23 October 2014
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Woman fails to block probate in bid to get back $762k

Straits Times
21 Oct 2014
K.C. Vijayan

A WOMAN who tried to block a probate grant in a bid to claw back an alleged $762,000 investment has been rebutted by the High Court in the first known case of its kind here.

Ms Nie Jianmin said that acting on her husband's advice, she lent the money to banker and fund manager Tan See Wee last December. However, Mr Tan died aged 47 in March, having named his wife Grace Khor in his will as the sole executor and trustee of his estate.

Eight days later, Ms Nie lodged a caveat against the grant of probate to Ms Khor. Ms Nie claimed she lent the deceased the money on her husband's assurance that he would repay it.

Ms Khor countered that the money was not a loan but an investment by Ms Nie's husband Tan Chau Chuang in a project involving Tri Viet Media Corporation, a Vietnamese media firm.

She applied for the caveat to be removed to enable the court to grant the probate.

It is understood that the court's go-ahead for the probate would enable Ms Khor to determine the extent of her husband's estate - including the involvement in Vietnam.

Her lawyer, Ling Tien Wah, argued that the court is not empowered to recognise or order Ms Nie's debt to be settled from the estate when probate had yet to be granted.

Ms Nie, defended by lawyer Francis Goh, countered that all she wanted was her money back and she had no issues with Ms Khor's appointment as executor.

But in the first such reported case in Singapore, the High Court made clear it had no powers to recognise her alleged debt claim - or order the sum to be repaid from the deceased's estate under the Probate and Administration Act.

Justice Tan Siong Thye, in judgment grounds released last week, said the relevant clause for a valid caveat can be invoked only if the claimant is a beneficiary or challenges a person's right to be an executor under the will.

Citing cases from England, Australia and Hong Kong, he held that loans or investments do not give rise to caveat interests under probate laws. "In fact, creditors who have lodged caveats have been criticised as abusing the caveat process. I agree."

Ms Nie has a right to bring a loan claim against the estate but, he said, based on evidence before the court, it was "more likely" that the $762,000 was an investment rather than a loan".

The judge refused her application for the money to be returned.

Lawyers say the judgment is a landmark because the court explained the circumstances in which a person can lodge a caveat against the grant of probate.

vijayan@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

To view the judgment, click <here>.

Cautious welcome for animal protection Bill

Straits Times
15 Oct 2014
David Ee

Welfare groups, pet owners worried about enforcement

ANIMAL welfare groups and pet owners have cautiously welcomed the tougher animal protection Bill introduced in Parliament last Tuesday.

But they warned that while the long-awaited move was historic, it remains to be seen whether the proposed law will be effectively implemented and enforced.

The Bill requires pet owners to provide reasonable care for animals under their charge. Those who neglect their pets will, for the first time, face a fine and/or a jail term.

Under the proposed amendments to the Animals and Birds Act, penalties for animal abuse will be increased, especially for repeat offenders and animal-related businesses. Staff working with animals in relevant businesses will be required to be trained in animal care and handling.

The Bill will also let the authorities adopt a code that sets new standards on animal welfare.

Ang Mo Kio GRC MP Yeo Guat Kwang, who chairs the Animal Welfare Legislative Review Committee (AWLRC) driving the Bill, said the recommendations came from the ground, through the various stakeholder groups represented in the committee and from public consultations.

Voicing her worry, dog owner Gail Sethi, 50, said: "You can have all the laws in the world, but no enforcement."

Ms Verou Lau, vice-president of the Cat Welfare Society, hailed the Bill as historic, but said her biggest concern, which is shared by other animal welfare activists, is whether the enhanced law will be enforced.

The last major review of animal welfare legislation was in 2002. Cases of animal abuse handled by the Agri-Food and Veterinary Authority grew from 377 in 2008 to 484 in 2012, according to AWLRC's report last year. Cases reported to the Society for the Prevention of Cruelty to Animals rose from 870 in 2007 to 1,027 in 2011.

However, just 13 cases were prosecuted during this time, partly due to difficulties in gathering evidence. This challenge was acknowledged by the review committee, made up of MPs, animal welfare activists and industry representatives.

Mr Ricky Yeo, president of Action for Singapore Dogs, expects "a long road ahead" in changing mindsets.

"The way I see it, it is still very business-oriented, where pets are still part of the commercial landscape. The balance is still very much skewed towards pets being a commodity, rather than a marginalised group that needs protection," he said.

He also called for the new laws to be enforced "with a strong moral conscience rather than just from a legal perspective".

Mr Marcus Khoo, 40, executive director of pet grooming and boarding services firm Petopia, also raised a practical point. He noted that ensuring that staff are trained would reduce the risk of negligence, but the industry finds it hard to get qualified workers.

In a statement last Tuesday, Mr Yeo said the road to raising animal welfare standards is certainly not over. "I hope that this Bill will be an important first step in strengthening animal welfare in Singapore and making it a shared responsibility by all stakeholders," he said.

MP Gan Thiam Poh (Pasir Ris-Punggol GRC), a member of the committee, told The Straits Times he expects the question of enforcement to be "debated in detail" in Parliament during the Bill's second reading on Nov 3.

"Of course, we want to make (the laws) practical and enforceable. There's no point having a law we can't enforce," he said. But he cautioned that change cannot be expected "overnight".

davidee@sph.com.sg


Background Story

Stiffer penalties

AMENDMENTS to the Animals and Birds Act, to strengthen the protection of animals, were introduced in Parliament last Tuesday. The Bill, which included new and harsher penalties, will be debated in Parliament on Nov 3. Among the amendments:

  • For the first time, pet owners who do not take adequate care of their pets will be slapped with fines of up to $20,000 and/or a two-year jail term.
  • Animal abusers will face fines of up to $30,000 and/or a three-year jail term, up from fines of up to $10,000 and/or a one-year jail term.
  • Animal-related businesses that contravene the Act face fines of up to $100,000 and/ or a three-year jail term, up from up to $10,000 in fines and/or a one-year jail term.

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Anti-human trafficking Bill tabled

Straits Times
08 Oct 2014
Charissa Yong & Walter Sim

A PROPOSED law to prevent human trafficking in Singapore was introduced in Parliament yesterday, one of 10 Bills that was put before the House.

The Prevention of Human Trafficking Bill formally defines human trafficking, empowers specialist officers to investigate suspected traffickers, and sets out harsh penalties for those found guilty of trafficking or abetting such activities.

Singapore does not have specific laws against human trafficking but outlaws trafficking in children, and in women for sex, through other legislation.

The human trafficking situation in Singapore has been kept under control thorough laws and active enforcement, said Mr Christopher de Souza (Holland-Bukit Timah GRC), who tabled the rare Private Member's Bill. This is a Bill proposed by MPs, in contrast to government Bills tabled by ministers.

But Singapore remains vulnerable to trafficking due to its status as a regional economic and transport hub, said Mr de Souza in a joint statement with a national anti-trafficking taskforce spearheaded by the Home Affairs and Manpower ministries.

Under the Bill, the penalty for trafficking is a jail term of up to 10 years and a maximum fine of $100,000, as well as up to six strokes of the cane. Repeat offenders face a jail term of up to 15 years and a maximum fine of $150,000 but caning of up to nine strokes will be mandatory.

People who receive payment in connection with the exploitation of a person whom they know has been trafficked will also be committing a crime.

Yesterday, an umbrella group opposed to such trafficking handed Mr de Souza a petition with 1,050 signatures from migrant workers and Singaporeans. Among other things, the Stop Trafficking SG group wants victims to be shielded from prosecution for immigration infractions. It also wants them to be given the right to continue working in Singapore while their cases are ongoing.

Another Private Member's Bill tabled yesterday proposes tougher penalties for acts of animal cruelty, and will let the authorities adopt a code that sets new standards on animal welfare. The amendment to the Animal and Birds Act requires "owners and persons in charge of animals" to take reasonable care of them, and will allow harsher penalties to be meted out to offenders, said Mr Alex Yam (Chua Chu Kang GRC), one of six MPs behind the Bill.

Mr Yeo Guat Kwang (Ang Mo Kio GRC), who chairs the committee driving the Bill, said it was important to balance the different views and interests on animal issues between animal lovers and those who may not be comfortable with animals.

charyong@sph.com.sg

waltsim@sph.com.sg

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Property agent fined S$27,000 for breaching DNC Registry rules

TODAY
21 Oct 2014
Neo Chai Chin

Huttons Asia agent sent unsolicited messages to advertise developments using a bulk SMS-broadcasting software

SINGAPORE — A property agent with Huttons Asia yesterday became the second person to be convicted for offences related to the Do Not Call (DNC) Registry under the Personal Data Protection Act (PDPA).

Kuan Chow Sheng, 32, was fined S$27,000 after he pleaded guilty to nine of 27 charges for breaching DNC Registry rules that came into effect on Jan 2.

Between February and March, Kuan sent unsolicited SMSes to advertise property developments, two in Singapore and one in London, via nine telephone numbers using a bulk SMS-broadcasting software.

The PDPA bans firms from sending marketing messages to any number listed on the DNC Registry without first getting the owner’s consent.

The Personal Data Protection Commission said it had received 235 complaints of unsolicited telemarketing messages sent by Kuan.

Court documents stated that Kuan had continued to send telemarketing “SMS blasts”, even after the Act had come into force, because he had not attended a compliance course on the Act for real estate salespeople yet.

Deputy Public Prosecutor Jane Lim argued yesterday that a low fine for Kuan would undermine the effectiveness of the DNC Registry.

The seriousness of not checking the register and not obtaining consent before sending unsolicited telemarketing messages should not be downplayed, as they infringe upon an individual’s fundamental right to privacy, she said. A deterrent sentence was needed as the real estate industry had the highest number of complaints pertaining to DNC-related offences, she added.

However, Kuan’s lawyer Lee Heng Eam appealed for a low fine, saying his client had acted in a moment of folly. He had also been tied up caring for his children and wife, who had pre-natal depression at the time, said Mr Lee.

The property agent, who is still with Huttons Asia, was a first-time offender, added the lawyer. Kuan could have been fined up to S$10,000 for each text message sent.

In August, Star Zest Home Tuition and its director Law Han Wei became the first to be convicted for violating DNC Registry rules. The tuition agency and Law were each fined S$39,000, after pleading guilty to 13 charges.

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

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Singapore Law Watch
15 Oct 2014
LexisNexis

Constitution's higher purpose: Forum

Straits Times
08 Oct 2014

ASSISTANT Professor Jaclyn Neo argued against the basic features doctrine in the Constitution ("Should constitutional principles be eternal?"; last Saturday). In essence, she contended that there are no features in the Constitution so fundamental that they cannot be altered; to declare otherwise would be undemocratic.

Let us consider an extreme hypothetical scenario, where the majority of MPs vote to remove the constitutional right to equality and enact laws oppressing minority races. Following Prof Neo's argument, this would be constitutional and legitimate, as long as at least two-thirds of MPs vote in favour of the amendment. The MPs represent the people, and this would ostensibly be in line with popular sovereignty, as Prof Neo argues.

However, the fundamental question we need to ask ourselves is this: Is the Constitution merely a set of laws that can be changed without restraint, albeit after meeting more stringent amendment requirements? Or is there a higher purpose it seeks to achieve, such as limiting the Government's power and protecting minority rights?

I would argue that it is the latter. The Constitution's basic features are tied to its core function and inherent nature as a power-limiting instrument. Hence, the concern of making gods of those who wrote the Constitution is misplaced.

Prof Neo further argues that the basic features doctrine endows judges with the power to determine what in the Constitution cannot be altered, possibly elevating them to the "status of demigods".

Indeed, judges interpret the Constitution and determine the existence and contents of its basic features. However, this is but a consequence of the separation of powers and how our government institutions are structured, rather than any elevation of status.

In fact, it is in recognition of the fact that we are not demigods - or "angels", as American political theorist James Madison wrote in the seminal Federalist No. 51 - that we need a Constitution and the separation of powers in the first place. Checks and balances are needed to prevent the abuse of power.

The basic features doctrine certainly entrenches these goals of the Constitution.

Dierdre Grace Morgan (Ms)

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NSP appeals against permit refusal for party paper

Straits Times
21 Oct 2014
Nur Asyiqin Mohamad Salleh

THE National Solidarity Party (NSP) has appealed to the President against the Ministry of Communications and Information's (MCI) refusal to renew the permit of its party paper until it gives the salary details of its central executive committee members - a requirement it had previously complied with.

The NSP said yesterday that some of its members have chosen not to disclose the information for "privacy and personal confidentiality reasons".

The Registrar of Newspapers told The Straits Times it was the first time NSP had failed to do so in the renewal form. "The form is also used by other political parties when applying for a permit for their party newsletters. They have also, like the previous CEC of the NSP, not had problems complying with this requirement."

The NSP had applied to the Media Development Authority (MDA), which MCI oversees, to renew the permit for North Star News on June 13 this year.

Last night, it posted on its website the eight-page letter of appeal to the President, plus e-mail correspondence between the party and MDA.

In an Oct 3 e-mail, the MDA said the salary details were necessary to confirm the applicants are "financially capable of taking responsibility for what is published in the newsletter".

But, NSP secretary-general Jeannette Chong-Aruldoss wrote in the appeal: "Prima facie, this is a discrimination against individuals who are office-bearers of a political association. The Registrar of Newspapers is singling out and subjecting such individuals to greater burdens."

She also said, among other things, that there is no clear justification in the Newspaper and Printing Presses Act for requiring all the CEC members' salary information.

This being so, she wrote, the Registrar of Newspapers is acting out of line by insisting on the information as a pre-condition for getting the permit.

The fact that past CEC members gave the information cannot bind current CEC members to do the same now or in the future, she added.

asyiqins@sph.com.sg

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$12m suits over Madoff investments start today

Straits Times
14 Oct 2014
K.C. Vijayan

High Court to decide if StanChart is liable for losses from Ponzi fraud

TWO suits over whether a bank can be blamed for Madoff-linked investments that flopped may well be settled in a mammoth High Court case due to start today.

At issue is whether any due diligence would have uncovered Bernie Madoff's Ponzi fraud despite all the checks that operated at the time, or whether there were any tell-tale signs that should have been picked up.

Madoff was a well-respected former Nasdaq chairman whose scam fooled US regulators, audits and banks. The New Yorker was jailed in 2009 for the multibillion-dollar fraud he operated for decades, using money from new investors to pay off the old.

The consolidated High Court hearing before Justice Woo Bih Li, scheduled for 53 days, pitches two groups of Dubai-based investors against Standard Chartered Bank for more than $12 million in losses which had been invested through a US-based "feeder" fund in Madoff's firm.

They claim, in two separate suits, that they were misled by a fund manager from then American Express Bank based in Singapore into investing in US-based Fairfield Sentry. This was a feeder fund incorporated in the British Virgin Islands which, in turn, invested in Bernard L. Madoff Investment Securities.

Fairfield Sentry parked its investments almost exclusively with the Madoff firm and has claimed it was the largest victim of the Madoff fraud.

StanChart is facing the suits as it acquired American Express Bank in 2008. Defended by Rajah & Tann lawyers led by Mr Patrick Ang and Ms Disa Sim, the bank is denying the claims, arguing that the plaintiffs were experienced investors who went in with their eyes wide open.

The two groups of plaintiffs, through lawyer Niru Pillai of Global Law Alliance, filed two sets of High Court claims in 2011, seeking damages and claiming breaches of contract and duty of care, and negligence.

One group claimed they relied on the relationship manager then to advise on their portfolios, which, by October 2008, had grown to more than US$5.3 million (about S$6.8 million), while a second group, comprising 14 individual residents of Dubai and two investment holding companies principally active in the emirate, is claiming for about US$4.75 million in losses.

Both groups initially sued for the losses in a New York court, but the case was stayed on condition that StanChart accept that the case be shifted to Singapore.

StanChart, in defence documents filed, said the clients were fully aware of the bank's conditions in documents they signed.

Among other things, the lender said, the documents made clear the bank had no duty to make or give advice and if any suggestions are made, the bank could not be held responsible.

The plaintiffs allege the bank shut their eyes to obvious risks and failed to conduct due diligence that would have exposed the unsafe Fairfield investments.

Several of the Dubai-based plaintiffs have flown in for the case, the first Madoff-linked hearing to reach the courts here.

It is understood that three other Madoff-linked cases involving other parties have been resolved.

vijayan@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Court denies woman permission to divorce

Straits Times
08 Oct 2014
K.C. Vijayan

Judge rules that she has insufficient grounds to do so before 3-year mark

A HIGH Court judge has refused a woman's bid to file for divorce before completing the mandatory three-year minimum period of marriage, saying it is not an arrangement people "can sign in and out as they fancy".

Justice Choo Han Teck, who overruled a district court's decision to allow 25-year-old Kyna Tan's request, said he was not convinced she had sufficient grounds for divorce. Madam Tan, who got married in 2012, had sought the court's permission to file for divorce on grounds of "exceptional hardship", as provided under the Women's Charter.

Her husband, Mr Terence Chan, 26, had opposed the move. The couple have no children but were seeing each other for seven years before getting married.

To support her case, Madam Tan submitted a psychiatrist's report that said she was suffering from "major depressive disorder" and cited her husband's physical and verbal aggression as the main cause.

She also produced a police report regarding two incidents in the past year where she alleged that her spouse punched her feet and face.

The judge said the account of the incidents was disputed and ruled that it should be considered at a full trial.

But the judge ruled that even if Madam Tan's version of the alleged assaults is accepted, it is not enough to justify the court's assent for her to file for divorce before the three-year wait is up.

"The statutory moratorium is to impress upon married couples that marriage is not an event one can sign in and out as they fancy," said Justice Choo in judgment grounds released yesterday.

He said Madam Tan could have chosen other options in cases of abuse, such as seeking a personal protection order or leaving the husband, as she had done.

"The moratorium is intended to hold out the hope of reconciliation, and who is to say that even in extreme cases of abuse, the abuser may not see the error of his or her ways and reconcile with the other?" the judge said.

Madam Tan was represented by lawyer Ng Pui Khim while lawyer Judy Ang defended Mr Chan.

Lawyers The Straits Times spoke to said the case reaffirmed the "high bar" the courts set before allowing permission for a disaffected spouse to file for divorce within three years of marriage.

In 2006, a woman was allowed a similar application before the three-year period was up, on grounds of exceptional depravity on the part of her husband.

"Having extramarital affairs with one or two women is not exceptional nor particularly depraved. Being involved with 16 different women in the space of two years makes the case exceptional," said District Judge Regina Ow-Chang regarding the case.

She added that the woman's husband had also filmed his sexual exploits.

vijayan@sph.com.sg

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To view the judgment, click <here>.

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Singapore Law Watch
20 Oct 2014

Misperception of overcharging by legal profession: Forum

Straits Times
14 Oct 2014

THE impression created by the letters ("Legal profession's unregulated pricing structure" by Mr Philip Williams, last Saturday; and "Medical, legal professions need to clear the air" by Dr Jeremy Lim Fung Yen, Oct 3) is that lawyers set their fees freely and arbitrarily. The implicit suggestion is that overcharging is rampant.

The issues relating to the Singapore Medical Council's (SMC) run-in with Dr Susan Lim and the spillover cannot be taken out of context. The case was tried and fought by very senior lawyers who, arguably, have a reputation of being near the pinnacle of the profession.

To equate that with the fees the legal profession, on average and as a whole, charges is a mistake. Even if one takes an uncharitable view of that specific case, it should not lead to the conclusion that law firms generally have "arbitrary" pricing structures.

Another misconception relates to how and why the SMC's bills were sent for "independent assessment".

In Singapore, the courts do not award a winning party 100 per cent of the costs. Instead, this court-assessed amount (called taxation) ranges, on average, from 30 per cent to 60 per cent, depending on the nature of the case. A losing party is free to challenge such costs. Similarly, a winning party is entitled to seek an amount as close to 100 per cent of the legal fees expended as possible, and often instructs his lawyers to do so. The court arbitrates on what is and is not reasonable in the circumstances.

To me, the issue is not why the lawyers' fees to be paid by the losing party were taxed lower than the claimed amount. The question is how the SMC could have allowed a situation where it incurred $900,000 in legal fees for a single disciplinary case.

