I am elected".
After Lim was introduced as a candidate on Wednesday, several posts on social media accused him of elitist behaviour and of being arrogant as a national service commander, among other things.
They were made by people who claimed to have known him during NS, in polytechnic, or at work.
However, several others who knew Lim defended him in posts online. A video with three colleagues speaking about his character and qualities emerged on social media yesterday.
Lim responded to the allegations publicly for the first time in a statement issued by the party, saying: "I accept that I can always do better and I am willing to learn. I will take this experience to heart and do my best to prove myself to voters and all Singaporeans."
In his initial statement, Lim said an allegation that he was involved in a bribery case concerning his company in Brazil was "completely baseless and untrue".
"I was not involved in any of the Brazilian projects," he said.
As for the stories about the army incidents, people can have different perspectives on the same incident, he added.
Lim also said he set high standards for his military unit as a commanding officer, and that he did not ask soldiers to do something he was not prepared to do himself.
On criticisms from a former colleague, he said: "The shipyard industry is a tough and exacting one, and we have always required high standards of Keppel colleagues to ensure that they can return home safely to their families."
As for another post on how he did not smile to a neighbour in a lift, he said he did not recall a specific incident, adding: "However, like many others who live in apartments, I know some neighbours better than others and interact with some more than others."
Lim's statement came shortly after Deputy Prime Minister and PAP first assistant secretary-general Heng Swee Keat said that Lim should clarify the online criticisms.
Associate Professor Bilveer Singh of the National University of Singapore's (NUS) political science department said the PAP has prided itself on recruiting the best and brightest, but when such cases emerge, people will have deeper questions on the process.
He said of Lim: "If he withdraws, it will reflect badly on the PAP's judgment and selection process. But I think the backlash would be even greater, if he's kept."
NUS sociologist Tan Ern Ser said that while criticisms could be rationalised away, the court of public opinion may not be so easily convinced, if many already have a negative perception of him.
"The party leadership may have to weigh the odds of a fallout affecting the election outcome versus, say, a strong conviction that the candidate is a victim of a smear campaign and the party should therefore stand by its man, come what may."
The 2011 General Election also saw a PAP candidate introduced who was eventually not fielded.
Unionist Steve Tan, then 37, dropped out on the eve of Nomination Day after allegations against him by former colleagues surfaced.
He would have been fielded in Tampines GRC, but Mr Baey Yam Keng was moved there and orthopaedic surgeon Chia Shi-Lu, then 39, was fielded in Mr Baey's place in Tanjong Pagar GRC. Party leaders explained that Mr Chia was top of the party's reserve list.
Defence Minister Ng Eng Hen, who was in charge of candidate recruitment, said then that the PAP always catered to last-minute changes and had four reserves that year. "It is not the first time that we have changed candidates at the last moment and it won't be the last," said Dr Ng then.
Associate Professor Tan said the Lim incident could embolden others to use the same approach to call out candidates for public office in future.
"In the age of social media, any accusations could easily go viral, like a forest fire, and destroy the accused, unless the latter is able to do a quick comeback with a robust rebuttal, rather than let it simmer over several days," he added. - The Straits Times/Asian News Network
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