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Saturday, 10 March 2012

Bankers and lawyers should know better

FOOD FOR THOUGHT By DATUK ALAN TONG

BUYING a property that eventually becomes abandoned is a painful experience for many house buyers. It not only hurts purchasers who have lost their hard-earned money but also affects the property industry's reputation which has taken a beating due to unethical activities of a few culprits.

This is particularly so when the abandoned project is not caused by factors such as economic downturn or withdrawal of purchasers, but solely due to irresponsible people who claim to be “developers” but do not hold a licence to do so.

It was recently reported that our Housing and Local Government Ministry has identified 195 abandoned developments that were unlicensed in our country. I am puzzled as to how these “developers” are able to start their projects when they do not even have their licence to apply for financing if they require a bridging loan, and is their sales and purchase (S&P) agreement properly attested by a lawyer before they start selling?

In this context, what can be done and who should play a part in reducing these unlawful developers? Assessing our existing housing development process would provide us with some ideas.

When a developer plans for a housing project, he must first get the necessary approvals and licences from the relevant authorities such as the development order, building plan, advertising permit and developer's licence. The developer then may need to source for a bridging loan from a financial institution and this is followed by getting lawyers to prepare the legal documents which include the S&P agreement.

When the project is launched to the market, the developer will require the purchasers to sign the S&P agreements in order to finalise the purchase. Should the purchaser acquire a housing loan from a bank, the bank will come into the picture to process the loan application submitted by the purchaser. Those are the basic procedures involved in developing and marketing a housing project in Malaysia.

For unlicensed development, the regulatory bodies are not in the picture. In such cases, it becomes apparent that the lawyers and/or bankers, both representing the house purchaser, have a role to play as the first line of defence to protect the interest of the purchaser.

Hence, there are questions that begged to be answered. How is it possible for financial institutions to approve the end financing loan for a property development in the absence of all or part of the required approvals and licences? The same questions are posted to lawyers who prepare the legal documents for unlicensed development.

I believe everyone has a role in identifying irresponsible players in the industry, especially the bankers and lawyers with their better access to information and strong regulatory network as compared to the general public. As a purchaser and a customer, you would have expected your banker and lawyer to carry out their due diligence duties to ensure that your interest is not compromised.

In other industries, professional practitioners who do not convey the right message and do not protect customers' interests can be given stern punishment as their action may be deemed as negligence, fraud or even criminal breach of trust.

According to the record of National House Buyers Association, in the case of Keng Soon Finance Bhd (1996), a financial institution had granted a loan to an unlicensed developer, and it was decided that the loan and the security offered were invalid. The bank could not institute the foreclosure proceedings on the land and therefore could not recover its loan.

Under our Housing Development Act, a property developer that engages in, carries out or undertakes housing development without having been duly licensed can be fined between RM250,000 and RM500,000 or to imprisonment for a term not exceeding five years or both. This is an avenue to take action against unlicensed developers. While we have the law in place, it is equally important to ensure strong enforcement comes along.

For house buyers, you are strongly advised to purchase property from reputable developers and to do thorough “shopping” and analysis before signing on the dotted lines. Responsible developers are keen to work hand-in-hand with purchasers and appreciate the role of the National House Buyers Association which advocates the protection of house buyers in Malaysia. We should stand together as a team to fight against irresponsible developers.

And for anyone of you who think that you have bought into one of those unlicensed developments mentioned earlier in the article, it is time to write and call your banker or lawyer for clarification.

Datuk Alan Tong is the group chairman of Bukit Kiara Properties, he was the FIABCI World president in 2005-2006 and was named Property Man of The Year 2010 by FIABCI Malaysia.

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The fear factor in property

Houses prices hardly fall

HOUSING INVESTMENTS By THEAN LEE CHENG 

 On a per sq ft basis, it has risen

THERE was a lot of talk late last year that property prices will tumble in 2012 after the steep rise in the residential sector over the past few years. So far, we have not seen any of that.

What we are seeing is:

Bank Negara's tightened guidelines on consumer lending have started to work. Loan applications and loan approvals have fallen in January;

● In certain locations, house prices and rental have started to ease; and

● Developers are offering very enticing terms since the beginning of this year.