I am not saying the SMC was wrong, but I echo Dr Lim's call for financial prudence and an independent review.

Daniel Chia Hsiung Wen

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Tackle shortage of community lawyers from multiple fronts: Voices

TODAY
07 Oct 2014

There was some discussion of late about the need for more community lawyers in Singapore. The shortage of community lawyers in Singapore is an issue that must be addressed from multiple fronts.

It is not enough to simply boost the supply of young lawyers who practise community-related fields of law when starting out in their professional careers.

After a few years of practice, idealism will give way to cynicism, disgruntlement and fatigue if these lawyers feel exploited because they are overworked and underpaid.

Ideally, structured mentorship and career development programmes should be in place, along with access to appropriate coping mechanisms to help them deal with the emotional toil associated with the nature of their caseload.

Larger law firms could perhaps also be encouraged to contribute their lawyers’ time to community-based pro bono programmes, perhaps through tax incentives to offset the loss of revenue from doing such pro bono work.

If we do not tackle the real issue of shortage of community lawyers in our country, it is unlikely the problem could be alleviated in the long term.

While I do not believe that lawyers holding degrees from foreign universities are the answer, we can certainly help those returning with law degrees from foreign universities with securing training contracts upon graduation.

As the same time, we should be mindful of a potential “glut”, as cautioned by Law and Foreign Affairs Minister K Shanmugam recently.

Li Dan Yue

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

Stamp duty computation ensures fair tax is paid: Forum

Straits Times
20 Oct 2014

WE THANK Mr Aaron Chia Chun Sian for giving us the opportunity to clarify how stamp duty is computed ("Fairer way to gauge stamp duty"; last Tuesday).

Stamp duty is charged on either the purchase price or the market value of the property, whichever is the higher amount.

This applies to all property types and acts as a necessary safeguard against underpayment of stamp duty or tax avoidance, whereby the buyer and seller agree on a purchase price lower than the market value to lower the stamp duty liability.

If the duty is computed solely on the purchase price, it may lead to a situation where some buyers will unfairly benefit from having to pay a lower duty compared with other buyers purchasing properties with the same market value.

An HDB resale flat buyer would typically request a valuation of the flat to support his application for mortgage financing or the use of CPF funds, and a professional valuer's assessment would take into account market conditions.

Hence, it would be appropriate to consider the valuation provided by the valuer for the purpose of computing stamp duty, even in cases where the price paid is lower than the value determined.

Kelly Wee (Ms)

Director (Corporate Communications)

Inland Revenue Authority of Singapore

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Make early divorce easier in abuse cases: Forum

Straits Times
14 Oct 2014

WHILE I understand the need to establish that marriage is not child's play, I was deeply concerned by the basis on which a court turned down a woman's bid to file for divorce before completing the mandatory three-year minimum period of marriage ("Court denies woman permission to divorce"; last Wednesday).

The three-year requirement aims to ensure the couple have the opportunity to work out issues and reconcile.

Yet, when the basis for divorce is so serious as to amount to extreme mental distress and/or physical abuse, should we not take this into consideration to protect the interests of those involved?

Admittedly, there is a possibility that the abuser may mend his ways and reconcile with his partner. However, is it realistic to expect a victim who has suffered grievous hurt to be able to reconcile with the abuser?

The article also cited a case in 2006, in which a woman was allowed a similar application before the three-year period was up, on the grounds of exceptional depravity on the part of her husband.

The judge in that case said "having extramarital affairs with one or two women is not exceptional nor particularly depraved. Being involved with 16 different women in the space of two years makes the case exceptional".

Is the law implying that having one or two extramarital affairs is a typical state of affairs?

Our Government has taken a strong stand on preserving family values and the sanctity of marriage, as seen in the ban on the Ashley Madison website, which promotes extramarital affairs.

In this vein, may we not come to a consensus that extramarital affairs, regardless of their number, are inherently wrong and should be a good enough basis for an early divorce?

While the law's focus on promoting reconciliation is well-intentioned, we must be careful not to subject victims of abuse to continued and unnecessary suffering.

If we are to see a reverse in the downward trend in marriage rates, perhaps a closer look at the protection of individuals and the sanctity of marriage can be the first step forward.

Deborah Loh Yen Ping (Ms)

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Encourage pro bono legal work in SMC cases: Forum

Straits Times
07 Oct 2014

IT SEEMS that the Singapore Medical Council (SMC), a professional body under the Ministry Of Health, is paying private lawyers whatever fees they ask for without much scrutiny ("Overcharging: Medical, legal professions need to clear the air" by Dr Jeremy Lim Fung Yen; last Friday).

While trying to safeguard the public from errant doctors, it would appear that the SMC itself has not been a proper steward of monies placed in its trust.

I understand that legal fees incurred by a doctor in his own defence are not recoverable, even if he is cleared of wrongdoing.

It is because of these astronomical legal fees that some doctors would rather admit guilt and face a short suspension than try to clear their names - and end up with a bill that might put them out of business.

On the flip side, I have heard of cases with no medical grounds being frivolously raised to the SMC. Complainants need to pay only a nominal fee to start the process, but if the complaint is found to have no grounds, they are not made to foot the legal costs.

It is heartening to note that the SMC has put in some effort to reform aspects of its processes. However, the problem of legal fees was not one of them.

Perhaps it is time the Health and Law ministries work together to address this, given that litigation fees can become a major cause of health-care cost increases, as seen in the United States.

Perhaps some pro bono work might be in order. Young lawyers can get the opportunity to be exposed to the intricacies of medical law, while the SMC, a non-profit body, can benefit from a cost-management perspective.

A larger pool of lawyers familiar with medical law is also to our benefit as a nation.

Peter Chen

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Court throws out condo parking case

Straits Times
18 Oct 2014
Joyce Lim

Such relatively minor disputes have other means of recourse, says judge

A CONDOMINIUM resident who complained that a neighbour had kicked him in the shins repeatedly must have been as "meek as a lamb", a judge said, as he never made a sound during his ordeal.

District Judge Lim Keng Yeow ended a long-running dispute over parking spaces, by throwing out a case brought by Mr Jew John Gomez, 51.

He acquitted and discharged 49-year-old Goh Siew Khoon, who was accused of shoving and kicking Mr Gomez in the basement carpark of The Esparis condo in Pasir Ris in March last year.

The district judge found the complainant's evidence "peculiar". In written judgment grounds, the judge said Mr Gomez's version of events in court differed from what he had told police, such as which leg he was kicked in and when.

The judge also said that such "relatively minor disputes" have other means of recourse, pointing out that "seeking criminal conviction as a means of resolving minor disputes is rarely necessary".

No further action was taken after Mr Gomez made a police report on the night in question, but the engineer with Hewlett-Packard decided to hire a lawyer to prosecute on his own a year later.

During a four-day trial in August and September, Mr Goh, a regional manager with an American firm, was represented by lawyer Chia Boon Teck, who said his client was framed by Mr Gomez after he had unintentionally occupied the latter's favourite parking spot. Mr Goh, who has a Land Rover, a trailer and five motorbikes, moved into The Esparis in late 2012.

The lawyer accused Mr Gomez of a "harassment campaign" that saw him instruct condo security officers to repeatedly paste warnings on Mr Goh's car for not displaying his carpark transponder.

Mr Chia also said a Land Transport Authority officer showed up at his client's door, "much to his embarrassment", after Mr Gomez apparently complained that two of Mr Goh's motorbikes were stolen as they had no licence plates.

The lawyer added that it would not have been physically possible for Mr Goh to "kick both his (Mr Gomez's) shins three to four times while following him from behind".

The judge agreed and expressed his surprise at Mr Gomez's account.

"One would have expected him to shout at Mr Goh, protest at his actions or warn against continuing his kicking, or call for help from the security guards," the judge wrote.

"Yet Mr Gomez's version suggested that there was absolute silence between them as he received the repeated kicks and bore the resulting pain, apparently meek as a lamb."

Mr Chia failed in an application to the courts to seek costs and compensation from Mr Gomez.

joycel@sph.com.sg

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Constitution no guarantee of peace, prosperity and progress: Forum

Straits Times
14 Oct 2014

I READ with interest Ms Dierdre Grace Morgan's letters ("Constitution should reflect will of the people", Sept 23; and "Constitution's higher purpose"; last Wednesday).

Her arguments, as well as those of Assistant Professor Jaclyn Neo ("Should constitutional principles be eternal?"; Oct 4), are well-founded and deserve greater reflection.

However, the Constitution should not be viewed merely through a Constitution-centric lens, where debate centres on the purpose and meaning behind the Constitution per se. Rather, we should place the debate in the wider national context and what it means for our nation-state.

It bears no reminder that the presence of a written Constitution is no guarantee of peace, happiness, prosperity and progress of a state.

For example, some nations guarantee a constitutional right to property, but still face low home ownership rates because of a lack of affordable housing.

Singapore, despite recent increases in housing prices, has a high home ownership rate despite its lack of a constitutional right to property.

Also, many nations have written Constitutions but are still mired in civil wars because the people believe in settling their differences through the law of force rather than the force of law.

Some states experience repeated coups d'etat because of a lack of political consensus among the political actors, who resort to extra-constitutional measures to achieve what they want.

Essentially, we may have lengthy debates about the finer details of our Constitution, but we must not lose sight of the bigger picture.

Extra-constitutional forces such as societal acceptance of the rule of law and political consensus, and trust among political actors to tackle hard and crucial national issues together are equally important as - if not more important than - having a written Constitution with a clear purpose.

After all, a Constitution is just like a blueprint for the national machine. We can have the best scheme of interlocking gears but it will still break down and not function well if we lack the lubricants of adherence to the rule of law, trust and political consensus.

Ong Kah Han

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

S'pore set to be 'top centre for resolving commercial disputes'

Straits Times
06 Oct 2014
K.C. Vijayan

Republic's new specialist court could steal march on London, say experts

THE planned Singapore International Commercial Court (SICC) may still be in the works, but some already see it challenging London's pre-eminence in settling commercial court disputes.

One leading British industry player said there is a strong possibility the Singapore court would steal a march on London while another suggested the English capital needs to be careful or lose out to Singapore in influence.

The specialist court to hear disputes over global business deals is slated to be set up in Singapore later this year, with a Bill due to be tabled in Parliament this week to pave the way.

The new court is part of a wider plan to position Singapore as Asia's dispute resolution hub, which includes the Singapore International Arbitration Centre and a new Singapore International Mediation Centre to be added.

Britain's Law Society Gazette last week reported on Singapore's expansion in the area, with the pending SICC seen as a "credible threat" to London's commercial court pre-eminence.

It quoted Mr Tony Guise, chair of the Commercial Litigation Association, saying "there is a real danger Singapore and/or New York will steal a march" on London.

Mr Guise, who had sought views from members, added: "One member takes the view Singapore has the work now and it won't be letting go any time soon.

"With the rise of the Far East as a market, he believes Singapore will become the premier jurisdiction for dispute resolution in five to 10 years' time.

"Confidence placed in London's pre-eminence by way of dispute resolution clauses is, in his view, misplaced."

Separately, Mr Brian Lee, chairman of Britain's Institute of Barristers' Clerks, warned that "London needs to be careful" of the competition from abroad.

At the institute's annual dinner this year attended by Britain's Lord Chancellor, members of London's judiciary and the legal fraternity, Mr Lee said that the SICC was due to open this year "with judges on a £1 million salary, allegedly! Not enough to tempt our judges, I am sure".

Most major South Korean law firms now choose Singapore as the venue for their clients, instead of London or New York as they did before, he added.

Mr Lee also pointed out there were six lawyers from his chambers - 20 Essex Street - working on dispute resolution cases in Singapore the week the dinner was held - "flying the flag in legal exports" - while five years earlier, the cases would have been heard in London.

First broached by Chief Justice Sundaresh Menon in January last year, the SICC is meant to bolster Singapore's position as a dispute resolution centre.

At a China- Asean Justice Forum in Nanning, China, last month, CJ Menon said that as a key centre for the convergence of legal services in Asia, Singapore was well placed to deal with global commercial disputes.

Mr Alastair Henderson, who is managing partner for South-east Asia at leading global law firm Herbert Smith Freehills, told The Straits Times in an e-mail message that Singapore has "consistently demonstrated its determination to be a leader in the global market for dispute resolution services" and that the SICC will be a key asset boost in that direction.

vijayan@sph.com.sg


Background Story

CHALLENGE TO LONDON

One member takes the view Singapore has the work now and it won't be letting go any time soon. With the rise of the Far East as a market, he believes Singapore will become the premier jurisdiction for dispute resolution in five to 10 years' time. Confidence placed in London's pre-eminence by way of dispute resolution clauses is, in his view, misplaced.

- Mr Tony Guise, chair of the Commercial Litigation Association, who had sought the views of its members

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Suit over youth's online profile goes to trial

Straits Times
18 Oct 2014
K.C. Vijayan

Undergrad seeks damages for unflattering posting on Facebook by classmate

WAS it just a prank on Facebook or did it amount to defamation?

This is the key question in a suit filed by a James Cook University (JCU) student seeking damages from a classmate for alleged defamation.

JCU undergraduate Lee Tong Lin, 24, had last year posted on his Facebook page an unflattering profile of classmate M. Jeevithan, 25, but with a disclaimer that it was "entirely fictional" and "purely for entertainment purposes".

Mr Jeevithan decided to sue Mr Lee, initially seeking $150,000 in damages. Mr Lee then applied to the court to strike out the suit.

His lawyer, Mr Terence Seah, argued that the disclaimer served as effective "antidote" to neutralise any possible "bane" in its publication.

But in judgment grounds released last week, District Judge James Leong explained why he affirmed a deputy registrar's decision in August and ordered the case to go to trial.

He pointed out that there were disputes of fact, noting that both had different versions of how the publication came about and the circumstances that led to its removal.

"As to whether the disclaimer negates any potential defamatory meaning in the publication, that is, whether the antidote neutralised the bane... this was a matter best left for trial."

The extent to which the information had spread on Facebook was also something to be decided at trial, with help from expert evidence.

The profile was published in March last year and removed by Mr Lee three days later.

Mr Lee had argued that it was clearly an "innocent joke between students and classmates, one that (Mr Jeevithan) had participated in".

Three of his classmates provided supporting documents to say the profile was an extension of a classroom joke and discussion on criminal profiling during a forensic psychology class under their Bachelor of Science course in Psychology.

But Mr Jeevithan's lawyer, Mr Dilip Kumar, countered that his client had suffered distress and embarrassment and claimed his reputation had taken a beating.

Mr Jeevithan initially sought $150,000 in damages for defamation in a demand letter to Mr Lee, which the judge said was "clearly inflated".

But he noted that there was no sum mentioned in the actual suit filed, which meant damages were to be assessed if the defendant was liable.

The judge agreed with two past cases cited by Mr Lee that words said in jest were not defamatory. But these cases involved remarks made in a humorous article in an entertainment magazine and entertainment programme.

The issue in Mr Lee's case was more serious and not of the same category as the two cases cited, he said, pointing out that the facts and circumstances surrounding the alleged defamation in each case "had to be looked at".

The judge said "it was not possible to conclude" that Mr Jeevithan's case, "weak as it may be, was obviously unsustainable, hopeless or doomed to failure".

Mr Lee's appeal to the High Court is due later this month.

vijayan@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

'Dual-class shares' may not be apt for S'pore investors

Straits Times
13 Oct 2014
Goh Eng Yeow

Shareholders' rights could be eroded by removing one-share-one-vote rule

WHEN English football giant Manchester United ditched Singapore for a New York listing three years ago, one of the reasons given was that the listing rules here did not permit multiple classes of shares.

Man U's American owners, the Glazer family, wanted a listing to pay off part of the club's debts without yielding control. One way they could do so would be to get increased voting rights over other shareholders but this was impossible under the one-share-one-vote listing structure here.

Since its listing in New York, Man U shares have risen by as much as 40 per cent from its initial public offering (IPO) price of US$14 (S$18). This implies that despite the disproportionate rights given to certain share- holders, investors do not seem to be any worse for it.

It raises the question as to whether the Singapore Exchange missed attracting a global brand to list here because of arcane corporate governance practices.

Considerable soul-searching has also been going on in Hong Kong, which turned away Alibaba last year because the Chinese e-commerce giant had wanted a small partnership to retain control even though it holds less than 20 per cent of the shares.

Alibaba then went on to list on Wall Street, scoring a spectacular success on its debut last month when its market value surged by an eye-popping US$64 billion (S$82 billion) - the equivalent of putting together the market capitalisations of DBS Group Holdings and United Overseas Bank.

It left some wondering how many Alibabas the Hong Kong Exchange could afford to sacrifice for the sake of its one-share-one-vote principle.

The debate about allowing "dual-class" shares in Singapore is cropping up again in the light of the Government's revamp of the Companies Act to remove the one-share-one-vote restriction.

At the height of the Man U listing controversy three years ago, the SGX defended the single vote for a share principle vigorously. It said while dual-class shares offer the same economic benefits, returns and rights to dividends, they carry substantially different voting rights.

"This raises issues over entrenchment of control where multiple-vote shares are not offered to the public," it said at the time. In a takeover situation, "questions about the fair value of multiple-vote ordinary shares vis-à-vis the single-vote ordinary shares may also arise".

Will the SGX change its tune now that the Companies (Amendment) Bill has been passed in Parliament to remove the one-share-one-vote restriction for public companies?

Dual-class shares have been making a comeback in the United States, with tech giants such as Google and Facebook adopting such a structure, saying that it allows them to focus on long-term performance without having to cope with short-term mood swings by investors.

As a result, the US accounts for over half of the 500-odd companies with dual-class shares listing structure in the world, with the likes of Google and Facebook offering eye-catching returns.

However, there is a catch to this. The Economist magazine said in a report that US companies with dual-class shares generally suffered from lower returns and higher share price volatility, citing a 2012 study by the US think-tank Investor Responsibility Research Centre Institute.

There is another concern. Are Singapore investors ready for dual-class shares? Unlike their US counterparts, who would not hesitate to sue to try and enforce their rights, no similar activist shareholder culture exists here to keep management on their toes.

So long as a charismatic boss such as Alibaba founder Jack Ma is in the driver's seat, problems that surface from controlling the vote without taking equal risk on capital might be papered over. But what happens when the dual-class structure passes on to the next generation that inherits the shares?

In companies with dual-class structures, potentially lucrative takeovers will be next to impossible to conduct and poorly performing managers could prove difficult to dislodge.

Disdain for diminished control may already have been reflected in the way investors value business trusts, where hostile takeovers are difficult as trust managers cannot be removed once they control more than 25 per cent of the trust.

Data from Shareinvestor.com shows that of the 13 business trusts it tracks, 10 are trading below their IPO prices.

Dual-class shares will appear in Singapore only if investors want them. As it is, they already have plenty of choice to buy many types of investments, both here and overseas. They may not take kindly to any diminishing of their shareholders' rights.

engyeow@sph.com.sg


Background Story

In companies with dual-class structures, potentially lucrative takeovers will be next-to- impossible to conduct and poorly performing managers could prove difficult to dislodge.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Husband's drowning: Mother of four sues firms for $400k

Straits Times
06 Oct 2014
Joyce Lim

LORRY driver Jason Lim Wei Kwan had wished for a home that his family could call their own, but did not live to see it. He died in an accident three years ago.

Now his widow, Ms Samai Chatthahan, 30, a mother of four, hopes to fulfil his wish. She has sued the parties allegedly responsible for his death.

She is seeking $400,000 in damages from Trans-Island Marine and her late husband's employer, United Transware.

Mr Lim, 37, drowned in 2011 when the lorry he was in slid off a barge and sank into the sea off Pasir Panjang Terminal.

In filing the lawsuit, Ms Samai, who earns just over $1,000 as a cleaner, has had to forfeit the payout from the workmen's compensation insurance covering her husband's death.

She told The Straits Times: "The workmen's compensation payout of $140,000 will not be enough to pay for the flat that my husband had applied for before he died.

"I have four young children who are all Singapore citizens, even though I am living here with them on a long-term social visit pass. It is my priority to ensure that they have a home in Singapore.