Keep your finger on these three factors and let us now take a look at today's launches. In some of these launches, buyers need only to pay about 1% downpayment of the property price instead of the required 10% on signing of the sale and purchase agreement. The stamp duty and legal fees are also waived and they need not pay anything else until after the property is completed. Such schemes have attracted many buyers.

The question to ask is: If the market is as good as many claimed it to be, why are developers offering such schemes? When a property is sold, it is registered as a sale. But the absolute revenue of the unit is yet to be paid.

For easy calculation purposes, 10% of a RM500,000 property is RM50,000. If the first 10% is paid, this RM50,000 is registered as revenue by the developer, but in the sales column, a sale of RM500,000 is recorded. That is why the sales and revenue figures vary considerably.

If a developer allows a buyer to pay only 1% of the purchase price, this does not mean he “loses” that other 9%. He will get it back after a certain period of time. The same goes for the waiver of the stamp duty and legal fees. The developer has to pay the lawyers for services rendered. All these charges and fees are packaged into the deal which the buyer will have to bear in due time. In this case, later rather than sooner.

Developers are offering such attractive terms in order to make a sale. Many of these schemes are offered in condominium projects because there is generally a glut in this segment. While such schemes may attract genuine buyers who need a roof over their heads and who are thankful that they can defer payment, it also attracts those who have no problem forking out that 1% downpayment and take a gamble that they will be able to offload it when the project is completed.

If one were to drive around certain parts of the Klang Valley today, there are some completed high-rise with large mobile numbers plastered on windows. It may not be so easy to offload units when there are so many of them.

What is noticeably absent, and which many would like to see are more launches of landed housing. But this is unlikely to happen. Only the secondary market is offering landed units, which may explain to a certain degree why the secondary market was rather robust last year. It applies not only for the Klang Valley, but for Penang as well and is a reflection of strong domestic demand despite the many negative predictions for this year.

When a developer considers a piece of land, he thinks of how much he can make from it. If he were to build a condominium and throw in various facilities, he can sell more houses than if he were to build landed units. That is why most of the launches today are high-rise projects, be it condominiums or serviced apartments.

Developers are also limited by what they have. Increasinlgy, land in city centres and popular areas are getting smaller. Which explains why in highly dense areas, condominium projects continue to be sprout up in the most congested of areas.

The development of landed units can only take place when there is large tracts of land, which also explains why the big boys like Mah Sing and SP Setia are venturing further away from city centres.

The other obvious factor in today's launches are the size and price of the condominium units. Most of the units are small. Studio apartments may be in the 500 sq ft range or thereabouts while those targeted at families may be three-bedroom units with built-up areas of 1,200 sq ft onwards. Most of the launches today are priced close to RM700,000 onwards. On a per sq ft basis, the price is still going up, whether it is a Petaling Jaya address or a Bukit Jalil one.

So, while sales volumes may stagnate in newly-launched projects (which explains why developers are offering units for sale with a 1% downpayment), on a per sq ft basis, prices does not seem to be stabilising. Developers are trying to maintain affordability by having smaller units, deferring payment and leveraging on low interest rates.

Assistant news editor Thean Lee Cheng is glad that Bank Negara is monitoring the household debt and lending in the property sector closely as this year promises to be an exciting one.

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Malaysian High-end property expected slower 
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Friday, 9 March 2012

Secondary property market set to soar

By DAVID TAN davidtan@thestar.com.my

Majlis Perbandaran Seberang Prai Office at Ban...
THE sub-sale prices of landed property in the prime locations of Seberang Prai are expected to increase by 5% to 10% this year.

Henry Butcher (Seberang Prai) senior manager Fook Tone Huat said this was because there was stronger demand for landed property in the secondary market.

“In the secondary market, a terrace property in prime locations such as Bukit Mertajam, Simpang Ampat and Jalan Raja Uda is priced around RM385,000 now, about 10% higher than a year ago but relatively reasonable,” Fook said.

The stricter conditions of bank lending, a weak global economy and a higher pricing of new landed property would see transactions in Seberang Prai rising only slightly in 2012 over 2011.

Fook said: “However, we expect more property transactions in the sub-sales market due to the attractive prices,” he said in an interview.

He added that last year, there were about 18,000 transactions of new and old property in Seberang Prai. About 50% of the transactions were for new property, while the sub-sales comprised about 30%, he said.

Fook said that in general, the Seberang Prai property market for 2012 would be challenging in view of the uncertainty in the global economy and the new set of financing ruling imposed by Bank Negara.

“The take-up rate for those high-end categories is expected to gradually slow down but for those in the medium categories, the sales rate should still maintain,” he said.

Prices would still be on the upward trend for landed houses priced below RM500,000 and for development land in the prime areas, but the rate would be at a slower pace.

“For those high-end property, prices are expected to be flat. Nevertheless, property prices are not expected to decline in view of the relatively resilient domestic economy and the long-term impact from the new economic transformation programmes,” he said.

Related post:
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Lawyers must constantly improve skills

By Roger Tan

The Bar Council will be advocating the CPD scheme at the 66th annual general meeting of the Malaysian Bar, and we, as lawyers, must not be averse to change.  
English: Bar Council of Malaysia (headquarters...

TOMORROW at the 66th annual general meeting of the Malaysian Bar, the Bar Council will attempt for the fourth time, after failing in 2003, 2005 and 2006, to introduce a mandatory Continuing Professional Development (CPD) scheme for all practising lawyers and pupils in Peninsular Malaysia.

Under the proposed CPD scheme, a lawyer will have to chalk up 16 CPD hours or points in each 24-month cycle commencing July 1.

A pupil, on the other hand, has to accumulate eight CPD hours during his nine months of pupillage 
(training). The CPD points can be earned from participating in a variety of CPD activities - ranging from attending courses and seminars, lecturing, writing law books and articles (such as this I hope) to attending Bar’s general meetings and activities in accordance with a set of CPD Guidelines.

This scheme will be implemented on a voluntary basis for the first two years. After that, failure to accumulate the requisite CPD points within the stipulated period may result in the lawyer not being able to renew his practising certificate for the following year and the pupil not being able to be admitted to the Bar.

In addition to this, the non-CPD compliant lawyer may also face disciplinary proceedings as this may be tantamount to a “misconduct” within the meaning of section 94(3)(k) of the Legal Profession Act 1976 (LPA).

It appears that the main reason why the Bar Council is advocating the CPD scheme is that other Malaysian professionals like architects, engineers, company secretaries and accountants as well as other major legal jurisdictions like Australia, Britain, Hong Kong, Ireland, the Netherlands, the Philippines, Singapore, South Africa and the United States all have a mandatory CPD scheme.

However, to me, there must first be in place a proper legal framework and infrastructure for implementing the CPD scheme before it is made mandatory. Perhaps, the Bar Council can successfully come to grips with these matters in a matter of two years.

In this respect, we have much to learn from Singapore how it prepares the legal profession there for the CPD scheme which is expected to be fully implemented by April.

Its CPD scheme will be administered by the Singapore Institute of Legal Education (SILE). No lawyer will be exempted as of right from the scheme, but those who seek exclusion from it may apply to a Waivers Committee established under the SILE.

For this purpose, the Legal Profession Act of Singapore (SLPA) was amended. Section 10(2)(i) of SLPA empowers the Board of Directors of SILE, after consulting the Singapore Minister of Law and Council of the Law Society, to make rules to “prescribe the requirements relating to continuing professional development that must be satisfied by advocates and solicitors … and the measures which may be taken to verify whether those requirements have been complied with and to enforce compliance with those requirements.”

Currently, our LPA does not have a similar provision, albeit it can be argued that such rules can still be made under section 77(1) LPA with the approval of the Attorney General.

Further, if Sections 32 and 10 of the LPA are not respectively amended, it may be unlawful for the Bar Council to deny a lawyer his practising certificate or prevent a pupil from being admitted to the Bar for non-compliance with the CPD Guidelines.