"If I meet with any accident one day, at least my children will have a home," said Ms Samai, a Thai. They are now living with Mr Lim's mother in her Choa Chu Kang flat.

An inquiry last year into Mr Lim's death heard that the vehicle had not been secured in any way.

Trans-Island Marine director Ng Teck Hai was fined $50,000 for safety lapses after he pleaded guilty, on the firm's behalf, for failing to ensure there was no risk in how it transported the lorry from Pulau Sebarok to the Singapore mainland.

An interim judgment in the civil lawsuit was passed against Trans- Island Marine this February, after it failed to appear in court. Assessment of damages is pending.

United Transware, represented by Mr Mahendra Prasad Rai of Cooma & Rai, has filed a defence against Ms Samai's claim in the High Court. The case is at the pre-trial stage.

Ms Samai has, however, withdrawn her lawsuit against the owner of the barge, New West Coast Marine, after it was found that it was not involved in operating it.

Said Ms Samai: "My husband worked very hard to provide for the family. He would have been so happy to know that the flat he has applied for is now completed."

joycel@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Rare case involving "borrowing name" to buy property; judicial commissioner: both parties may have committed offences

Lianhe Zaobao
18 Oct 2014
Poh Lay Hoon

This article was first published on 14 October 2014 in the Singapore Mandarin broadsheet, Lianhe Zaobao.
SLW commissioned a translation to give the legal community a view of legal reports from different Singapore news outlets.


After Judicial Commissioner Edmund Leow ruled against the plaintiff, chartered accountant Tan Hui Meng, yesterday, he solemnly told the lawyers for both plaintiff and defendant that offences may have been committed in this case, and that he has instructed the High Court registrar to notify the relevant authorities.

A chartered accountant claimed to be the beneficial owner of a terrace house and sought $2.3 million in net proceeds and around $250,000 in interest from the trustee. However, he lost the suit. The High Court Judicial Commissioner noted that the plaintiff and the person who acted as the nominee to acquire the property on behalf of a foreigner may have committed offences which may be investigated by the relevant authorities.

After Judicial Commissioner Edmund Leow ruled against the plaintiff Tan Hui Meng, 48, yesterday, he solemnly told the lawyers for both plaintiff and defendant that offences may have been committed in this case, and that he has instructed the High Court registrar to notify the relevant authorities.

This was a seldom-seen legal case in which a person advised another to buy a house using a different person's name, but later transferred the property to his own name in order to get the proceeds of the property sale. The defendant in the case was Guan Aimei, 50, and the property concerned was a terrace house located at East Coast Road, which was bought for $1.55 million in March 2007.

The real owner of the terrace house was Zhan Guotuan, a China national. In September 2012, he transferred ownership of the property to his nephew, Zhan Pengxiang, who had received Singapore citizenship, for $2.3 million.

The plaintiff had claimed that though the house was registered in Guan's name, she had executed a Deed of Trust on 15 June 2007 in which she stated was only holding the property on behalf of the plaintiff. Guan had also made a Statutory Declaration on 11 June 2010 in which she stated that, as the trustee, she wanted to transfer the property to him.

Guan and her husband had come to Singapore from Putian, Fujian province, and both became Singapore citizens more than a decade ago.

She denied that the plaintiff was the beneficial owner and that she was holding on to the property as his nominee. She argued that the plaintiff was clear that he was not the owner and had no right to the proceeds of the sale of the property.

She explained that even though the terrace house was in her name, the real owner was, in fact, Zhang Guotuan, who, like her, hailed from Putian and who was a China national. As a foreigner, he could not buy landed property under the Residential Property Act, unless he received permission from the Controller of Residential Property.

Plaintiff acknowledged Zhan Guotuan was the owner

Therefore, the plaintiff had suggested that the property be registered in her name. Payment for the terrace house came from Xin An Technology Group Pte Ltd, a company set up by Zhan, and the plaintiff did not put up a cent.

Guan produced a memorandum dated May 2008 in which the plaintiff acknowledged that Zhan was the owner of the terrace house.

Sources say that Zhan and his two brothers had settled in Singapore under the immigrant investor programme. Guan had worked for their family company and the plaintiff had provided accounting services to the same.

Subsequently, Guan and her husband wanted to buy a flat at The Pinnacle@Duxton but could not do so as she had a private property registered in her name. The plaintiff then suggested that she sign the aforementioned two documents to get around the regulations.

She took his advice and the executed a Statutory Declaration with the plaintiff on 19 January 2010 in which she stated that she was a holding the property on behalf of the plaintiff and that the plaintiff had made all of the payment for the property and is the beneficial owner.

She also signed a Deed of Trust in June 2010, backdating the document three years to June 2007. However, the Deed of Trust was stamped on the date of signing. She also lodged an Instrument of Transfer with the Singapore Land Authority, which stated that she was the trustee of the house and that the plaintiff was the beneficial owner.

In 2012, Zhan Guotuan's nephew Zhan Pengxiang completed his National Service and received Singapore citizenship. Zhan Guotuan thus decided to transfer ownership of the property to the Zhan Pengxiang. The plaintiff suggested allowing Guan to act as the seller, selling the property to Zhan Pengxiang with the consent of the plaintiff in accordance with the provisions of the Deed of Trust, so as to make the transaction appear more genuine.

In August last year, a year after the transaction was concluded, the plaintiff issued a lawyer's letter in the capacity of owner of the property, to seek payment of the proceeds of the sale and two years of interest at the annual rate of 5.33%.

The Judicial Commissioner noted that based on the aforementioned documents, the plaintiff would appear to have a strong case. However, the plaintiff had explained that she was helping Zhan Guotuan own the property.

The Judicial Commissioner noted that as a Singapore citizen, the plaintiff would have had no difficulty buying the property himself without the need for a nominee. The plaintiff had claimed that he had wanted to buy another property in the East Coast area and did not want others to know that he owned the terrace house. He argued that the memorandum only showed that Zhan Guotuan wanted to buy the terrace house but did not state that he owned the house. However, the Judicial Commissioner found these arguments unconvincing.

The fact that the Deed of Trust was stamped on June 2010, the time when Guan had wanted to buy a flat, convinced the Judicial Commissioner that the Deed had indeed been backdated.

In addition, the plaintiff had claimed that Zhan Guotuan's company owed him money and wanted to repay him with the property. Zhan had stated that the house belonged to him and he did not need to borrow any money from the plaintiff.

The Judicial Commissioner said there was no reason to doubt Zhan's version of the story. Furthermore, the purchase price of the property exceeded the amount that the plaintiff had claimed was owed to him. If Zhan had indeed owed the money, then why did the plaintiff only seek repayment at this time? Thus, the Judicial Commissioner did not find the statements of the plaintiff credible.

With regard to the observation by the Judicial Commissioner that offences may have been committed, Lianhe Zaobao consulted lawyer Ng Lip Chih, who did not act for any party in this case, on what laws could have been breached. Ng noted that if a false statement was made on oath to a public servant, this would contravene Section 181 of the Criminal Code. If convicted, the offender will face a mandatory prison term of up to three years and may also be fined.

pohlh@sph.com.sg

Source: Lianhe Zaobao © Singapore Press Holdings Ltd. Permission required for reproduction.

Turning data protection compliance into opportunity

Business Times
13 Oct 2014
Lyn Boxall

DATA protection regulations are now in force in Singapore. The Do Not Call (DNC) Registry rules took effect on Jan 2, 2014. Holders of Singapore telephone numbers have been able to register and avoid receiving unwanted text, voice or fax marketing messages.

After an 18-month "sunrise" period to allow organisations to get their internal processes in order, nine personal data protection obligations and limitations took effect on July 2, 2014. Organisations must comply with them when they collect, use or disclose personal data from or about individuals, including their employees.

Boards of companies need to ensure that management implements a robust compliance framework as part of its overall risk management responsibilities. In implementing this framework where the law is clear, management should act on an understanding of what is permissible and what is not. Where the application of the law is subject to interpretation, management should proceed in a way that is consistent with the risk appetite developed by the board.

The DNC rules present a good example. They do not prevent organisations from sending marketing messages to Singapore telephone numbers in all circumstances. For instance and leaving aside the data protection rules for the moment, the DNC rules are clear that marketing messages may be sent to numbers that are not listed in the DNC Registry.

Where a number is listed in the DNC Registry, marketing messages may nevertheless be sent in the context of an on-going relationship if the purpose of the message is related to the subject of the ongoing relationship. There could be genuine debate as to whether there is an on-going relationship in any particular case and/or about whether the message has the necessary connection with that relationship. A decision consistent with the organisation's risk appetite must be made before deciding whether or not to proceed with sending the message.

Yet, it appears that some organisations in Singapore have simply tipped targeted marketing messages into the "too difficult basket" and stopped using them altogether.

Similarly, the data protection rules do not prevent organisations from continuing to use personal data for the purposes for which they were collected prior to July 2, 2014. And yet, rather than applying a risk-based approach to determine the purpose for which personal data was collected, many organisations play it safe by burdening their stakeholders and requiring them to give specific consent for the continued use of personal data.

Enhancing customer relationships

The practical outcomes currently observed suggest boards need to guide management not only to apply a risk-based approach, but also to try another perspective: stop seeing data protection merely as a legal and compliance requirement that stands in the way of doing business. Boards can, and should, communicate to management an expectation that they will implement data protection requirements in ways that find new opportunities to enhance operations and customer relationships.

One example is SingTel. It went beyond the current data protection rules to build a portal which provides customised options for its users on the type of marketing messages they want to receive. The greater granularity of options is beneficial to its customers but also provides the telco greater insights into its customers' preferences. On top of that, the widely-reported pioneering response made good marketing copy.

As I observe the implementation of data protection laws in Singapore and elsewhere, the common factor is that legal or compliance staff are expected by management to take "ownership" of the issue. This yields a necessarily conservative outcome because legal and compliance staff are tasked with minimising risk, not with making decisions that take the company's risk appetite into account. Fundamentally different outcomes would occur if the issue of data protection was "owned" by chief executives and their sales and marketing teams, with expert input by legal or compliance staff.

This turns the conversation, and therefore the outcome, on its head. It stops being "tell me what I can and cannot do" and becomes "how do we make it happen - within acceptable legal parameters? What are the risks and options for such decisions?"

This solution-led approach could creatively improve customer service and relationships in the new data protection era. It directly confronts the key operational premise: how can we do better at winning and retaining customer loyalty in this new reality? Clearly, I am not advocating non-compliance of the law. However, practical requirements can give rise to a considerable grey area, and the need to "make a judgment call". The board must guide management towards decisions based on sound risk management, not just from a minimal-risk perspective.

Data protection laws are here to stay. The response from boards and management should be to leverage these laws while complying with them.

The writer is a member of the Professional Development Committee of the Singapore Institute of Directors

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Beware toll of cross-border anti-graft laws

Business Times
06 Oct 2014
Annabelle Yip

Firms can be tripped up even by the most tenuous of associations

MORE and more Singapore corporations are expanding overseas. Coming as they do from a business environment that is acknowledged around the world to be among the least corrupt, it is imperative for them to be ever on their guard against inadvertent breaches of both local and foreign anti-bribery legislation.

The view from Singapore

Singapore's Penal Code and Prevention of Corruption Act contain a list of corruption offences. To date, most prosecutions in Singapore have been against individuals rather than corporations.

Earlier this year, in a case brought by a company against its former director for breach of his fiduciary duties, the Singapore Court of Appeal in Ho Kang Peng v Scintronix Corp Ltd (formerly TTL Holdings Ltd) noted that while a director is required by law to act in "the interests of the company", the term goes beyond just profit maximisation, and it certainly does not mean profit maximisation by any means.

The director's defence for making payments which the Court found were effectively bribes was that they were for the purpose of procuring business from a major Chinese customer and were in the interests of the company.

However, the Court stated: "In our view, no matter how profitable the yields were, the irregular acts and the deception perpetrated on the shareholders of a publicly-listed company cannot be regarded as having been in the company's interests."

The case is instructive in that the payments were made under a supposed consulting agreement between the company and a counterparty for unspecified services. This is not an uncommon means by which businesses try to shield themselves from liability for questionable payments.

Overseas liability

In some jurisdictions such as the US and UK, a Singapore company may be exposed to liability just by association, or because of a tenuous connection.

The UK's Bribery Act casts its net fairly widely. A company can be guilty of an offence if a person "associated" with it (defined broadly as someone performing services on its behalf, not just its employees, but also its agents, intermediaries, consultants, introducers and facilitators) bribes someone with the intention of securing a business advantage for the company.

A company that does not have significant UK operations or a UK-incorporated company within its group may also, nevertheless, be caught under the Bribery Act if it carries on "a business, or part of a business" in the UK.

While this has not yet been tested in the courts, a Singapore company may potentially be caught if it has a UK representative office or UK agent, or enters into transactions in the UK, even if the transaction in question is entirely unrelated to its UK business.

That said, a guidance released by the UK authorities in March 2011 suggests that merely being listed on the London Stock Exchange, or having an independent UK subsidiary, should not extend the application of the Bribery Act to the listed issuer or holding company.

Still, care should be taken if a Singapore company does business in the UK.

Singapore companies may also run afoul of the Foreign Corrupt Practices Act (FCPA) in the US even when the connection with the US is tenuous. The FCPA generally renders unlawful the making or offering directly or indirectly of anything of value to a foreign official, for the purposes of obtaining or retaining business or to secure any improper advantage.

Non-US corporations may be caught if they corruptly make use of US mail or any means or instrument of interstate commerce and do any other act in furtherance of a corrupt payment while they are in US territory.

The US authorities published a resource guide in November 2012. It states that "placing a telephone call or sending an e-mail, text message, or fax from, to, or through the United States involves interstate commerce - as does sending a wire transfer from or to a US bank or otherwise using the US banking system".

Non-US corporations may also be prosecuted if they directly, or through an agent, engage in any act in furtherance of a corrupt payment while in the US. The resource guide gives the example that "a foreign national who attends a meeting in the United States that furthers a foreign bribery scheme may be subject to prosecution, as may any co-conspirators, even if they did not themselves attend the meeting".

Mitigating circumstances

Thankfully, the situation is not as bleak as it sounds.

Under the Bribery Act, it is a defence if a corporation had in place "adequate procedures designed to prevent persons associated with" it from undertaking the prohibited conduct.

The existence of a compliance programme is also a mitigating factor in an FCPA prosecution. In 2012, US authorities declined to take action against Morgan Stanley when its former managing director breached the FCPA in China.

This was because it felt that the company had a rigorous system of internal controls (regularly updated), training of employees and monitoring of transactions to avoid corrupt payments and FCPA breaches.

In conclusion, it is in the interests of Singapore companies, at an early stage, to implement organisation-wide policies, systems and controls, and inculcate a culture among their employees, to prevent and detect corrupt activities within the organisation and among its agents and business partners.

The writer is a member of the publications committee of the Singapore Institute of Directors.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Guilt is normal for working mothers: Woman of the Year

Straits Times
18 Oct 2014
Jermyn Chow

CORPORATE lawyer Rachel Eng believes "guilt is normal" for women who choose to juggle family and career.

Yet she overcame this to successfully co-manage one of Singapore's top four law firms and bring up her three children.

Last night, the 46-year-old trailblazer was crowned Her World Woman of The Year for 2013/2014 in a ceremony at the Shangri-La Hotel - where she championed family-friendly practices and advised fellow working mothers not to be fixated on excelling at everything they do.

"In the perfect world, you want to be there to take them home from school, greet them when they come home, cook dinner for them," she said.

"But we are not in a perfect world. Guilt is normal... there is no antidote. There will be trade-offs... you accept them and make the best of the situation. Then everything will get better."

Ms Eng became the first woman to be named Managing Partner of the Year twice at the ALB South-east Asia Law Awards, in 2011 and last year.

She spoke in favour of companies that offer flexibility to parents, such as allowing them to work from home.

Ms Eng also paid tribute to her fellow partners, colleagues and family. "Some of them refused to let me quit my job. They stood by me, gave me all the help and the peace of mind to carry on and give my best."

The annual award has been given out for the last 23 years to Singaporean women who have contributed to society, projected a good image of the nation and acted as role models to others.

Her World, published by SPH Magazines, is the best-selling women's title here. Its annual Young Woman Achiever award went to photographer Sim Chi Yin, 35, who has documented the lives of migrant workers in Singapore and China.

The former SPH scholar and Beijing correspondent at The Straits Times quit the paper to freelance and has won several international photography awards.

She is the first Singaporean and Asian to join the ranks of the exclusive VII photo agency.

Ms Sim, who is based in Beijing, said the award is a nod to her decision to "cut the strings of security to do what matters to society and me".

jermync@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Custody battle: Lifetime entry ban for 2 foreigners

Straits Times
13 Oct 2014
Toh Yong Chuan

TWO foreigners who smuggled a Mongolian woman into Singapore by yacht to snatch her two-year-old son from his paternal grandparents have been banned from entering Singapore for life.

Briton Adam Christopher Whittington, 38, and Australian Todd Allan Wilson, 39, were jailed last month for their roles in helping the woman, who is locked in a bitter divorce battle with the boy's father. She cannot be named to protect her son's identity.

The Ministry of Home Affairs declared the ban orders last week in the government gazette.

Confirming the ban, an Immigration and Checkpoints Authority spokesman said: "Foreign nationals who have committed offences in Singapore may be repatriated to their home countries and barred from re-entering Singapore. Singapore's approach with regard to the removal (of) or prohibition of entry for offenders is no different from other countries'."

It is unclear if the woman was also banned as the authorities do not typically discuss these cases.

She met her husband in Singapore in 2010. They married and moved to London a year later. The boy's father cannot return to Singapore as his passport was seized after his wife alleged he raped her.

Britain's High Court ordered the boy to be returned to London under his mother's care. But instead of executing the order via court channels, the woman hired Whittington and Wilson to help her enter Singapore illegally to take the boy by force.

Whittington is the managing director of Child Abduction Recovery International, which specialises in returning children to their parents for a fee. He hired Wilson's catamaran in Langkawi, Malaysia, and the trio sailed to Raffles Marina in Singapore under the cover of darkness on Aug 19.

Whittington then took a taxi with the woman to the condominium where the boy's grandparents lived and both tried to snatch the boy. He arm-locked the grandfather and hurt the grandmother in the process.

The trio were arrested and convicted last month. The woman and Wilson were jailed for 10 weeks each and were deported last week. Whittington is still serving a 16-week jail term. The boy is with his paternal grandparents.

The authorities are studying the incident in a review to beef up Singapore's coastal security.

tohyc@sph.com.sg

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Price of condo land in acquisition case comes under debate

Straits Times
06 Oct 2014
K.C. Vijayan

At issue is the reasonable sum to be paid and fair market value

WHAT is a fair price for a slice of land in a condominium complex, used for 13 carpark spaces, an electrical substation, trees and drains, has come up for debate in a land acquisition dispute.

Residents of the high-end Thomson 800 condo opposite MacRitchie Reservoir argue that the 600.9 sq m sliver of land acquired by the Government is worth at least $5.8 million. But the Collector of Land Revenue is prepared to pay only about $615,000.

This would work out to about $925.28 per sq m, or $86 per sq ft, for the affected freehold land - a land price unheard of here, residents argue.

The 10m-wide plot was acquired by the Government in 2011, as part of the construction of the North South Expressway Stage 1 from Admiralty Road to Toa Payoh Rise and redevelopment.

At issue in the case before the Appeals Board (Land Acquisition) is what makes for a reasonable sum to be paid and what makes for fair market value.

"We accept the space is lost but the issue is whether a different value can be given to a particular area, which is for a particular use when it was bought as part of a whole (in) the first place," said Thomson 800 resident Steven Sobak, 67, treasurer of the condo's management committee.

The 600.9 sq m plot below the road level adjoining Marymount Road forms 2.1 per cent of the 28,573 sq m of freehold land making up Thomson 800.

Completed in 1999, it is Hong Kong tycoon Li Ka Shing's maiden residential project in Singapore. There are a total of 390 units in a four-storey apartment block and three 20-storey blocks. Facilities include swimming pools, tennis courts and a clubhouse.

The Collector of Land Revenue awarded some $556,000, with an ex gratia payment of $58,380 as compensation in July 2012.

The Appeals Board, comprising Commissioner of Appeals Foo Tuat Yien, a senior district judge; Singapore Institute of Architects president Rita Soh, a Nominated Member of Parliament; and Associate Professor Sing Tien Foo from the department of real estate of the National University of Singapore, held hearings over three days in July.

Valuers from opposing sides had agreed that the market value, based on the residential zoning and plot ratio, was about $11 million but differed on the amount to be discounted and the adjustment factor to be applied to the market value.

Valuers for the authorities argued that the affected land is part of a road and green buffer zone, which meant its use was very limited and incapable of further residential or other redevelopment. This had to be factored to determine the market value.

The sum payable was worked out with the rent paid for a playing field in Upper Thomson Road as a benchmark.

But lawyers from Infinitus Law Corporation, representing Thomson 800 residents, questioned this. They suggested alternative ways with reference to Singapore Land Authority rates for "remnant land", or small plots of land left over after development.

Closing submissions were made last month by both parties to the Board and the outcome is pending.

vijayan@sph.com.sg

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More time to determine widow's mental state

Straits Times
18 Oct 2014
Carolyn Khew

Court hearing moved to Nov 14 as medical expert is still in the process of gauging it

A HEARING yesterday to decide whether a wealthy widow has the mental capacity to revoke the Lasting Power of Attorney (LPA) she granted Chinese national Yang Yin has been rescheduled to next month.

With the legal document, Mr Yang, 40, a tour guide who claims to be a businessman here, can make legal decisions related to 87-year-old Madam Chung Khin Chun's welfare and finances, including what to do with her $40 million fortune.

The Family Court hearing was rescheduled to Nov 14 as the medical expert is still in the process of determining Madam Chung's mental state, said lawyers Peter Doraisamy and Andrew Lee yesterday. They are working for Madam Chung's niece, travel agency owner Hedy Mok, 60, who has separately applied for her aunt's LPA to be revoked, among other things.

Madam Chung, a retired physiotherapist, was examined by an Institute of Mental Health medical expert on Wednesday. She is trying to revoke the LPA she handed to Mr Yang two years ago.

In the meantime, Mr Yang's legal powers under the LPA have been suspended, and Madam Mok is temporarily in charge of making legal decisions on her aunt's behalf, although she must keep the Office of the Public Guardian informed.

Mr Yang is being investigated by the police for suspected criminal breach of trust. He is also being investigated by the Immigration and Checkpoints Authority and Manpower Ministry on how he had obtained his permanent residency and employment pass here, among other things.

kcarolyn@sph.com.sg

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No court order on access to teen: Judge

Straits Times
11 Oct 2014
K.C. Vijayan

Child, 14, in divorce case old enough to decide if she wants to see father

A COURT has declined to order that a father be given access to his 14-year-old daughter, ruling that she was old enough to decide if she wanted to see her dad.

Her father, 45, an economics professor, had split with her university don mother, 42, and the teen had refused to see him for more than two years.

The couple, both working at the same university, married in China in 1993 and obtained an interim divorce judgment last year, pending a settlement of ancillary matters, including child access.

The man is a Canadian citizen and his former wife has New Zealand nationality. Both live in Singapore.

The man's lawyer, Jinny Tan, claimed that the former wife had denied him access to his daughter, while the former wife's lawyer, Carrie Gill, denied this and countered that the teen did not want to see him.

Ms Gill argued that access should be arranged between father and daughter by themselves, as she is a teen now, and should not require a court access order.

Justice Choo Han Teck, in judgment grounds released earlier this week, agreed and refrained from making a court access order. The Straits Times understands that a decision to refrain from making a court order on access is rare.

The couple had joint matrimonial assets worth more than $5 million, including two properties here and assets abroad.

Justice Choo ruled that a 50:50 division of the couple's assets would be "just and equitable", noting they had remained wedded for almost 20 years.

He made it clear there was no magic formula to compute the difference between both parties in terms of their financial and non-financial contributions to the family upkeep.

" An equal division is also probably the closest (that) the courts can give effect to the parties' declaration in their matrimonial vow of treating both of them as one," said Justice Choo, adding that the court will treat equality as justice in the absence of a better formula.

The court rejected the former wife's bid for her former husband to pay more than $700,000 in lump-sum maintenance for herself.

"Maintenance of an ex-wife supplements the division of matrimonial assets and is awarded only to even out any remaining financial inequities after division," said Justice Choo.

He noted that the wife earned more than $10,000 monthly as an assistant professor and can work for a long time.

Lawyers say the maintenance decision reflects the court's recognition of changes in societal norms, with wives usually self-supporting nowadays.

The case follows two earlier High Court decisions in April where women lost their bids to get maintenance.

Both had enjoyed financial independence and their marriages were brief, lasting between six and seven years.

One woman sought $120,000 in lump-sum maintenance while another wanted $6,500 monthly.

In the first case, the court found she had not depended on the husband during their six years of marriage and earned more than him as a regional sales manager of a multinational firm.

In the latter, Justice Belinda Ang ruled that the applicant "has to appreciate the new realities that flow from the breakdown of a marriage and should not expect to get all she asks for".

The judge also noted that she was an able and enterprising woman with "good business acumen".

vijayan@sph.com.sg


Background Story

EVEN OUT MONEY MATTERS

Maintenance of an ex-wife supplements the division of matrimonial assets and is awarded only to even out any remaining financial inequities after division.

- Justice Choo Han Teck

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To view the judgment, click <here>.

Singapore bags IP search and examine authority

Business Times
06 Oct 2014
Amit Roy Choudhury

SINGAPORE'S quest to become the intellectual property (IP) hub of Asia received a major boost when the World Intellectual Property Organization (WIPO) accorded the country an important role in the international patent search and examination process.

Under the Patent Cooperation Treaty (PCT), the recent 54th WIPO Assemblies appointed the Intellectual Property Office of Singapore (IPOS) as an International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA). The appointment is to become effective from early 2015.

IPOS, working together with the Singapore Permanent Mission in Geneva, was successful in its bid to become the first IP Office appointed out of the Asean region. It's also the fifth in Asia after China, India, Japan and South Korea.

Tan Yih San, IPOS CEO, told BizIT that PCT is an international patent filing system, administered by the UN-affiliated WIPO. The PCT system helps businesses and inventors by offering patent protection in 148 countries through a single international patent application. "The search and examination of PCT applications can only be conducted by appointed international authority known as ISAs and IPEAs. There are currently 17 offices across the world appointed to act as ISAs and IPEAs," Mr Tan said.

The international accreditation is a recognition that IPOS can now deliver services that would be recognised and endorsed internationally, specifically, within the other 147 countries.

Mr Tan noted that as an international authority, Singapore will be able to support innovative companies based here to access the regional market more effectively. In addition, this increased IP-related work in the region will strengthen Singapore's proposition as an IP hub in Asia.

"In advancing towards its vision to become an IP Hub of Asia, Singapore has rolled out many initiatives.

"In the area of patents, it has revamped its patent law from a self-assessment to a positive grant system, built national patent search and examination capability, expanded its global patent system connectivity by inking Patent Prosecution Highway (PPHs) arrangements with more IP Offices (we will have PPHs with 21 IP offices by January 2015), and enhanced the Asean Patent Examination Cooperation programme for better interoperability among the patent systems of nine Asean countries," the IPOS official notes.

Mr Tan added that currently Singaporean companies have the choice of the IP Offices in Australia, Austria, Europe, Japan or Korea to do the PCT search and examination work for them. With Singapore as an additional choice, companies will enjoy the convenience of proximity and accessibility to the IP Office for PCT filing, and search and examination procedures advice. "What most businesses would find valuable as well is the familiarity in the interaction with the IP Office - culturally and linguistically - and the comprehensive suite of IP products and services which it offers, such as IP Management, IP Legal Clinics, IP Financing and IP Valuation."

IPOS has also signed a series of bilateral agreements with the European Patent Office (EPO), the German Patent and Trade Mark Office (DPMA), and the Russian Federal Service for Intellectual Property (Rospatent) to enhance patent connectivity, on the side-lines of the 54th WIPO Assemblies.

The Patent Prosecution Highway (PPH) agreements signed with the EPO, DPMA and Rospatent will open up more growth and expansion opportunities for businesses and investors seeking to venture into Europe, Germany and Russia. The PPHs give businesses the option to accelerate their patent applications in those territories based on the search and examination results of a corresponding Singapore patent application, Mr Tan notes. As a result, businesses can expect a smoother application process, greater assurance of obtaining a patent, time efficiencies, as well as cost savings.

Cornelia Rudloff-Sch�ffer, President of DPMA, said: "IPOS is our ninth PPH partner office. We are glad that, with this agreement, we are able to give our users the possibility to accelerate examination of patent applications in one more country. Singapore is a particularly interesting country for our users since it wants to establish itself as an IP hub of Asia."

Singapore has also signed a Memorandum of Understanding with Rospatent, cementing the bilateral cooperation between Russia and Singapore. Under the MOU, key areas of cooperation include patent information exchange and the sharing of best practices in IP. The MoU with Rospatent is effective from Sept 22.

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Match-fixer's appeal: Judgment reserved

Straits Times
18 Oct 2014

THE High Court yesterday reserved judgment on the sentence to be handed down to match-fixer Eric Ding Si Yang, who is serving a three-year jail term for corruption.

Ding has appealed for a shorter term of a year's jail, while the prosecution has appealed for a heavier punishment of six years' jail and a $120,000 fine.

The 32-year-old businessman was sentenced in July by a district court for providing three Lebanese football officials with prostitutes as bribes for fixing future matches.

His appeal to the High Court against his conviction was dismissed last month.

Yesterday, Ding's lawyer, Mr Hamidul Haq, argued that the sentence was too harsh and disproportionate to the offences. He argued that no matches were fixed and there was no agreement to fix a match. Mr Haq said his client did not benefit from his actions and no harm was caused.

But Deputy Public Prosecutor (DPP) Alan Loh said such offences tarnish the country's reputation and pointed to foreign criticism that Singapore was not doing enough to combat match-fixing.

The DPP argued it was time to raise sentencing benchmarks for such offences, given changes in technology and the landscape of betting in sports.

He argued that a fine was warranted because it was the only way to deter match-fixing - a lucrative and entirely economic crime.

SELINA LUM

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New Act may make some games illegal

Straits Times
11 Oct 2014
Lester Hio

Game developers concerned about wide definition of gambling in Act

GAMERS who play Diablo III, World Of Warcraft and other popular online games might run afoul of a new anti-gambling law which was passed on Tuesday.

The Remote Gambling Act is designed to curb online gambling but lawyers say the provisions are drafted so widely they could have the unintended consequence of extending to playing video games where virtual loot can be won and later converted into real moolah.

Some local game developers are asking for greater clarity as they are afraid their creations might get them into trouble when the Act takes effect next year. Section 8 of the Act makes it an offence for anyone here to "gamble" through any unauthorised online gambling service. Offenders can be fined up to $5,000 or jailed up to six months or both.

At issue is the word "gamble" which is widely defined to include playing a game of chance for real money or money's worth, the latter encompassing virtual credits and objects.

Second Minister for Home Affairs S. Iswaran said in Parliament the Act is not intended to cover social games where players do not play for a chance to win money, either in cash or through converting in-game credits to money or real merchandise. "So games like Farmville, Candy Crush and Monopoly in their current forms would fall into this category. They're not the target."

The position on games where the virtual currency can be converted into real money within the game or sold outside the game on sites like eBay is less clear.

Veteran tech lawyer Bryan Tan said: "I'm not very comfortable with the wide definition of gambling in the Act."

Diablo III, for instance, was launched with a real money auction house where players could trade weapons and armour instantly for cash. The feature was removed in March. Whether an item sold for $2 or $250 depended on its statistics, which were randomly generated by the game. That can be considered a game of chance, Mr Tan pointed out.

"On a plain reading, it looks like such games will fall within the ambit of the Act. It will then be up to the Minister to make exemptions to these games," added the law partner at Pinsent Masons MPillay.

Local game developer Ivan Loo of Lambda Mu Games said: "The definition of 'a game of chance' in the Act is not very clear, and we are worried that the Act might outlaw us from developing games with elements of randomness in Singapore," said the start-up's chief executive.

But Mr Gilbert Leong, a partner at law firm Rodyk & Davidson, said he did not think it was the Government's intention to police all online video games. "In drafting the Act so widely, they might be keeping their options open in other ways," he said.

lesterh@sph.com.sg

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Lawyer suspended for taking loan from client

Straits Times
04 Oct 2014
K.C. Vijayan

Court of Three Judges sends clear message with five-year suspension

A LAWYER has been suspended for five years for borrowing money from a client, even though such loans are forbidden, and for failing to keep proper accounts.

Mr Christopher Yap, a lawyer of 19 years' standing, had borrowed $34,000 from a nephew whom he was legally advising while the latter was in a Jakarta jail.

The lawyer, who is in his 40s, admitted to the offences before two separate disciplinary tribunals last year and appeared before a Court of Three Judges in July.

The court, which comprised Chief Justice Sundaresh Menon and Judges of Appeal Chao Hick Tin and Andrew Phang, is the highest body for disciplining errant lawyers.

Lawyers are not allowed to borrow monies from clients unless they have been advised by the lawyer concerned to get independent legal advice on the loan.

"A client is vulnerable vis-a-vis his solicitor because the latter enjoys a position of influence over the client and the client may find it difficult to deny a loan," said Justice Chao, on behalf of the court.

Mr Yap had sought the loan from his nephew, Mr Karlson Yap, while the latter was in an Indonesian jail in 2009. The nephew agreed and lent the money through his sister.

This placed "tremendous psychological pressure on (Karlson); he would have found it difficult to say no to (Yap), who was actively working on his release", said Justice Chao.

"We think it incumbent to send a clear message to the profession that such violations are not trivial and will be dealt with accordingly," he added in judgment grounds released earlier this week.

The court noted that Mr Yap had aggravated matters by avoiding contact with his nephew or his sister to avoid payment, and repaid only $700 as of the date of the hearing.

The court also noted that he had failed to keep proper accounting records and comply with the Solicitors' Accounts Rules for more than 18 months from 2011.

Lawyer Pradeep Pillai argued for the Law Society that Mr Yap had been given several extensions to comply with the rules and his failure to do so led to the society having to intervene in his firm's accounts.

The court held that the three charges in relation to the accounts amounted to "grave misconduct" and was not a "one-off lapse".

"Blatant non-compliance (unless the non-compliance is one-off) is a serious form of misconduct, even if the lawyer had not diverted clients' money for his own use," said the court.

Mr Yap, who represented himself, was suspended for two years for the misconduct in relation to the loan and three years for failing to keep and submit proper accounting records in 2012.

The court ordered the suspensions to run consecutively.

It also made clear for the first time that errant lawyers whose offences are so grave that they justify more than a five-year suspension in total will be struck off instead.

vijayan@sph.com.sg

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SMU ranked 17th among world's top law school buildings

Straits Times
18 Oct 2014
K.C. Vijayan

THE Singapore Management University (SMU) School of Law may be just seven years old, but it has beaten its counterparts at Yale, Stanford and Harvard - when it comes to having an impressive building.

SMU was ranked No. 17, ahead of these top universities, in a list of the world's top 50 law school buildings. It was the only Asian entry.

The rankings were compiled by Best Choice Schools, an online resource based in the United States which aims to help students find the best universities in the world.

Top of the list was the law school of Durham University in England, followed by the University of Northumbria at Newcastle in England and the Thomas Jefferson School of Law in California in the US.

Said Best Choice: "These architectural giants were chosen for their ingenuity, aesthetic beauty and commitment to creating an environment that honours the history and study of law.

"Many of these buildings house some of the world's most prestigious and selective law programmes, and a number of them set a precedent for green building standards and solutions." Best Choice described SMU's Li Ka Shing Library, where its law school library is located, as "a modern masterpiece of glass and greenery".

SMU's Kwa Geok Choo Law Library, due to be completed in 2017, will be a "stunning accompaniment to a campus that stands as a bastion of modern architecture", it added.

SMU law school dean Yeo Tiong Min said the Kwa Geok Choo Law Library, a key feature of the new School of Law being built, "will take on a distinct architectural form reminiscent of a pearl".

SMU president Arnoud De Meyer said yesterday: "The SMU campus offers an open environment in the heart of Singapore. I am delighted that our efforts are being recognised."

vijayan@sph.com.sg

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Proposed Reit rule changes timely but can be better

Straits Times
11 Oct 2014
Grace Leong

SINGAPORE is one of Asia's largest real estate investment trust (Reit) markets, with a total market value above $61 billion. Given that, observers say central bank proposals to strengthen rules governing Reits and Reit managers are timely moves to boost transparency and better entrench unit-holders' interests.

But some observers point to areas that could be improved.

The Monetary Authority of Singapore (MAS) has proposed to impose a statutory duty on the Reit manager to prioritise unit- holders' interests over those of the manager and its directors, if a conflict of interest occurs. While that should enhance governance, corporate lawyer Robson Lee of Shook Lin & Bok asked why it is necessary to impose a statutory duty only if there is a conflict of interest, as that could "dilute" its effect. "By including that condition, you are creating a legal obstacle for minority unit-holders, by making them prove there was a conflict of interest."

To ensure accountability of the Reit manager, MAS proposed they submit themselves for reappointment at regular intervals, and be subject to unit-holders' approval at a general meeting.

Mr Lee suggested there should be an independent financial adviser, appointed by the audit committee of the Reit manager, assessing the manager's performance so that unit-holders can be guided objectively.

Also, the decision to re-elect the manager should be made by minority unit-holders, while the sponsor should abstain from voting. "There's no secure tenure for the Reit manager, if their reappointment is subject to unit- holders' approval," he said.

Most observers also backed the proposal to restrict the remuneration of executive directors of the manager from being linked to Reit revenues as they may be in the sponsor's employee share option plans or get part of their compensation in the form of sponsor shares. That could remove the incentive to prioritise the sponsor's interests over unit-holders'.

Ascendas Funds Management (AFM) chief executive Tan Ser Ping noted it may be necessary to consider independent Reit legislation to govern the industry, which now accounts for about 8 per cent of total market capitalisation on the Singapore Exchange.

A-Reit and its manager AFM already practise many of the proposed governance changes, he said. AFM's board has five independent directors out of seven, including an independent chairman; and A-Reit's performance fee structure is already linked to distribution per unit, he said.

MAS proposes to calculate the performance fee by linking such fees to "an appropriate metric" - net asset value per unit or distribution per unit - taking into account the long-term interest of the Reit and its unit-holders.

Meanwhile, a proposal to remove the option for credit-rated Reits to leverage up to 60 per cent, and instead put in place a single-tier leverage limit of 45 per cent, up from the current 35 per cent, whether the Reit has a credit rating or not, would likely help the Reit's growth potential. DBS Group Research said this would allow more flexibility in acquisitions, and place S-Reits in line with regulations in Malaysia and Hong Kong.

While acknowledging that taking on development risks may lead to higher returns, DBS in a report yesterday said it remains cautious on proposals to raise the development limit to 25 per cent to enable a Reit to undertake redevelopment projects as it may imply "potentially higher earnings volatility" for a stable sector.

gleong@sph.com.sg

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Should constitutional principles be eternal?

Straits Times
04 Oct 2014
Jaclyn L. Neo

IS THERE any part of the current constitutional order that can never be changed? More specifically, can an institution entrenched in the Constitution be eternal and unalterable under any condition?

These are questions raised in the article by senior law correspondent K. C. Vijayan ("Ending elected presidency may not work"; Sept 11).

Mr Vijayan cites a Law Gazette article arguing that the basic structure doctrine has been recognised in Singapore.

Specifically, he relies on an illustrative argument from the article, stating that "it may even be the case that a constitutional amendment to abolish the elected presidency may run into basic structure objections even though it is supported by referendum".

This position will alarm politicians and hearten some constitutional lawyers. The idea that there are real limits to political power lies at the heart of Constitutionalism. After all, constitutional law serves to constrain realpolitik, with courts imposing legal constraints through judicial review. However, the basic structure doctrine goes further than that. It posits that there is a basic structure to the Constitution that constrains the legislature such that Parliament cannot - even if it abides by the amendment procedure prescribed by the Constitution itself - amend certain fundamental features or elements of the Constitution.