Further, it is arguable whether a resolution of the Bar of this nature can be treated as ‘law’ within the meaning of Article 5 of the Federal Constitution which provides that no one should be deprived of his life (which our courts have interpreted to include livelihood) save in accordance with the ‘law’.

In any event, it is hoped that before the CPD scheme is made mandatory, the Bar Council will resolve these issues as well as consider the idea of incorporating a special purpose vehicle wholly owned by the Malaysian Bar to administer the CPD scheme.

Apart from the above reservations, I would declare my support for a mandatory CPD scheme. In coming to my decision, I find support in the words of Singapore Chief Justice Chan Sek Keong and the then Law Society vice president Wong Meng Meng spoken on May 29, 2010 at a ceremony admitting 248 new lawyers to the Singapore Bar.

“The law is a profession of life-long learning and the best lawyers are those who learn all the time. Unless you work at it continually, it may still not be very much at the end of your career. A lawyer can never truthfully say that he has learnt enough, and the day he says that is the day he should retire from practice,” Chan said.

“If a lawyer thinks that he has absolutely not enough to learn then that is the beginning of his downfall. And that is also part and parcel of arrogance,” added Wong.

Of course, there are various opposing views to making the CPD scheme mandatory, for example, that there should be no interference with a professional’s independence and neither should they be forced and treated like children. Life-long learning is a personal choice and if the lazy and egotistic ones do not improve themselves, they will soon be consumed by market forces. In other words, one can lead a horse to water but one cannot make it drink! The scheme is introduced essentially to address the problem with poor attendance at the Bar’s annual general meetings and law seminars and conferences.

Also, compelling lawyers to attend courses cannot guarantee that they will be attentive during the entire exercise. The CPD points can be easily manipulated as there is no effective mechanism to ensure that members who sign up for the relevant CPD activities will stay on until completion. For practitioners from small firms and in remote areas, they are genuinely concerned about the costs involved and the accessibility to CPD activities in and near the areas where they practise. Most of all, it is not fair to say that those who are against CPD are not for continuing professional development when the whole scheme has not been thought through carefully.

Some of the above views are not without basis. But they are not new. The list will go on for those who are just not interested in it. They had all been employed in the last three mentioned annual general meetings to shoot down this proposed scheme. Of course, in the light of the last three unsuccessful attempts, had the Bar Council gone ahead to legislate and introduce it without first reverting to the members, the entire Council will most likely be hauled up to answer a motion of no confidence in an extraordinary general meeting.

But that should not mean that this time we should resign to fatalism as if we are flogging a dead horse simply because a voluntary scheme would never work. We must not be averse to change and must have the courage to show that we can self-regulate in our interest as well as in the public interest. To my mind, acquiring knowledge is just like drinking water. No doubt, there are bound to be teething problems in its initial implementation, but unless we bite the bullet and go ahead with it, we would never to able to realise its potential benefits.

In fact, this minimal means of maintaining and improving lawyering skills is hardly a painful process. In Singapore, in addition to meeting the requirement of CPD, a lawyer who now intends to practise as a sole proprietor or a partner of a law firm must also successfully complete the Legal Practice Management Course conducted by the Law Society. Section 75C of SLPA also states that only a lawyer or a legal officer of more than three years of experience is allowed to set up or join a law practice as a sole proprietor or a partner. Similarly, in most other jurisdictions, all new law graduates are also required to sit and pass a common Bar examination.

Favouring a mandatory scheme will show that we lawyers are committed to maintain and remain professionally competent in the public interest.

I am sure experience tells us if it is to be left to the individuals to undertake continuing professional development, little will be done. There is also no point to bemoan the declining quality of new entrants to the legal profession if we the current practitioners do not lead the way in raising the bar towards excellence.

It is for this same reason that we say lawyers practise law because we can never be perfect in it, and we have to keep on practising with the hope that someday we will become perfect in what we practise. Hopefully, that day will be day when we retire from law practice.