However, there are three problems with this basic premise.

First, even if certain unwritten principles undergird the Constitution, which form its basic structure, these can be expressly overridden by an amendment to the Constitution.

So while we should be slow to scuttle founding principles, we should never make gods out of the creators of the Constitution by making these principles eternal.

Second, the basic structure doctrine is problematic from the perspective of democratic government. It is a doctrine invented by the courts, and we quickly run up against what American constitutional scholar Alexander Bickel called "the counter-majoritarian difficulty". This posits that when judges strike down laws, they go against majority choices reflected in legislative Acts. Judicial review is commonly viewed with some circumspection because of this.

That said, it is trite that judges have a responsibility to uphold the Constitution. However, because the basic structure doctrine endows judges with the power to hold that certain features of the Constitution can never be amended, judges assume the power to perpetuate norms even in the face of democratic change.

Third, the cases relied upon by Mr Vijayan and the writers of the Law Gazette article demonstrate that unwritten principles can be used to interpret the Constitution in a certain way. This must be correct. However, the cases do not show that the principles are unalterable or that they could be used to strike down constitutional amendments.

Beyond these problems associated generally with the proposition that there are certain basic features in the Constitution that are unalterable, there are more specific objections to the claim that the elected presidency can never be altered. Even more radical is the claim that it cannot be abolished even if supported by a referendum.

Assuming we go along with the basic features doctrine, the proposition pertaining to the elected presidency is a serious overreach of its ambit, for three reasons.

First, even if the presidency reverts to its old ceremonial role, does it really fundamentally alter the separation of powers? The institution remains even if the president no longer has powers to check Parliament's powers. It may be that if we abolished the presidency entirely, a fundamental principle would have been breached, but not otherwise.

Second, while one may argue that certain basic features can never be changed - for example, that the government must always be based on the separation of powers or that the state must always be a federal state - the fact remains that these are broad and abstract principles that can be interpreted and administered in a number of ways.

The principle of separation of powers could be breached if Parliament abolished the judiciary or the legislature or the executive entirely, or fused them. However, it is not obvious at all that this principle is violated if the appointment procedure for the judiciary is changed, or if the composition of legislature is altered, or if the Cabinet size is increased.

Third, if the Constitution contains basic features, they must form part and parcel of the Constitution at least since 1965. But if that were so, did Parliament already contravene the basic features when it transformed the presidency in 1991 from a ceremonial role to an elected custodian?

So, can the elected presidency be abolished and the ceremonial presidency be reinstated? The legal answer must be "Yes". This would not fundamentally alter the separation of powers. Should there be constraints on Parliament's powers to change the Constitution?

Perhaps, and a democratic way is to subject certain amendments to a referendum. This in fact is provided for under Article 5(2A) of the Constitution, which is not yet in operation. Once the clause becomes effective, amendments to the elected presidency could be subject to a national referendum.

In conclusion, a note of circumspection. It is easy to support the basic features doctrine when we all agree on what these "features" are. But what if we don't? We should remind ourselves that the doctrine may fly in the face of popular sovereignty.

The assertion that there is an unwritten constraint against ever altering certain features must be regarded with some suspicion lest those who assume the power to determine those features end up elevating themselves, intentionally or otherwise, to the status of demigods.

The writer is an assistant professor of law at the National University of Singapore.

stopinion@sph.com.sg

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‘Robin Hood’ debt collectors face iron rods, hot water in retrieval of money

TODAY
18 Oct 2014
Amanda Lee

SINGAPORE — They have been chased off with an iron rod, had hot water flung at them and even been accused of damaging property, all in their endeavour to help those owed money claim what is theirs — for a fee.

And while they are sometimes mistaken as loansharks harassing debtors into returning monies, their clients, in fact, range from businesses seeking payment to individuals who may have been duped into making loans. They even negotiate with moneylenders on behalf of debtors.

In the wake of a video of debt collection agents creating a commotion outside an alleged debtor’s home that went viral — calling into question the methods employed by such agents — the founder of the company that employed the agents has stepped forward to shed some light on the industry.

At one time, he was an employee of a logistics company that he occasionally helped collect payments for on top of his delivery duties, but in 2004, Mr Roger Rajan, 42, started the debt recovery and collection company, JMS Rogers. “(It) struck my mind ... It’s a good business so I started working on it,” he said.

With legal costs rising over the years, his business grew steadily, Mr Roger said, adding that legal proceedings are also time-consuming. “(We) help those people who have been victimised … A lot of people cannot afford the legal cost,” he said.

Each month, his company handles about 130 cases, with the aim of settling debts within three months or reaching an agreement, such as having the debt paid in instalments.

For debts below S$3,000, clients pay fees ranging from S$250 to S$350. For sums larger than that, clients pay from S$1,350 and up. On top of that, JMS Rogers takes 20 per cent of the monies owed.

There is no licensing requirement or legislation that regulates debt collectors in Singapore, but Mr Roger said he takes care to operate within the confines of criminal law.

The company starts by sending a letter of demand to the debtor. This is followed by phone calls and if there is no response, the company’s “field agents” visit the debtor’s home or the organisation.

Mr Roger said his agents include ex-offenders and former police officers. Dressed in uniforms, they usually make visits in groups of three of four for safety. They are also trained in negotiation skills and wear spy cams to ensure the proceedings are on record.

With regard to attacks his agents may experience, Mr Roger said: “To prevent any such incidents from happening, we will give the videos or (whatever evidence) to the authorities, who will investigate the matters.”

The uniforms, he added, help distinguish them from loansharks. The agents are also trained not to be physical and to call the police should the situation turns ugly.

He described his agents as Robin Hoods. Referring to the video that went viral, Mr Roger said the debtor in question had cheated a man with Down Syndrome by introducing him to illegal moneylenders and borrowing money in his name, claiming he was setting up a business. Traumatised by being harassed by loansharks, the victim’s mother engaged JMS Rogers to help.

Mr Roger said the debtor showed his agents a letter said to be signed by the victim, stating that the debtor need not pay off the debt. However, the victim said he did not sign the letter.

In such a situation, Mr Roger said he had to advise mother and son to file a police report, as it could involve forgery.

Lawyers TODAY spoke to said such debt collection agencies are a more affordable alternative for creditors, but advised customers to be cautious.

Mr Raj Mannar from Peter Low LLC said customers should be very careful about the terms and scope of the agency’s duties.

“So bind him by contract to make sure he doesn’t do anything that could (fall far out) of the law,” he added. “That would protect the debt collector as well as the … creditor.”

Mr Sunil Sudheesan of RHTLaw Taylor Wessing noted that the law covers the more dubious aspects of debt-collection methods.

“Existing laws already cover harassment, intimidation and violence, so additional regulation might add little to the equation.”

However, Mr Josephus Tan from Fortis Law Corporation felt it was timely to look at regulations for such agencies. “I would think that it’s better to set the perimeters,” he said.

leeguiping@mediaorp.com.sg

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Medical expert to assess widow's mental state

Straits Times
11 Oct 2014
Toh Yong Chuan & Carolyn Khew

Court to decide if control of assets can be revoked based on report

THE mental state of a wealthy widow who handed control of her assets worth $40 million to a former tour guide will be assessed by an independent medical expert.

Based on the report, the court will decide whether 87-year-old Chung Khin Chun can take back control of her assets by revoking the Lasting Power of Attorney (LPA) that she gave Chinese national Yang Yin in 2012, four years after meeting him.

The decision to appoint a medical expert was made by the Family Court yesterday, at the request of the Office of the Public Guardian (OPG), after a two-hour closed door hearing.

This was disclosed to reporters by Mr Peter Doraisamy, lawyer for Madam Chung's niece, Madam Hedy Mok, after the hearing.

The OPG, which runs the LPA scheme, will try its best to have the Institute of Mental Health expert submit the assessment before the next hearing on Oct 17.

This was according to Attorney-General's Chambers deputy chief counsel Hui Choon Kuen, who represented the OPG during the hearing.

The saga began after Madam Mok found out about the 2012 LPA earlier this year. Worried that Mr Yang, 40, may have manipulated her aunt, Madam Mok took Madam Chung away from his care.

She also started a series of legal proceedings which included suing Mr Yang and his wife, Madam Weng Yandan, 34, for allegedly breaching their duties in caring for Madam Chung.

Mr Yang is also under police investigation after reports emerged on how he had boasted about his wealth two months after Madam Chung gave him the LPA.

The former tour guide, however, said that Madam Chung wanted him as a "grandson".

He moved into her $30 million Gerald Crescent bungalow in 2009, a year after acting as her personal guide on a trip to Beijing.

With the help of the widow, he set up a music and dance school and obtained an Employment Pass in 2009. He became a Singapore permanent resident in 2011. Last year, his wife and two young children moved into the bungalow. They were evicted by Madam Mok early last month.

Since then, Mr Yang has come under probe by the Immigration and Checkpoints Authority and the Ministry of Manpower.

At a press conference two weeks ago, a lawyer appointed by Madam Mok to act on behalf of her aunt announced that the widow had applied to the OPG to revoke the LPA.

The OPG then applied to the court to ask for an independent assessment of Madam Chung's mental state. Last week, the court decided to temporarily suspend Mr Yang's powers under the LPA.

tohyc@sph.com.sg

kcarolyn@sph.com.sg

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Ex-guide's power over assets suspended

Straits Times
04 Oct 2014
Carolyn Khew

New twist in case sees his wife, now back in China, being sued as well

FORMER China tour guide Yang Yin will no longer have any say over the welfare or financial assets of a wealthy widow until her mental state is determined, a court ruled yesterday.

And in a further twist, it was revealed that Mr Yang's wife is also being sued by the widow's niece, Madam Hedy Mok.

Madam Mok has sued Mr Yang for allegedly manipulating her aunt, 87-year-old Chung Khin Chun, into granting him a Lasting Power of Attorney (LPA) in 2012.

On Sept 23, a lawyer for Madam Chung announced that she had applied to revoke the LPA. The Office of the Public Guardian (OPG), which runs the LPA scheme, then went to court to request an independent medical assessment of Madam Chung.

It also applied to temporarily suspend Mr Yang's powers under the LPA, and those of Madam Mok as Madam Chung's deputy.

Yesterday, in a closed-door hearing, the Family Court decided to temporarily suspend the LPA that gave Mr Yang control of Madam Chung's assets. But it allowed Madam Mok to stay in her role for now. Madam Mok, however, must inform the OPG whenever she makes a decision on legal matters concerning her aunt.

"I am happy with this outcome as this will allow me to press on with legal proceedings meant to preserve and protect my aunt's interests and her assets," Madam Mok told The Straits Times.

Mr Yang's lawyer, Mr Joseph Liow, said his client did not object to the ruling and "supports OPG's application". The court will hear the request for a medical assessment of Madam Chung, who was diagnosed with dementia this year, in the next seven to 10 days.

The saga has generated considerable public interest since news of it broke early last month.

Mr Yang met Madam Chung in 2008 while acting as her personal tour guide during a China trip. The following year, he moved into her $30 million Gerald Crescent bungalow because she wanted him as a "grandson", he said.

In 2011, the 40-year-old became a Singapore permanent resident (PR) and, last year, his wife and two young children also moved into the bungalow.

When Madam Mok found out about the LPA, she took Madam Chung to live with her, evicted the Yang family and started a series of court proceedings, which included suing Mr Yang for allegedly breaching his legal duties.

Yesterday, Madam Mok, a 60-year-old travel agency owner, said her lawyers have applied to make his wife Weng Yandan, who has returned to China, a second defendant. They are asking to freeze her assets as well, having already done so in Mr Yang's case.

On Sept 17, Mr Yang was arrested for suspected criminal breach of trust. In addition, his PR status and employment pass are being probed by the authorities.

kcarolyn@sph.com.sg

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Ex-Airocean director's conviction set aside

Business Times
17 Oct 2014
Michelle Quah

ONG Chow Hong, one of four former directors of Airocean Group who were charged and convicted over what was then deemed a misleading statement by the company, has had his five-year conviction overturned.

Justice of Appeal Chao Hick Tin, in his oral judgment on Thursday, set aside Mr Ong's conviction on the grounds that more recent judgments involving other former Airocean directors have established that the statement was "not misleading in a material particular".

Mr Ong, then a non-executive chairman and independent director of Airocean, had been convicted for allowing the issuance of an announcement on Nov 25, 2005. The announcement had to do with the then chief executive, Thomas Tay, and omitted to state that Mr Tay had been questioned by Corrupt Practices Investigation Bureau (CPIB) officers on matters involving Airocean subsidiaries.

The announcement made it appear that the CPIB investigations concerned other companies in the industry rather than Airocean itself.

Mr Ong was charged with failing to use reasonable diligence in the discharge of his duties as a director. He said he had approved the announcement without reading it, because he had to attend a golf event and formal dinner held by Aljunied Town Council, and had relied on Airocean's lawyers to deal with the announcement.

He pleaded guilty, was fined S$4,000 in August 2009 and banned from being a director for one year. After he appealed against the ban, it was extended to two years by the appeals court in May 2010.

Other former Airocean independent directors, Peter Madhavan and Ong Seow Yong, and the company's former COO, Johnson Chong, were charged in July 2008 over the same announcement. They were all found guilty - with Mr Madhavan even being handed a jail term. Upon appeal, however, they were acquitted of all charges in July 2012.

Then-Chief Justice Chan Sek Keong had said in his appeal judgment: "There is insufficient reliable evidence to show beyond a reasonable doubt that the information was likely to materially affect the price or value of Airocean shares; and the DJ (Subordinate Courts District Judge Liew Thiam Leng) erred in holding that Airocean was reckless in not disclosing the information."

In October 2013, Mr Tay had his convictions over similar charges overturned as well.

In considering Mr Ong's petition to have his conviction set aside, Justice Chao said: "Given the fact that the petitioner's conviction arises out of the same factual matrix as (the case involving the other directors), it would be highly anomalous if the petitioner remained convicted whereas the appellants in that case were acquitted of the charges against them in relation to the making of the announcement. "If in fact the announcement and the information therein were considered not to be misleading in a material particular, I cannot imagine that anyone would be charged in relation thereto, far less the petitioner," he added.

Justice Chao noted that Mr Ong had already paid the fine of S$4,000 and served out the disqualification order - to act as a director - of 24 months. He, therefore, ordered the S$4,000 fine to refunded to Mr Ong.

michquah@sph.com.sg

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Legal profession's unregulated pricing structure: Forum

Straits Times
11 Oct 2014

IN DEFENCE of the Singapore Medical Council (SMC), I believe it was not paying private lawyers whatever fees they asked for, as it followed the standard practice of sending disputed bills for an independent assessment ("Medical, legal professions need to clear the air" by Dr Jeremy Lim Fung Yen; Oct 3).

The legal profession here has an unregulated pricing structure and clients face bills for thousands of dollars compiled, in the main, from the law firm's arbitrary calculation of hourly records, printing costs, conferencing, stationery and personal client contact.

Lawyers' rates can average $700 per hour. By comparison, most doctors appear to charge a paltry $30 to $100 for a long consultation.

Complaints to the SMC have increased over the last few years because direct legal redress is far too expensive for the majority of the population.

Even then, doctors are covered by their medical insurance brokers, whether they win or lose the case, and most private hospitals avoid vicarious liability as they hire doctors as consultants.

It is wrong to compare the quantum of litigation fees with that in the United States as the courts here do not have provision for excessive punitive damages.

I previously advocated a contingency fee system ("Case for contingency fees in litigation"; Forum Online, Feb 24), which the Law Society is considering.

Perhaps a greater allocation of younger lawyers to prepare cases pre-trial could help to limit costs and provide employment to industry entrants.

Philip Williams

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Concerns raised about inadvertent impact of anti-online gambling Bill

Straits Times
04 Oct 2014
Cheryl Faith Wee

PLAYERS and developers of social and video games could be affected by new laws that ban Internet and telephone gambling in Singapore.

The Ministry of Home Affairs will table the Remote Gambling Bill for second reading in Parliament next Tuesday but the International Social Games Association (ISGA), a global non-profit trade association, is worried that some of the Bill's definitions could prove problematic.

For instance, "money's worth" is defined as "anything recognised as equivalent to money and includes virtual credits, virtual coins, virtual tokens, virtual objects or any similar thing that is purchased within, or as part of, or in relation to, a game of chance".

Almost all social games contain an element of both chance and skill as well as in-game currency, the association said.

Some games which might be affected include the widely popular Angry Birds and FarmVille.

The association said in a statement yesterday: "The ISGA is fully supportive of the Singapore Government's efforts to prohibit illegal Internet gambling.

"However, we believe that the drafted Bill will inadvertently encompass legitimate activities and technology businesses, going far beyond the Government's concern on Internet gambling.

" In fact, it would have material negative effects on the future of Singapore's digital economy development and the video-game industry globally."

Companies cannot be assured that their games will not be classified as a form of gambling and therefore subject to criminal sanctions based on this Bill, the association added.

In response to the concerns raised, the Ministry of Home Affairs said that the views expressed by the ISGA will be addressed during the second reading of the Bill on Tuesday.

Stamford Law Corporation director Yap Wai Ming, who sits on the editorial board of the Gaming Law Review and Economics journal, said that the Bill could indeed have a negative impact on Singapore as an information technology hub as some of the definitions are too broad and might end up restricting game developers and players.

He added: "Even a simple game of Monopoly, in which you roll the dice to determine the number of spaces to move, is a game of chance because no matter how much skill you have, you cannot control the outcome."

cherylw@sph.com.sg

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Owners 'can break boardroom deadlock'

Straits Times
17 Oct 2014
Grace Leong

They can exercise management powers in some cases: High Court

THE High Court has ruled that shareholders in some cases can exercise management powers and appoint lawyers to break a deadlock in the company's board.

The ruling delivered last week stemmed from a high-profile spat between the founders of luxury watch retailer The Hour Glass.

Dr Henry Tay and former wife Jannie Chan divorced in 2010 but remain the permanent governing directors of TYC, which owns about 108 million shares, or 46 per cent, of The Hour Glass.

TYC last year sued Ms Chan for refusing to approve the payment of several expenses, including legal and accounting fees, among other things.

But Judicial Commissioner Lee Kim Shin found Ms Chan did not breach her fiduciary duties as a director when she refused to approve payments to KPMG, which had advised the couple on tax and accounting issues arising from their divorce settlement.

Ms Chan also refused to approve payment of corporate secretarial fees to Express Co Registration & Management, as well as legal fees to TSMP Law. TSMP Law was appointed by shareholders Dr Tay and his son Michael, who together have 51 per cent of voting rights in TYC Investment, the family's investment vehicle.

They had passed resolutions at an extraordinary general meeting (EGM) on Sept 4 last year, to appoint the law firm to sue Ms Chan to get her to perform her contractual obligations, including making payments to TYC's creditors.

But the judge noted that her refusal "stemmed from her honest belief that the EGM had not been validly convened, and, consequently, TSMP Law was not properly appointed".

This legal spat comes one year after the pair had settled a separate suit out of court.

Dr Tay had taken out an injunction to stop Ms Chan from making unilateral payment decisions on behalf of TYC.

Part of the settlement involved an undertaking that both parties would have to agree on a payment before TYC could act. But this "check and balance" clause led to the most recent case, with Ms Chan accused of withholding her approval for payments.

The judge found that Ms Chan had an "honest, bona fide belief that KPMG ought not to be paid because it had not discharged fully or properly its obligations under the terms of the engagement".

Ms Chan contends that KPMG should have checked with her if she was living at a condominium unit at 15 Nassim Road before rendering its opinion on the effect of the divorce settlement on her personal income tax.

This was especially important as her occupation of the unit was likely to be treated as a taxable employment benefit, valued at around $200,000, the judge said.

But the High Court held that TSMP Law was validly appointed as TYC's lawyers at the EGM and that TYC is liable to pay TSMP and Express Co.

However, the court declined to determine if the fees are "reasonable and ought to be paid by TYC", saying these were matters for the company and its directors to decide.

The judge said he was "satisfied that it was reasonably necessary for the EGM to have limited power to appoint solicitors to commence proceedings to determine the rights and obligations of the relevant parties under the Divorce Settlement Agreements so as to break the deadlock in management".

"In coming to this conclusion, I was mindful... the proceedings were commenced against a director who herself could prevent the company from suing.

"In circumstances where the board itself was incapable of making a disinterested decision, I was fortified in my view that it was reasonable for the EGM to exercise the power to do so."

Dr Tay and Ms Chan are appealing against the portions of the ruling they lost.

gleong@sph.com.sg

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To view the judgment, click <here>.

Woman jailed four years for stabbing

Straits Times
11 Oct 2014
Selina Lum

She pleaded guilty earlier to hurting female ex-lover

A 25-YEAR-OLD woman who stabbed her former girlfriend after the latter refused to get back into a relationship with her, then turned the knife on herself, was yesterday jailed for four years.

Giselle Shi Jia Wei, whose eyes were filled with tears throughout the court session, had pleaded guilty last week to attempted culpable homicide by stabbing Ms Ummul Qurratu 'Ain Abdul Rahman, 22, twice in the chest in a Geylang hotel room in July 2012. A charge of attempted suicide was also taken into consideration.

The courtroom was packed with Shi's friends and family, including her parents, who declined to comment after the verdict. The victim was not present but told the court in a statement she was "angry" and "disappointed" with her former lover.

In passing sentence, Justice Choo Han Teck said that a long jail term would not serve much public interest and that Shi's sentence should "lean towards rehabilitation".

Prosecutors had sought five years' jail for Shi, arguing that her premeditated actions had caused physical and psychological harm to the victim.

Deputy Public Prosecutor Sellakumaran pointed out that Shi had bought a knife which she kept in her bag before she went to meet her former lover. He also read out parts of the victim's statement on how the attack has impacted her.

"Even now, I am angry with Giselle and what she had done to me. I was disappointed with her. Having to go through the court trial, it was very stressful and I feel that I was the offender instead of Giselle," said Ms Qurratu 'Ain.

The victim said she now buttons her shirts to the top to hide the 21cm scar on her chest and suffers from nightmares and flashbacks.

But Shi's lawyer, Mr Daniel Atticus Xu, painted the attack as a crime of passion and contended that his client was depressed at the time.

Mr Xu produced letters from Shi's friends vouching for her character and asked for a report to determine if she was suitable for probation. He added that Shi's family has offered to pay the victim's outstanding medical bills of about $6,000.

The court had heard earlier that the pair's romantic relationship, which started in July 2011, was fraught with quarrels due to Shi's possessiveness.

Following a spat on July 14, 2012, Shi told Ms Qurratu 'Ain she wanted to end their relationship.

Three days later, the pair spent the night at a Geylang hotel where Shi tried to patch things up but to no avail. On July 22, the pair checked into the hotel again, with Shi carrying the knife in her bag.

While the victim was lying naked in bed, Shi asked to start afresh. When she rejected her, Shi stabbed her before stabbing her own chest. The victim tried repeatedly to leave the room but was foiled by Shi each time. Eventually, she escaped and sought help from a couple, who called the police.

Shi initially claimed trial to attempted murder but following representations from her lawyers, the charge was amended to a lesser one of attempted culpable homicide, which carries a maximum jail term of 15 years.

selinal@sph.com.sg

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A week's hearing break for State Courts next month

Straits Times
04 Oct 2014
K.C. Vijayan

Pilot move gives lawyers time for family, but State Courts stays open

LAWYERS appearing in the State Courts will get a one- week hearing break next month, after discussions between the Law Society and the State Courts.

Law Society president Lok Vi Ming said the pilot arrangement would allow lawyers, particularly those who practise in the State Courts, "a week in the year which they can block out their diaries for some much-needed family or personal ties away from court work".

He announced this in his address in the Law Society's recently released annual report.

The State Courts does not have a specified vacation, unlike the Supreme Court, which has two such periods in June and December.

Yesterday, a State Courts spokesman said that during the break from Nov 17 to 21, "judicial officers and staff will take time to review their work and attend training courses to deepen their knowledge and enhance their skills".

But the State Courts will not be closed, she said.

"The Criminal Mentions Courts, Small Claims Tribunals and other front-line service counters will remain in operation, and urgent and/or priority cases may still be scheduled for hearing," she added.

Lawyers said they welcomed the long-overdue move.

Senior lawyer Amolat Singh said: "The break is an excellent idea as the Government has always been stressing the need for work-life balance and people can plan for the break."

But it would have been better if the break coincided with the High Court's vacation in December, he said.

"Even if I'm free of State Courts cases for that week, I still have matters in the High Court, which means it will not be a total break," he said.

Separately, Senior Counsel Lok also said the Law Society is considering whether contingency fee arrangements should be allowed in a limited form with safeguards in place.

Contingency fees - where lawyers are paid a percentage of proceeds from successful cases - have traditionally been opposed as they are said to encourage litigation and inflate claims for damages.

But there have been calls in recent times for a review. An ad hoc committee chaired by the Law Society vice-president Thio Shen Yi proposed allowing controlled contingency fee arrangements, with the approval of the Law Society, to enable clients' access to justice.

For instance, such an arrangement could be based on damages - where the liability is clear and the sum payable to the lawyer is pegged to the sum that the court awards in damages to the aggrieved party. This could apply to personal injury claims, lawyers said.

Mr Lok said the Law Society's governing council will seek feedback from its various practice committees and members before deciding whether to take steps to implement the recommendations.

vijayan@sph.com.sg

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Law firm targets better sports governance

Straits Times
17 Oct 2014
Terence Ong

LOCAL law firm Rajah & Tann may have signed up as sponsors for next year's SEA Games in Singapore, but it has already set its eyes on the bigger picture - improving the sports administration in Singapore.

Yesterday, it was named the official legal partner of the June 5-16 regional meet during a press conference at the Straits Trading Building.

It will provide the Singapore South-east Asian Games Organising Committee (Singsoc) with legal advice and services for the staging of the Games.

While it declined to reveal the exact amount of the sponsorship, its Tier Three deal will be valued at $250,000 and above.

In addition, it will team up with Sport Singapore to conduct educational clinics for national sports associations (NSAs), to equip them with legal knowledge to avoid any complications when they either stage a competition or send their athletes for overseas sporting events.

Said Lau Kok Keng, Rajah and Tann's head of intellectual property, sports and gaming: "If NSAs are not aware of, for example, doping tests and the framework, they may have a case similar to England footballer Rio Ferdinand's in 2003 and we do not want that to happen."

Then, the defender was asked to take a drug test at his club Manchester United's training ground but left without going through with it, and was slapped with a eight-month ban after being found guilty of misconduct for his no-show.

Singsoc's chief of corporate and community outreach Toh Boon Yi was pleased to have Rajah & Tann on board for the Games.

He said: "This goes back to our criteria when selecting sponsors - creating a legacy for sporting Singapore, and this deal does just that."

terong@sph.com.sg

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Database of State Court cases to be launched next year

TODAY
10 Oct 2014
Amanda Lee

SINGAPORE — A database of the results of cases prosecuted in the State Courts — with the aim of assisting the Bench maintain consistency in sentencing — is expected to be launched next year, Chief Justice Sundaresh Menon said yesterday.

First announced at the State Courts’ workplan seminar in 2012, the database, called the Sentencing Information and Research Repository, will record all relevant details of cases, including specific circumstances, aggravating and mitigating factors, and the eventual sentence.

“Although sentencing is a matter of discretion, that discretion is never to be exercised arbitrarily,” said CJ Menon, who was speaking yesterday at the inaugural two-day Sentencing Conference held at the Supreme Court. “Broad consistency in sentencing also provides society with a clear understanding of what and how the law seeks to punish, and allows for members of society to have regard to this in arranging their own affairs and making their own choices.”

However, arriving at the correct sentence in each case is not just the courts’ role. Prosecutors owe a duty to assist the court in doing so, noted CJ Menon.

Outlining the prosecutorial role in sentencing, he added that because it acts only in the public interest, “there would generally be no need for the prosecution to adopt a strictly adverserial position”, unlike for lawyers in private lawsuits.

“Private victories tend to be measured by the size of the damages awarded. But the prosecutorial function is not calibrated by that scale,” he said.

Instead, prosecutors should not only secure convictions in a lawful and ethical manner, but secure the appropriate sentence too, he added.

CJ Menon said the prosecution has a vital role to play, for example, by identifying the relevant sentencing precedents, benchmarks and guidelines to the court.

Although the prosecution may take the position that a certain sentencing range is appropriate in the circumstances, it must present all the relevant material to enable the court to come to its conclusion on what the just sentence should be, he added. It should also inform the court of the offender’s suitability for other sentencing options that might be available.

On the courts’ part, CJ Menon said judges are accountable for their sentencing decisions and it is therefore “incumbent” on them to explain, at least in brief, the reasons that underlie their rulings.

This is especially so in criminal cases because “personal liberties are affected”, he noted. AMANDA LEE

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

Law firm helps soup kitchen source veggies

Straits Times
04 Oct 2014
Janice Tai

SOUP kitchen Willing Hearts, which feeds 4,500 needy people daily, gets to supplement its supplies with fresh vegetables from the garden next door - and it has a law firm to thank for this.

International law firm Olswang had linked it up with urban farm consultancy Edible Gardens, which went on to set up a food garden next to Willing Hearts' kitchen in Jalan Ubi in August this year.

"We wanted to go beyond offering free legal advice to explore other aspects in which we help out in, such as connecting people or organisations," said Mr Matthew Hunter, an associate with Olswang.

This was one example of how welfare groups and social enterprises can tap the networks of corporations, a support system highlighted at the first President's Challenge networking event for companies and social enterprises held yesterday.

"Corporates can share their networks with social enterprises by linking them to potential clients, investors or suppliers," said President Tony Tan Keng Yam in a speech at the event at Grand Copthorne Waterfront hotel.

Companies competent in areas such as finance, marketing and branding can also offer management advice to budding social entrepreneurs, he added.

The event was held to help corporations find out how they can support and nurture social enterprises here or create social impact through their businesses.

"The social enterprise sector in Singapore is in its nascent stage... I believe that corporations have important roles to play in an ecosystem to help nurture more impactful social enterprises," said Dr Tan.

During the event, corporations which have partnered social enterprises shared tips with their peers on how to do so. Apparel chain Uniqlo, for example, worked with the Movement for the Intellectually Disabled of Singapore and SG Enable, an agency set up by the Government to offer services for the disabled, to hire at least one youth with special needs in each of its 19 stores.

jantai@sph.com.sg

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GM jailed for conspiring to cheat firm of $4m

Straits Times
17 Oct 2014
Elena Chong

A GENERAL manager, who often gambled at a casino, came up with a ploy to get money from his company by scheming with third parties to submit fake invoices, to deceive it into paying for non-existent services.

Over around 11/2 years, Teo Beng Wah abetted three others in a conspiracy to cheat Newtech Technology (South Asia) of $4 million.

The money was not returned.

Yesterday, the 50-year-old was sentenced to jail of four years and seven months, after pleading guilty to eight of 104 charges. His alleged accomplices - Kwa Tian Hwa, 48, Ng Hai Hock, 51, and Chong Li Fong, 39 - have been charged. Their cases are in pre-trial conference stages.

Newtech, a subsidiary of Hong Kong-based Newtech Technology Holdings, provides mechanical and electrical engineering services, specialising in the design and building of data centre infrastructure.

Deputy Public Prosecutor Kevin Yong said that as the general manager, Teo could, alone, approve all purchases made by Newtech, and sign cheques for payments of up to $50,000.

The fraud came to light when the company found out during a review of its accounts in July 2011 that there were 101 invoices received from "vendors" between February 2010 and June 2011 for services that were not rendered. These invoices were accompanied by 94 false purchase orders requested and approved by Teo.

Investigation by the Commercial Affairs Department showed that Teo was a frequent gambler at the Resorts World Sentosa casino, and often borrowed chips and cash from fellow gamblers.

He devised the scheme to repay his loans and satisfy his gambling addiction. Some of Teo's accomplices would help him by giving him the money they received from Newtech and keeping a portion for themselves.

Teo, whose services were terminated in August 2011, was made a bankrupt in July 2012 for failing to settle Newtech's civil claim against him.

He could have been jailed for up to 10 years and fined on each charge.

elena@sph.com.sg

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Singapore as a commercial court hub

Straits Times
10 Oct 2014

THE judicial and legal community would be buoyed by the progress of the planned Singapore International Commercial Court, as legislative steps are taken to make SICC a division of the High Court. Infrastructure matters but also essential is the trust the court wins, given the pre-eminence of London's commercial courts. As in education or medical care, gaining hub status depends not only on the services in which a country decides to specialise but also, more importantly, on how others perceive the quality and sustainability of those services.

The Republic has much in its favour having worked over the past decade in the arbitration of disputes between parties from different jurisdictions. Further, the integrity of judges epitomises the habitual and tested practice of the rule of law here; and the legal system is not only well-developed but it also has experience in dealing with complex commercial disputes.

To build on this reputation, the country will have to be open to eminent international jurists serving on the panel of judges, as well as foreign lawyers with expertise in cross-border dispute resolution. Court-to-court arrangements will also be necessary to develop the internationality of SICC judgments - in the form of tie-ups with foreign international courts to refer appropriate proceedings to each other's jurisdiction so a question of foreign law, for example, can be determined.

Setting the stage for success as a hub goes beyond professionals in a particular field. For example, facility with English, both as the language of the law and the lingua franca of society, is not a minor advantage. In addition, the institutional infrastructure of a nation must function within an intensely international outlook. In Singapore's case, its geographical position and advantages of good connectivity could serve it well in attracting international litigants.

Global trade has grown at about 5.4 per cent a year on average over the last two decades and the Asia-Pacific has taken centre stage in the world economy. This trend is accenting the need for reliable legal hubs to cater to complicated disputes that span jurisdictions. Singapore can play a leading role here along with the best of them. To do this, it should never underestimate the competition from other major players like Geneva, Tokyo and Paris. Indeed, the success of the Dubai International Financial Centre Courts shows that even relative newcomers are trying hard to be the venue of choice for court-based commercial dispute resolution.

The new court deserves support as it can significantly boost legal services here, as Chief Justice Sundaresh Menon noted last year, and help to internationalise and export Singapore law.

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2 private Bills to be introduced in House

Straits Times
04 Oct 2014
Rachel Au-Yong

They propose changes to laws on cruelty to animals and human trafficking

BACKBENCHERS will introduce two Bills to change the laws on cruelty to animals and human trafficking when Parliament sits on Tuesday.

Since independence, there have been only three other instances when MPs put forward what is termed a Private Member's Bill, compared with the typical government Bills proposed by ministers.

Five PAP MPs will propose amendments to the law governing animal welfare. They want stiffer penalties for repeat animal abusers. The proposed amendment to the Animals and Birds Act will also let the authorities adopt codes that set standards for animal welfare in Singapore.

Ang Mo Kio GRC MP Yeo Guat Kwang, who is leading the charge against recalcitrants, said his Bill is a balanced one that takes in the concerns of all parties involved. "While there are people who abuse animals, there are also some who think their pet is more important than a neighbour," he said.

The Prevention of Human Trafficking Bill is being initiated by Holland-Bukit Timah GRC MP Christopher de Souza, who has been speaking in Parliament on the subject since 2008. He has said "a single, dedicated law to combat human trafficking will be more effective and easier to enforce".

Singapore Management University law don and former Nominated MP Eugene Tan said proposing such Bills will give "PAP MPs the chance to... show they are aligned with specific causes".

According to the Order Paper from Parliament yesterday, the House will also debate the Remote Gambling Bill. If passed in its current form, it is arguably the strictest anti-online gambling regime in the world. The authorities would, among other measures, get powers to turn off access to unauthorised remote gambling websites with the help of Internet service providers, and block payments to and from these sites.

For question time, which precedes the Bills, Tampines GRC MP Baey Yam Keng is among three MPs who have filed questions on why To Singapore, With Love, a documentary on political exiles, was given the "Not Allowed for All Ratings" classification by the Media Development Authority (MDA).

Said Mr Baey: "I'm interested in how the MDA gives a rating. I've spoken to Pin Pin and it seems like there wasn't any engagement between her and MDA. There should at least be a dialogue." Film-maker Tan Pin Pin is appealing against the MDA rating.

Two MPs have filed questions on the militant group Islamic State in Iraq and Syria (ISIS). They want to know if it poses an increased security threat to Singapore, and what diplomatic pressures can be asserted on the group.

rachelay@sph.com.sg

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Good day in court for Grandstand's master tenant

Straits Times
16 Oct 2014
K.C. Vijayan

Judge rules that its predecessor had caused damage during the handover

THE High Court yesterday ticked off the previous master tenant of the former Turf City for conspiring to cause damage during the handover to the new master tenant.

Describing the conduct of the previous operator, Singapore Agro Agricultural (SAA), as "reprehensible" and "troubling", Justice Woo Bih Li said its actions affected several sub-tenants and licensees, whose plights drew attention from the media and the Singapore Land Authority (SLA).

"(They) must have known that the systematic conduct they embarked on was causing anxiety, inconvenience and probably loss to their own sub-tenants and licensees, that is, those who were prepared to consider entering into new agreements with the plaintiffs," said Justice Woo in a judgment released yesterday.

SH Cogent Logistics and its subsidiary Cogent Land Capital, which took over Turf City, upgraded and rebranded it as The Grandstand. Cogent sued SAA in 2012, alleging it had conspired to hurt its business of sub-tenanting and licensing the units.

Its lawyers, Senior Counsel Alvin Yeo and Ms Koh Swee Yen, argued that SAA had stopped Cogent from hitting the ground running by removing electrical fittings and other items as part of reinstatement work before handing over.

Cogent also alleged that SAA had blocked existing tenants and licensees from continuing with leases under Cogent. Cogent, which became master tenant of the former Bukit Timah Turf Club site in 2012, won the SLA tender for a three-year lease with a monthly rent of nearly $1.07 million. SAA, master tenant of the 178,000 sq m area since 2001, had offered $718,888.

The Grandstand is now a popular hub with eateries, pre-schools and shops like Giant supermarket. It also houses PasarBella, the first permanent multi-vendor gourmet farmers' market here.

SAA's lawyers, Senior Counsel Andre Yeap and Mr Adrian Wong, countered, among other things, that it had removed temporary structures in line with its obligations as a master tenant and to ensure no safety issues remained once it vacated its lease.

In a reserved judgment made after a two-week hearing earlier this year, Justice Woo made it clear that he was not convinced.

He cited "unsatisfactory" evidence given by SAA witnesses to justify the reinstatement works.

SAA had argued that it carried out the works as it was a condition imposed by the Urban Redevelopment Authority for the use of the land. This required structures erected to be demolished when written permission from the URA expired.

The judge said SAA's reliance on the 2010 written permission and related documents produced in court to justify the works was "a convenient and belated excuse to mask their predominant purpose to cause damage to (Cogent)". Among other things, Justice Woo pointed to how two letters from architectural advisers to support the claim the reinstatement works were needed were "fabricated and backdated" by a former architect to help SAA.

Suggesting lessons from the case, Justice Woo said landlords such as SLA, which operate through a master tenant, should consider including "adequate rights" for themselves. These protect the interests of sub-tenants and others from the unreasonable acts of a master tenant.

They should include the right of the landlord to insist that the master tenant stop reinstatement work and seek court action to stop such work.

The judge noted that the SLA did try to help sub-tenants and licensees who wanted to continue under Cogent.

Justice Woo ordered the sums payable for loss as well as for damage caused by SAA's conspiracy to be assessed at a later date.

When contacted, an SLA spokesman said: "SLA is studying the judgment and will issue its response in due course."

vijayan@sph.com.sg

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To view the judgment, click <here>.

MAS moves to strengthen Singapore's Reit sector

Business Times
10 Oct 2014
Lee Meixian

Consultation paper seeks to improve corporate governance and align fees with unitholders' interests, among others

[Singapore] THE Monetary Authority of Singapore on Thursday issued a consultation paper to strengthen Singapore's real estate investment trust (Reit) market. Market watchers welcomed its proposals to improve the corporate governance of Reits and ensure that fees paid to Reit managers are aligned with the interests of unitholders. The move was seen as a response to long-running issues in the Reit sector.