That said, the biggest concern now is actually how many lawyers will bother to turn up for the meeting tomorrow. With the 2006 amendment to the LPA, the quorum is now set at 500 out of 14,000 lawyers. It is anticipated that not more than 1,000 will attend, and by the time the vote is taken on the motion, there will probably be not more than three to four hundred lawyers left to make a decision that will affect all these 14,000 learned lives.

In those years before 2006 when it was mandatory to meet the high quorum requirement without which the new Council could not be formed to issue practising certificates, thousands of lawyers would somehow with the fine spirit of camaraderie make an effort to meet this mandatory requirement. But tomorrow, when attendance is almost entirely voluntary, will tell whether this motion will be killed for the fourth time or carried for the very first time. Let us hope that the insouciance and ‘tidak-apa’ attitude of majority of members of this honourable profession will not once again take the blame.

Finally, may all lawyers draw wisdom from these inspirational words of Maimonides (1135-1204) in the Daily Prayer of a Physician before Visiting a Sick Man: “When wiser men teach me, let me be humble to learn; for the mind of man is so puny, and the art of healing is so vast … May there never rise in me the notion that I know enough, but give me strength and leisure and zeal to enlarge my knowledge. Our work is great and the mind of men presses forward forever.”

*The writer is a former member of the Malaysian Bar Council.

Jail for Hoslan, a former imam who thew slipers at judges

Court finds former imam guilty of throwing slippers at judges

 By M. MAGESWARI mages@thestar.com.my 
Feeling remorseful: Hoslan apologised to the judiciary yesterday for what he did at the Federal Court.

PUTRAJAYA: A former imam who created a stir when he threw his slippers at a panel of three judges during a court proceeding last month has been sentenced to a year in jail for contempt of court.

Hoslan Husin, 46, was found guilty on grounds that he had failed to give a sufficient explanation for his conduct.

Hoslan, who wore a green serban and clad in a black robe, arrived at the Federal Court at 9.35am without any shoes.

Chief Judge of Malaya Justice Zulkefli Ahmad Makinudin inform-ed Hoslan that a show cause notice had been issued to him for contempt of court after one of his slippers hit a deputy registrar who was on duty in court that day.

Hoslan was said to have committed the offence during a proceeding in the Federal Court between 10.15am and 10.30am on Feb 22.

Hoslan’s lawyer, Karpal Singh, said “his (Hoslan) actions is indefensible but there are other considerations”.

When asked to give an explanation, Hoslan said: “This is a charge imposed on me. I am confused. From the very beginning, everything has been confusing.

“The case should be heard in a Syariah court and not a civil court. The sentence for an imam should be decided by a Syariah court if he is found guilty,” he said.

Hoslan then started sobbing. He bowed his head and covered his face.

In an unanimous decision, Justice Zulkefli said the Bench convicted Hoslan for contempt of court after he failed to give a sufficient explanation during show cause proceedings.

In mitigation, Karpal said Hoslan regretted his actions and was prepared to apologise to the court.

Karpal said Hoslan, who is an environmental officer, has seven children aged between six and 16 and aged parents to take care of.

Hoslan expressed remorse for what had transpired in court and apologised to the judiciary.

Related post:

Judges, Throw the book at Hoslan! 

Thursday, 8 March 2012

IBM's New Optochip Transfers One Trillion Bits Per Second

By Alex Knapp, Forbes Staff

The Holey Optochip (Credit: IBM Research)

As Big Data increasingly becomes a part of our economy bandwidth becomes increasingly important. Not just wired or wireless bandwidth, either. When it comes to server racks and supercomputers, the internal bandwidth within a computer also matters a lot more.

IBM has made a big step forward in improving that bandwidth with their announcement today that they’ve developed a parallel optical transceiver – dubbed the “Holey Optochip” – that’s capable of transferring information at the rate of one trillion bits per second. That’s eight times faster than currently available optical components.

“We’re trying to deliver a component that looks like an electrical chip,” IBM researcher Clint Schow told me on the phone yesterday. “But it also had to be dense, compact, and power efficient. We were also focused on delivering it with components available today.”