For one thing, investors and commentators have often demanded more independence for Reits from their sponsors, which usually fully own the Reit managers. Problems with such an arrangement include what investors deem to be unfair performance fees as well as acquisition and divestment fees, especially when managers buy assets just to increase the Reit's gross revenue or net property income, because these are what their performance fees are pegged to.

But the Monetary Authority of Singapore (MAS) has now proposed to have the Reit manager prioritise investors' interests over those of the manager and its shareholders, if a conflict of interest occurs.

Currently, a Reit manager has to ensure that at least one-third of the board are independent directors. MAS now suggests two options to improve the board independence of the Reit manager.

Option one is at least half the directors must be independent if unitholders are not given the right to appoint directors of the Reit manager. However, if that right is given, then the current one-third rule would apply. Option two is a uniform requirement that the majority of the directors must be independent.

MAS will also require the Reit managers to disclose remuneration policy for directors and executive officers, as well as the pay of directors, the CEO and at least its top five executive officers on a named basis.

This brings it in line with what other listed companies on Singapore Exchange already have to adhere to under the Code of Corporate Governance. Currently, Reit managers adopt different standards in disclosing the remuneration of their directors, with some more transparent than others.

MAS also proposed to have the performance fee computed using a methodology that links such fees to "an appropriate metric" - say net asset value per unit or distribution per unit - which takes into account the long-term interest of the Reit and its unitholders, it said.

The performance fee should not be linked to the Reit's gross revenue (which can be boosted in tandem with a Reit's debt); it should also be paid no more frequently than once a year.

The exact "metric" and whether it will be an one-size-fits-all implementation will be decided on post-consultation, although analysts say the latter is challenging and unlikely.

Besides performance fees, MAS is proposing to allow Reit managers to charge an acquisition/divestment fee only to recover their costs. This is to curb concerns that acquisition fees (fees paid to a manager for acquiring assets) run the risk of "asset-growth bias", MAS said.

The common complaint is that Reit managers sometimes acquire expensive properties to get a bigger fee cut.

UOB analyst Vikrant Pandey said that this was a good prudent measure. "Although it may negatively impact fee income for large sponsors such as ARA Asset Management, CapitaLand and the Mapletree group in the near term, there will be greater interest in their respective Reits in the long term."

While most analysts see this as a positive for retail investors, one said that it might be "onerous" for the Reit managers because it "discouraged growth". He noted that among deals done in recent years, most did not benefit the sponsors at the expense of unitholders. "It's a very touchy subject. Some managers do acquire to get the fee, but there are others that deserve to get paid because the returns they give are higher."

Higher proposed development and leverage limits were two other mooted points seen as pluses for both Reit unitholders and issuers. MAS suggested raising Reits' development limit from the current 10 per cent to a maximum of 25 per cent of their deposited property, if certain conditions are met.

DMG & Partners Research analyst Ong Kian Lin said that this would enable the Reit to rejuvenate the properties on their own, as opposed to their current practice of having to park a refurbishing asset with the sponsor in order to avoid breaching the development limit. "But this might turn away some safe-haven clients like insurance funds and pension funds, because Reits will take on more development risks as they become more 'developer-like'."

The other proposal was to remove the option for credit-rated Reits to leverage up to 60 per cent, and instead put in place a single-tier leverage limit of 45 per cent (up from the current 35 per cent), whether the Reit has a credit rating or not.

MAS said that most Reits have kept their leverage ratios within 35 per cent. Most analysts see it as a boost to the expansion potential of Reits.

Besides this, MAS is also seeking feedback on whether the current approach of relying on disclosure to impose market discipline on the use of income support arrangements is effective.

This is important because income support arrangements can artificially inflate property values and blur the lines between a property's real yields supported by fundamentals, versus actual yields helped by income support and other financial engineering mechanisms.

The consultation paper is available on the MAS website, and comments should reach MAS by Nov 10, 2014.

leemx@sph.com.sg


Debate over Reit governance not over yet

[Singapore] PROPOSALS by the central bank to strengthen the rules governing Singapore real estate investment trusts (S-Reits) and Reit managers will go some way to mitigate the "agency problem" seen in these Reits.

But with the Monetary Authority of Singapore (MAS) stopping short of taking a stand on whether Reits should be internally or externally managed, the debate over Reit governance is unlikely to go away soon.

Some industry players believe that Singapore should eventually go the way of the United States where most Reits are now internally managed, though this structure is not without its disadvantages.

S-Reits, like most listed Reits in Asia Pacific with the exception of The Link Reit in Hong Kong and the stapled structures in Australia, are predominantly externally managed by a Reit manager.

The manager is paid a fee by the Reit in return for its management services. While managers owe a fiduciary duty to act in the best interests of investors, the separation of ownership and control raises the risk that managers or related parties will use the assets for their own gains at the expense of unitholders.

Having strong sponsors that own the Reit manager and hold a large unitholding in the Reit may exacerbate the principal-agent conflict.

However, MAS' decision to hold off taking a position on this issue reflects the fact that it is still not conclusive that internally managed Reits, such as those in the US, are more efficient and yield higher returns for investors. There are grounds to argue too that such potential conflicts can be managed if there are proper investor protection measures in place.

To this end, MAS has undertaken rounds of reviews and enhancements to the regulatory regime for Reits.

The latest review has culminated in wide-ranging proposals to address growing concerns over the governance of Reits.

Sing Tien Foo, deputy head of the Department of Real Estate at the National University of Singapore, noted that the proposed changes are aimed at making Reit managers more accountable and transparent, which is good for investors.

"Now, it is often difficult for investors to tell whether they are being exploited or enjoying the benefits of the asset management structure," he said. Some assets may only proved to be non-accretive years away from the point of acquisition.

MAS' proposal to restrict Reit managers to charging an acquisition or divestment fee only at "cost recovery" basis will also dis-incentivise Reit managers from merely buying or selling assets in order to generate more fees for themselves, Dr Sing said.

One investment banker noted that this will minimise non-accretive transactions by the Reit manager just to earn fees and opportunities for the sponsor to garner huge capital gains from divestments to the Reit.

Given the current incentive of a one per cent fee based on purchase values, some acquisitions could have taken place to the detriment of unitholders, especially when they were funded through dilutive equity issuances, the banker observed.

Corporate lawyer Robson Lee, partner at Shooklin & Bok, felt that proposals to beef up board independence are aimed at "delinking any undue influence from the sponsor".

"There is potential for some of these proposals to be extended to business trusts," he said. "I believe this is all part of a series of enhancements that MAS is going to roll out."

Among its proposals, MAS suggested raising the degree of board independence in Reits if unitholders have no say in the appointment of directors, increasing disclosure requirements on the remuneration of directors and executive officers, and improving the alignment of interests between Reit managers and unitholders through an appropriate fee structure.

Proponents of internal management structures for Reits have argued that conflicts of interest will fade away once the management is internalised.

Rachel Eng, joint managing partner at WongPartnership, however noted that if Reits internalise their management, investors may start pricing in operational risks, in the same way they have discounted the shares of property development companies.

Most agree that MAS has demonstrated strong cognisance of the evolving Reits landscape with the proposal to allow the stapling of a Reit to an entity with active operations - subject to conditions to ensure the Reit has sufficient synergy with the entity and the stapled group keeps to certain operational limits.

"This gets rid of a fundamental flaw in Reits, which is conflict of interest and limited growth," said the investment banker, who noted the limited availability of yield-accretive assets that could be acquired. At some point, the Reit has to go back to the "build and hold" strategy, which is provided for under a stapled group.

Currently, most stapled securities here consist of a Reit component that is stapled to a dormant trust and are commonly adopted by Reits in the hospitality sector, such as CDL Hospitality Trust and Far East Hospitality Trust.

Mr Lee said: "The landscape has come of age and we now have a critical mass of Reits since Reits came about some 10 years ago. MAS is right to set all this in place."

Lynette Khoo

lynkhoo@sph.com.sg

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Token fees for pro bono work in criminal cases

Straits Times
03 Oct 2014
Danson Cheong

Funding part of bid to expand legal aid scheme, recognise lawyers' efforts

LAWYERS who do pro bono work for the Criminal Legal Aid Scheme (CLAS) will be paid an honorarium for the first time.

The token fees would amount to a few hundred dollars for each case and be scaled according to several factors, such as whether the case goes to trial, said Mr Tanguy Lim, director of Pro Bono Services at the Law Society, which administers the CLAS.

Lawyers who volunteer with the Legal Aid Bureau, which deals with civil cases, and Legal Assistance Scheme for Capital Offences already receive honoraria for their pro bono work.

The increased funding for criminal legal aid is part of the Government and Law Society's efforts to expand the scheme.

It currently benefits some 400 individuals each year. However, the society hopes up to 6,000 each year would eventually benefit.

Details are still being finalised but the Law Society said the changes would start "soon".

Mr Lim noted the fee is just a token to recognise the efforts of volunteer lawyers and a fraction of actual legal fees.

Currently, about 30 to 40 per cent of the 4,600 lawyers here do pro bono work.

It is hoped these numbers will increase when the new measures kick in.

"With this new funding, more accused persons with limited means would have access to legal assistance and representation," said Senior Minister of State for Education and Law Indranee Rajah at the annual Asia Pro Bono Conference held yesterday.

She said that government funds would also cover costs needed for obtaining documents such as medical reports.

Pro bono lawyers here welcomed the move.

"Most of the people doing pro bono work are from small law firms and this token will be helpful," said Mr Tan Cheow Hung, director of Beacon Law Corporation, though he noted the true motivations for pro bono work still had to come from a sense of empathy or social responsibility.

Criminal lawyer Josephus Tan, who is also the pro bono ambassador of the Law Society, said: "Even if the fee is not a few hundred dollars, if it's just $50 or $100, it's an appreciative gesture and I welcome it."

Some lawyers argue a monetary token would not be in the spirit of pro bono work, but Mr Tan said that those who felt this way could always donate the money to other charitable endeavours.

"Why not take the money from one good cause and put it in another? This is a win-win situation," said Mr Tan.

dansonc@sph.com.sg

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How the Office of the Public Guardian can live up to its name

Straits Times
16 Oct 2014
Toh Yong Chuan

The Office of the Public Guardian administers the Lasting Power of Attorney scheme, which lets people appoint a "donee" in advance to take care of legal decisions should they lose mental ability. More safeguards are needed to prevent abuse of the scheme.

THE Lasting Power of Attorney (LPA) scheme has come under the public spotlight recently, triggered by two high-profile public cases.

In one, the niece of rich widow Chung Khin Chun, 87, is seeking to revoke the LPA her aunt granted to former China tour guide Yang Yin, 40, in 2012.

In the second, Mr Gabriel Ng, the son of former SA Tours boss Ng Kong Yeam, 75, is challenging the LPA that his father granted to Madam Kay Swee Pin, 62, in 2011.

Madam Chung and Mr Ng are among 6,500 Singaporeans who have signed up under the LPA scheme since it started in 2010.

It is a voluntary scheme that allows proxy decision making, by letting a "donor" appoint a "donee" in advance to make key decisions on his personal welfare and financial matters should he lose the mental ability to do so.

Similar mental capacity laws and schemes are found overseas, like those in Britain and Australia. Singapore's laws are modelled after the England and Wales Mental Capacity Act, which sets the conditions and safeguards when decisions are made in proxy.

The two recent high-profile cases raise the question of whether there are enough safeguards to prevent abuses in the scheme here.

Safeguards against abuse

THE issue of safeguards was debated extensively in Parliament when the Mental Capacity Act, which enabled the setting up of the LPA scheme, went before the House in September 2008.

Speaker of Parliament Halimah Yacob, then a backbench MP, pointed out that "the Bill gives proxy decision-makers power without too much accountability".

Responding, the then-Minister for Community Development, Youth and Sports Vivian Balakrishnan said steps would be taken during implementation to ensure that donees do not exercise their powers inappropriately.

"We will make sure this protection is catered for," he said.

Fast forward six years. The Office of the Public Guardian (OPG), which now comes under the Ministry of Social and Family Development, has put in place safeguards which it has stoutly defended as adequate.

At a press briefing last month, the office handed to reporters a list of safeguards which included having LPA forms certified by experts such as a doctor or lawyer. The office also sends experts to check on the welfare of donors and investigates complaints.

But it was firm in the areas that it will not be drawn into doing.

For one thing, it will not compel donors to inform their family members when they apply to be on the LPA scheme.

This stand is reasonable. Family relationships are complex and it is up to individuals whether they want to keep their family members informed of their decisions, just as they do when they make a will.

Also, the office maintains that it will neither supervise donors nor judge "the quality" of their decisions on who they grant LPAs.

Mr Tay Yong Seng, a partner at law firm Allen & Gledhill, put it well when he gave his personal views on the scheme at a public talk last week: "The extent of supervision for the OPG cannot extend to the same amount of supervision that the Commissioner of Charities does for the charities... We are dealing with private monies."

While the OPG may argue that safeguards are adequate, it should be open to making improvements to shore up public confidence in the scheme. There are at least three such areas.

Three areas of improvement

Notify Office of the Public Guardian when LPA is applied

The current safeguards are more heavily stacked towards making sure that LPAs are properly drawn up rather than how they are applied.

When The Straits Times asked the OPG at a press briefing last month how many of the donees of the 6,500 LPAs have already started using their powers, the question drew a blank.

The OPG does not know the answer because there is no requirement for donees to tell the OPG when they start using their LPAs.

This is a glaring weakness in the system. How can the OPG monitor what it does not know?

The OPG is justifiably worried about making the LPA too onerous on the donor and donee.

But the process of keeping the OPG informed when an LPA is used is not an onerous one for most donees - it can be through a simple phone call or submitting an online form. And it has advantages like allowing the OPG to have a better picture of what is happening on the ground.

It can even act as a road bump to make would-be abusers think twice. They know that they will not be able to fly below the radar as they do now.

And this improvement is also entirely within the remit of the OPG's role as an LPA registry, for it is now tracking both valid LPAs and those that are in active use.

This is the first area of improvement.

Upgrade guidelines on medical certification to compulsory requirements.

Second, while there is no requirement for donees to produce medical reports to show the donors have lost their mental capacities when they use the LPAs, banks still require donees to do so.

The Association of Banks in Singapore said: "If the medical certification is not clear, banks have the right to reject the donee's authority given under the LPA to transact on behalf of the donor."

This is a sound practice.

The Council for Estate Agencies also requires property firms and agents to comply with LPA guidelines issued by the OPG. It issued two letters to firms and agents this year to remind them to comply with LPA guidelines, said council deputy director for licensing Yeap Soon Teck.

The OPG should make medical certification a standard requirement in some instances rather than leaving it as a practice or guideline. For example, financial transactions above a certain amount can be made only when a valid LPA is accompanied by a medical report showing the donor's mental incapacity.

And firms like banks and estate firms who handle these LPA-related transactions should be made to keep the OPG or their regulators informed.

This will give some measure of assurance to donors that the persons whom they trust as donees will still be subjected to some regulatory oversight.

It cannot hurt.

Sound alarm if unrelated person is appointed donee

Third, alarm bells should ring within the OPG when a Singaporean with direct family members decides to appoint an unrelated person as his donee.

This is especially so if the LPA applications involve vulnerable groups. One such group is old widows - half of the current 193,000 women aged 65 and older are widows. This group is expected to grow bigger as women have longer life expectancy than men.

Curiously, the present LPA application form does not require donors and donees to spell out their relationships.

But the OPG told The Straits Times the vast majority of LPAs - 94 per cent - involves donees who are family members.

Still, that leaves 6 per cent of them, or about 400, who have donees who are unrelated, like Madam Chung, who appointed an unrelated former tour guide from China as her donee.

One wonders whether having unrelated donees when there are family members is a recipe for future conflicts. If so, it will serve the OPG well to flag these cases for further scrutiny.

In a reply to a parliamentary question earlier this month, Minister for Social and Family Development minister Chan Chun Sing took pains to emphasise that the safeguards are adequate and that "collective cooperation" is needed.

Said Mr Chan: "Everyone has a role to play and a responsibility to uphold within the LPA framework - the donor in his choice of donee; the certificate issuer in ascertaining the donor's understanding; the donee in acting in the best interest of the donor; and the OPG in its registry and investigation functions."

While the individual has to bear responsibility for his decisions, including poor ones, the OPG cannot shy away from public expectations of its guardianship and gatekeeping role.

Afterall, the head of OPG holds an inspiring title of Public Guardian, evoking an image of a knight in shining armour. Saying that the Public Guardian is merely a registry keeper and abuse investigator is uninspiring.

If it were so, it would be better served for the OPG to change its name.

The LPA scheme is in its infancy. While the two high-profile cases should not shake public confidence in the scheme, the scheme's administrators can strengthen public trust by remaining open to reviewing and improving it where warranted.

tohyc@sph.com.sg

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StarHub faced similar accusation: Placing ads on websites without consent

TODAY
10 Oct 2014
Tan Weizhen

Singapore’s second-largest telco StarHub faced a similar situation in 2010, when the owner of an online maternity retail shop accused it of placing ads on her website without prior consent.

But technology lawyers here say it is not entirely illegal in Singapore for telcos to place ads without permission.

The owner, who was a subscriber of the now-defunct StarHub service MaxOnline HubStation, had discovered ad banners advertising food and hygiene products on the top of her website.

She charged that the banner gave the impression that her site endorsed such products, which was not the case.

In response, StarHub said that the advertisement was inserted into a toolbar for the Web browser, and was not part of her website.

A spokesman elaborated in response to queries, that this was an ad for a free service: “The leaderboard toolbar is no longer available via StarHub HubStation. It was previously available only to customers on the free 1Mbps broadband service via HubStation, and was not an inherent part of any website.”

Regardless of positioning, technology lawyer Rob Bratby said any placing of ads by StarHub was likely not wholly prohibited. In addition, it would have also been covered under the terms and conditions, he said.

 “It would depend on all the circumstances, but the Singapore Computer Misuse Act is not aimed at this type of activity, so my view is that this type of activity is not subject to a blanket ban in Singapore.”

He added that if the service is available with ads, but at a cheaper price, then it might be an effective way of serving customers who would otherwise not be able to receive service at all.

In Singapore, the nationwide Wireless@SG  network is free, but ads are shown. Music service Spotify also has a free version, of which there are ads, and a premium version that users have to pay for.


Indonesian telcos in battle over rights

Industry association groups accuse them of failing to keep agreement to stop placing adverts on member websites

SINGAPORE — Indonesia’s two biggest mobile-phone operators and a telecom industry body are embroiled in a heated war of rights with industry association groups, which have accused the telcos of failing to keep their agreement to stop placing advertisements on member websites, effectively hijacking those sites with their intrusive and sometimes inappropriate ad content sans approval from the sites’ owners.

But the telcos, and the Association of Indonesian Telecommunications Provider (ATSI), are adamant that their actions are within their legal right, saying they own the network and infrastructure.

This came about after the Indonesian E-Commerce Association (idEA) and Indonesian Digital Association (IDA) protested against what they assert are intrusive advertising practices by Telkomsel and XL Axiata, which are disturbing user experience and taking away potential ad revenue from those sites.

In total, 39 member sites under idEA and 21 sites under IDA are protesting against this practice.

The two telcos had initially agreed to cease the practice, idEA and IDA said, but have now started posting the intrusive advertisements again.

In a statement from idEA and IDA last month, the two associations said the telcos have been running two types of ads on mobile sites via their mobile networks. These comprise ads that fill the entire users’ screen before they go to their intended address and those that appear as a banner at the top of a page.

“The primary concern from both associations is the fact that this advertisement is being published without the consent and cooperation with the site owners, whereas public perception assumes the responsibility from site owners for every advertisement being published in their properties. Consequently, site owners have received complaints from their users concerning these ads,” said the groups.

The two groups said the content of the ads are also often inappropriate, such as sexually explicit graphics.

idEA and IDA charge that this is akin to defacing or altering a webpage, which is illegal.

Speaking to TODAY, Mr Steve Christian who represents IDA, said: “By any applicable laws, nobody is allowed to hack or alter any appearances of any websites without consent from the owners.”

However, the telcos, while saying they have stopped placing the unwanted ads, defended themselves vigorously at the same time.