IBM Paves The Way Towards Scalable Quantum Computing

For the prototype optochip, the IBM research team drilled 48 holes in a conventional 90nm CMOS chip, which then allowed for the placement of 24 receiver and 24 transmitter channels within the chip. Because it’s so compact, the chip is incredibly power efficient – it consumes less than five watts. And by using a standard CMOS chip, they’re able to bring the interconnects as close to the processors as possible, which allows for its incredible transfer speeds.

IBM’s next step will be to work with commercial partners to further refine and develop the chip. Even though the current iteration is only a prototype, Schow is confident that the development cycle for commercial applications will be short. That’s because all of the individual components of the chip are readily available, and the modifications can be performed without customized equipment.

“Part of the real advantage of this chip is that we put it together by using small tweaks in clever ways,” he said.

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Middle East Faces Tensions Between Online Child Protection and Internet Freedom

Larry Magid, ForbesContributor

Panelists talk about how to protect children without censoring the Internet in Qatar

I’m in the Persian Gulf state of Qatar for a two-day conference where representatives of government, non-profits and businesses from throughout the Middle East will join their counterparts from other regions to discuss “Promoting Online Safety and Cyber Ethics in the Middle East.” The conference is run by the Washington-based Family Online Safety Institute (FOSI) along with ICTQatar. Sponsors include Google, Microsoft and Vodaone.

Social media and Arab Spring

I came to moderate a panel on the impact of social networking where speakers from Facebook, Yahoo, Aljazeera and OfokSystem talked about the role social networks like Facebook and Twitter played in Arab spring. Although conditions on the ground in Egypt, Tunisia and other countries were responsible for the unrest, social networking provided a vehicle for protestors to spread the word and organize protests.  There was a general consensus among the speakers that the best path for governments going forward is to encourage openness and a free flow of information lest other leaders risk following in the footsteps of ousted Egyptian leader Hosni Mubarak.
David Gross

The conference’s opening sessions featured a discussion between FOSI CEO Stephen Balkam and  former U.S. ambassador David A. Gross, who took delegates on a walk down memory lane about the history of Internet regulation in the U.S. and Europe.

Balkam asked Gross to comment on the tension between the tendencies to want to protect children via Internet regulation and government imposed filtering vs. wanting to promote free speech.

“Every parent naturally as a matter of biology as well as intellect wants to protect children,” said Gross. “A lot of these issues are variations of an old theme with each country wanting to make its decisions in their own way based on their own culture.”

But what’s different is that kids are often more tech savvy than adults. “The extraordinary and maybe unprecedented twist is that technology and Internet related technology seems to be more intuitive for young people than the adults who are making the rules.”

Gross said that the Internet does not lend itself to being heavily regulated by government but instead “a more organic multi-stakeholder approach that includes government but also schools, parents, non-governmental organizations and corporations “coming together to field their way through it.”

Changes over time

Gross pointed out that the difference between the nineties and now “is that the issues are more complex,” thanks in part to cloud computing and the rise of international companies like Google and Microsoft.  Also, the discussion, which used to be between Europe and the U.S. is now “a conversation that is truly global which means that the complexities have gone up enormously. Instead of two players you now have 100+ players,” he said.

Recognizing cultural differences among countries, Gross does not advocate a one-size-fits all policy.  “Ultimately there are going to have to be accommodations and how these things get resolved will fundamentally determine the economic well being of many countries.” While this may seem daunting, he’s optimistic that it can be worked out. “With technology and clever policy making everyone will be able to live within their own set of rules.”

In the past, said Gross, “what your future would turn out to be depended mostly on who your parents were and where you were born but, because of the Internet, that is no longer the case.” Access is truly global and truly open, but the danger, he added,”is from those who will shut that down.”

The conference is being held in conjunction Qitcom 2012, a technology exhibition and conference that features technology companies from around the world seeking business opportunities in Qatar and neighboring states.  Forbes lists Qatar as the world’s richest country while the CIA World Fact book estimates Qatar’s per capita GDP at $102,700.

While Internet safety advocates and tech professionals were meeting at the FOSI and Qitcom events in one part of the city, eight heads of state from the Arab region, government ministers and Arab tech industry leaders were participating in the Connect Arab Summit to talk about expanding technology opportunities in the region.

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