Responding to TODAY’s queries, Mr Herwinto Sutantyo — Head of M-Advertising at XL Axiata, said that when subscribers sign up, it is in the terms and conditions that they need to accept promotional ads.

However, the groups said there are no transparent communication and procedure on how to opt-in or to opt-out.

ASTI, in a statement, called the possession of telecommunications networks and services as well as customers the private rights of the telcos.

“It should also be recognised that e-commerce and online business players have even benefited from the operator’s big number of subscribers,” it said.

Beyond the terms and conditions, the telcos are saying that the infrastructure was built at “private-sector costs with no subsidisations (sic) from government, while giving the lowest data-plan to consumers”.

Mr Sutantyo added that the reason some ads have reappeared — as per the groups’ accusation — is because the telcos had not been not informed of any new member websites.

The telcos are also of the opinion that such advertising practices are legal, quoting bodies such as the Indonesia Telco Association.

Technology lawyer Rob Bratby, a managing partner at Olswang Asia LLP, said: “Whether it is legal in any particular country will depend on the interplay between the applicable laws and regulations and, to the extent these do not prohibit it, the contract the Internet service provider has with its customers.”

Be that as it may, analyst Ryan Huang of United Kingdom-based brokerage IG, said telcos should allow users to opt in, suggesting users may be willing to do so were there incentives such as free data usage for viewing the ads.

weizhen@mediacorp.com.sg

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

Guidelines developed to ‘ensure best use’ of data from drug couriers

TODAY
03 Oct 2014
Neo Chai Chin

Experts weigh in on whether drug trafficker’s case raises need for clearer protocol to certify substantive assistance

SINGAPORE — It was a topic intensely debated in Parliament, before amendments to the law kicked in last year to give certain drug traffickers a chance to escape the gallows.

However, the Public Prosecutor’s decision last month to certify that drug courier Cheong Chun Yin had substantively assisted in disrupting drug trafficking activities — after it had earlier determined otherwise — has drawn mixed views from legal experts on whether clearer guidelines are needed on the issuance of these certificates.

Cheong, 31, was found to have possessed more than 2.7kg of diamorphine in June 2008.

The Malaysian was sentenced to death, but was given the chance to assist the Central Narcotics Bureau after the Misuse of Drugs Act was amended, giving judges the discretion to sentence drug couriers issued certificates of substantive assistance by the Public Prosecutor to life imprisonment and caning, instead of death.

Last November, Cheong was determined by the Public Prosecutor not to have substantively assisted. But last month, the Attorney-General’s Chambers (AGC) announced that “in light of new information received”, Cheong would be certified to have substantively assisted in disrupting trafficking activities outside Singapore.

Singapore Management University law don Eugene Tan agreed that Cheong’s case again raises reasons for the need for clearer guidelines in the issuance of certificates, “even if concerns about convicted persons ‘gaming’ the system persist”.

“Cheong’s case suggests that more can be done to safeguard our Misuse of Drugs Act regime. Imagine the significant dent to public confidence if new information was received after Cheong had been executed,” said Associate Professor Tan, a former Nominated Member of Parliament.

Noting that the threshold of substantive assistance may also be dependent on the conduct of foreign law enforcement agencies — acting with reasonable speed and care, and providing information to the Central Narcotics Bureau on the usefulness of data given by the convicted courier — Assoc Prof Tan said Cheong’s case suggests how the threshold is “dicey”.

It leaves the law open to be discredited, by leaving a convicted person’s fate to circumstances beyond his control, he said.

However, SMU assistant law professor Chen Siyuan noted that the amendments’ purpose was to enhance the effectiveness of the Misuse of Drugs Act in a “non-capricious and fair way without affecting our underlying fight against drugs”, as Law Minister K Shanmugam put it during the parliamentary debate on the amendments.

“Hence, if someone is hanged before new information is received, I would think that, first, this sort of scenario is unlikely to be the norm,” said Asst Prof Chen. “Secondly, if the ultimate purpose of the amendments is to enhance the effectiveness of the (Act), this sort of scenario does not defeat the purpose of the amendments, so there is no need to change anything from this point of view.”

Responding to media queries, the AGC told TODAY the Public Prosecutor had reviewed each capital case involving drug offences that were sent back for resentencing after the amendments kicked in.

Reviews involve consideration of up-to-date information and are based on guidelines developed to ensure the best use of information provided to disrupt activities of drug-trafficking syndicates, said a spokesman.

All pending cases have been re-assessed under guidelines that have been revised to ensure no one who may qualify for substantive assistance and is eligible for resentencing under the new law is prejudiced.

“No accused person has been prejudiced by changes to the guidelines,” said the spokesman.

The AGC did not reveal when the guidelines were revised, but said Cheong, whose substantive guilt had never been in issue, was reassessed according to the revised guidelines and information obtained.

“Whether there is ‘substantive assistance’ is a question of mixed law and facts, and it turns on the operational parameters and demands of each case,” added the AGC.

More clarity could be shed on the provision that gives judges discretion in sentencing drug traffickers who meet the requirements.

The Court of Appeal has yet to release its grounds of decision on some questions referred by the Public Prosecutor last year, following a High Court judgment for drug trafficker Chum Tat Suan.

Questions the Public Prosecutor wanted the apex court to address included whether convicted traffickers have to prove they are merely couriers and whether the High Court must take into account evidence used to convict a trafficker in a trial during the second-phase hearing to decide whether he is a courier.

Even so, law professor Michael Hor felt the only lasting solution is to do away with the death penalty altogether, or to make sentencing fully discretionary, or both.

As the twin factors of being a mere courier and providing substantive assistance are necessary legal requirements, much more pressure is put on the definition of these conditions than would have been the case if they were merely factors to be taken into account in a discretionary system, said the law dean of Hong Kong University, who was formerly with the National University of Singapore.

“Decision-makers, be it the court or Public Prosecutor, are forced to draw a bright line between what qualifies and what does not, and it would appear in isolation from all other potential mitigating or aggravating factors. Once that line is drawn, it will always be the case that many will feel offenders (who) fall on one side of the line should actually fall on the other,” he said.

“The problem cannot be solved by further defining the terms — the vicissitudes of life will always throw up ‘hard’ cases that seem to have been wrongly categorised.”

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

Don't equate reduction of costs with overcharging: Forum

Straits Times
16 Oct 2014

MUCH ink has been spilt following recent claims of overcharging by lawyers representing the Singapore Medical Council ("Medical, legal professions need to clear the air" by Dr Jeremy Lim Fung Yen, Oct 3; and "Legal profession's unregulated pricing structure" by Mr Philip Williams, last Saturday).

Without commenting on specific cases before the court and the inquiry committee, it appears necessary to explain the process to the public.

There are two typical situations - when one reviews one's lawyer's bill, and when one reviews the opponent's lawyer's bill.

In Singapore, the general rule is that the losing party has to pay costs to the winning party. Parties can agree on the quantum to be paid, or if they disagree, the court will decide the amount payable after hearing arguments from both sets of lawyers. This is known as taxation.

The winning party's lawyers submit an itemised bill of costs for taxation, which sets out the work done, time spent, lawyers involved and quantum claimed. This bill of costs is subject to the court's detailed scrutiny, and the losing party is entitled to challenge both the overall quantum claimed as well as specific items.

The winning party is entitled to a reasonable amount of all costs reasonably incurred. Any doubts about reasonableness are resolved in favour of the losing party. The quantum determined by the court is an amount that the losing party ought reasonably to pay, and not what a lawyer may reasonably charge the client.

The law actually intends that there will be an appreciable margin between what a losing party pays in taxed costs, and what a winning party has to pay its lawyers. It is an attempt to reach a fair balance between the victor and the vanquished.

In practice, most bills of costs submitted for taxation are reduced. The winning party's lawyers have a duty to seek the highest quantum reasonably arguable, and the losing party's lawyers have a duty to seek the highest possible reduction of those claimed costs.

The court will balance both views and decide. That a winning party's bill of costs was reduced on taxation should not automatically be construed as overcharging. Indeed, if a client is dissatisfied with his lawyer's bill, he can also tax that bill in court.

The Law Society does not condone overcharging by lawyers, and complaints about overcharging are subject to a statutory regime. Complaints made to the Law Society are referred to independent committees for investigation. These committees are not appointed by the Law Society, and it has no control over them.

The public can have every confidence that there are long-established safeguards in place to address overcharging, whether by one's own lawyer or by an opposing lawyer.

Shawn Toh

Director, Communications

The Law Society of Singapore

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Aligning tax and business

Business Times
10 Oct 2014
Francis Kan

An OECD initiative to crack down on tax avoidance will have a major impact on global companies

COMPANIES with cross-border operations need to urgently re-examine their tax practices to prepare for radical changes to international tax laws. The Organisation for Economic Co-operation and Development's (OECD) Base Erosion and Profit Shifting (BEPS) project was launched as a response to the growing perception that governments are losing substantial tax revenue to tax planning. This view has been exacerbated by intense attention on such tax avoidance issues in recent years.

A number of multinational corporations (MNCs) have been subject to intense scrutiny by policymakers such as the UK Public Accounts Committee (2012), the US Senate and, most recently, the European Commission.

Earlier this year, for instance, the Commission criticised tax agreements between Apple and the Irish government, saying the deals were improperly designed to give the tech giant a financial boost in exchange for jobs in the country. Efforts to crack down on corporate tax-avoidance come as governments struggle to boost revenue and cut deficits. Tax avoidance and evasion in the European Union (EU) cost about one trillion euros (S$1.62 trillion) a year, according to the Commission.

"This is very much a business problem and has a wider impact than on tax alone. With the lingering effects of the global economic downturn and governments implementing wide-ranging austerity measures, the sentiment of the general public is that large multinational companies should pay not just the minimum tax in accordance with the law, but instead their 'fair share' of tax," said Henry Syrett, Partner, Transfer Pricing and Operating Model Effectiveness at EY.

The OECD is currently at the midway point of the multi-year BEPS project, which has a keen focus on tax transparency and the alignment of profit allocation with the location of substantive business operations. These include issues such as country-by-country reporting, transfer pricing and treaty reliance.

"The BEPS project marks the most significant change to international tax in modern times," said Chris Woo, Tax Leader, PwC Singapore

He added: "Groups should start undertaking the process of reviewing the sustainability of their tax models vis-a-vis their operational model. If not properly managed, non-compliance thereof may carry serious financial and reputational risks."

Preparing for BEPS

To deal with the proposed changes, companies need to relook at how their tax risks are being managed internally, with the possibility of elevating regular discussions with the board of directors or at the audit committee level.

"This should be the catalyst for more proactive and holistic consideration of tax risks in conjunction with a constantly evolving business environment," said Mr Woo.

In terms of specific actions, the first thing to do would be to identify which areas of a company's current operations or tax strategies would likely be impacted by one or more of the 15 BEPS Actions, said Steve Towers, Deloitte Asia Pacific Leader - International Tax.

He recommended producing a "heat map" to show which of the 15 Actions would likely be relevant to a particular company. The next step would be to assess the stage of development of the OECD's proposed response to each of the relevant Actions.

"Not all Actions are being pursued at the same pace, and thus the proposed responses are clearer for some Actions than others," said Mr Towers. "For example, it's clear that we will have country-by-country reporting (CBCR), in the form of the template that was released by the OECD on 16 September, although the filing process is still being debated. CBCR is a practical certainty. Thus, companies should now start to determine how they will comply with CBCR."

Country-by-country reporting

The country-by-country reporting template has been widely acknowledged as the most controversial aspect of the OECD's BEPS initiative. For one thing, CBCR reporting represents an additional reporting burden, requiring information that may be complex to obtain and present in a meaningful way. This will require additional resource just to compile the information, noted Mr Syett.

"Whichever way it is implemented, the CBCR Reporting tool will open up information relating to the global tax affairs of a multinational company to local tax administrations around the world," he said.

Another key issue being examined under BEPS is transfer-pricing rules that determine how income is allocated among different entities within an organisation. BEPS aims to close any tax loophole caused by perceived transfer mispricing applied by MNCs to allocate income where they can be lowly taxed.

"Under BEPS, there is a strong emphasis to tie the returns to be allocated to each related company with the value it has created. Accordingly, companies will do well to document the value of its contribution, vis-a-vis that of other related parties across the supply chain," said Simon Clark, Regional Partner, Alternative Investments, KPMG in Singapore. "This is especially important if a company's contribution is in the form of intangibles such as brand name and know-how."

To deal with the various changes being proposed under BEPS, companies have to implement tax strategies that follow business strategies.

Said Mr Woo: "Business and operating teams should engage the tax function lest they trip over a seemingly benign tax matter. Legal structures need to be aligned well with business operations. Any structure lacking 'real activity' and 'real people' will likely be under intense scrutiny."


A plan of action

AS the OECD approach to the BEPS issue is not fully developed, companies should adopt a wait-and-see attitude. However, there are things that can be looked at now, says Simon Clark, Regional Partner, Alternative Investments, KPMG in Singapore. These include:

• Country-by-country reporting - It seems inevitable that some sort of global reporting standard will be introduced. Companies should be looking at their information systems and their ability to generate these answers.
• Transfer pricing - Various countries may change their approach to transfer pricing - for example, Australia - which adds to the risk for business to the extent that it potentially leads to double taxation.
• Treaty reliance - Companies should be looking at situations where the reliance on a tax treaty is not well founded. For example, if you were investing in India via Singapore without having any people or presence in Singapore, you might want to consider the ongoing viability of those arrangements.
• Financing - Companies should look at financing situations which lead to beneficial tax outcomes. For example, where the return - through interest for instance - is deductible in the paying country but not assessable in the receiving country.
• Taxable presence - companies might want to review situations where they derive significant revenue in a country but pay little tax in that country.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Damages for widow whose husband died in Sydney car plunge

Straits Times
03 Oct 2014
K.C. Vijayan

Aussie court says carpark barrier at hotel was 'grossly inadequate'

MS MICHELLE Lee was waiting for her husband to park on the second-storey carpark of an uptown Sydney hotel.

But she was horrified when she saw their car reverse through the safety barrier and plunge 9m to the ground, killing her husband.

Eight years later, Ms Lee, 41, a Singaporean, will be given "substantial damages", a Sydney court has ruled.

Apart from losing out on "significant economic benefits of the marriage", Justice Robert Beech-Jones found that the incident had caused "an almost complete psychological collapse affecting every part of her life, including her promising career as a speech pathologist".

In fact, Ms Lee was so traumatised that a minor accident in 2012 brought back "horrific memories": She thought about killing herself, could not sleep for days or stop weeping, and had to stay in a psychiatric clinic for three weeks.

The court heard that the couple had married in 2000, when both were 27, and were based in Sydney.

Ms Lee, who grew up in Singapore and worked for four years here as a special education teacher, had studied speech therapy in Australia. Her late husband, former Straits Times journalist Thomas Lee, had been working with Sydney Ports Corporation as a systems analyst. Both were National University of Singapore graduates. She also holds a diploma from Nanyang Technological University.

In March 2006, Ms Lee had been with her husband, then 34, at the carpark in the Carlton Crest Hotel (Sydney), in the city's Haymarket area.

She alighted first, before her husband reversed the vehicle into a parking space, driving at no more than 5kmh. But the car hit a metal barrier which gave way. With nothing to stop it, the car fell off the edge of the building and crashed to the ground. Mr Lee was later pronounced dead.

Ms Lee sued Carlton Crest and the City of Sydney Council for negligence and for the nervous shock she suffered witnessing her husband's death.

Her lawyers argued that Carlton - as the carpark's owner and operator - was responsible for making sure the railings were properly checked for defects and that it "owed a duty of care" to users. Ms Lee also sued the council as the authority responsible for approving the design, construction and use of the carpark.

The court found that the perimeter railing meant to keep vehicles from driving through it was "grossly inadequate" and heard that it was more like a "pedestrian railing" than one for cars. It also did not comply with design standards that would ensure specific resistance levels.

In addition, it found that an additional safety device to stop the car - the wheel stop - was inadequately fixed and had also failed.

Justice Beech-Jones found the late Mr Lee to be 20 per cent to blame for the accident.

But he also declared both Carlton and the council negligent, ordering Carlton to shoulder three-quarters of the compensation, with the council paying the rest.

"It follows from my findings that her damages will be substantial," said Justice Beech-Jones.

Damages, which could exceed a million dollars, will be decided later this month.

vijayan@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Marshalling games' fine print: Rajah & Tann to advise Singapore South-east Asian Games Organising Committee

Straits Times
16 Oct 2014
Wang Meng Meng

Rajah & Tann to provide legal advice at the 2015 SEA Games on home soil

AS THE official legal partner of next year's SEA Games in Singapore, local law firm Rajah & Tann will overseea wide range of fine print that could prove to be potential minefields.

Apart from examining rules and regulations to avoid disputes, it will also provide advice to the Singapore South-east Asian Games Organising Committee (Singsoc).

Rajah & Tann will advise, prepare and negotiate the various legal documentation necessary for the hosting of the Games. These duties include advising agreements on sponsorships, media rights, marketing, merchandising, licensing issues, venues, logistics and ticketing.

The firm hopes to achieve this through clear communication with the organisers, athletes, officials and sponsors.

The firm's partner and head of intellectual property, sports and gaming, Lau Kok Keng, told The Straits Times: "Effective education and communication on the do's and don'ts is important. It is better to pre-empt and prevent things from happening."

There are several ways in which athletes, officials and sponsors could fall foul of the competition rules and regulations.

While the three official main sponsors on board so far - telco SingTel, professional services firm Deloitte and the NTUC FairPrice Group - get to splash their brands at venues or on the athletes' apparel, international events are also a rich hunting ground in which rival companies try and showcase their products through ambush marketing.

Lau said: "Subtle forms of ambush marketing have arisen in the sporting arena that are difficult to deal with. A Team Singapore athlete may unzip his tracksuit, manufactured by the official sponsor, to reveal a shirt underneath made by a rival brand that sponsors his apparel.

"Similarly, he may drape a towel, made by his personal sponsor, over the tracksuit to obscure the logo of the official sponsor and to reveal the logo on the towel. Or he may stroll into competition wearing headphones supplied by a brand that is not an official sponsor."

With the SEA Games to be held from June 6-15 next year, during the haze season, extreme weather conditions could even lead to affected events being postponed or cancelled.

Lau, who is also the vice-chairman of S-League football club Geylang International, believes there must be a clear consensus on the trigger points for a cancellation or postponement.

He explained: "There must first be consultation with medical advisers as different sports have different thresholds. For a demanding aerobic sport like football or the marathon, a reading in excess of PSI 100 may be bad enough to call off a match."

Other issues arise in such a scenario. "In sailing, it is possible for a second-placed team to overhaul the leader in the last race. Countries might take issue and dispute the need to cancel events because of the haze.

"But for an event like shot put or javelin, it might matter less. The important thing is such matters should be pre-agreed so that there will be no allegation of using the haze as an excuse to gain an unfair advantage.

"In relation to sponsors, the legal consequences of a cancellation of the Games because of haze or other circumstances beyond the reasonable control of Singsoc would also have to be addressed in the sponsorship contract."

Even the case of three national swimmers who allegedly drank during the Incheon Asian Games has an echo for the future. Lau believes clear communication would enable athletes to seek proper approval to celebrate.

Team officials, too, need to be aware of rules set by the organising committee governing the use of branding and sporting equipment. "There is a requirement to comply or it may affect the country's participation and standing. If officials mess up, it can be hugely embarrassing especially when we are the hosts of the Games," said Lau.

meng@sph.com.sg


Background Story

PRE-EMPT ISSUES

Effective education and communication on the do's and don'ts is important. It is better to pre-empt and prevent things from happening.

- Rajah & Tann partner Lau Kok Keng

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Over 200 changes made in Companies Act overhaul

TODAY
09 Oct 2014
Tan Weizhen

SINGAPORE — Sweeping changes to the Companies Act were passed in Parliament yesterday, in the largest overhaul of laws governing the conduct of businesses in Singapore since the Act was enacted in 1967.

The changes aim to liberalise the regulatory regime and introduce more flexibility to the business environment. Among the more than 200 amendments made is the exemption of small companies from having to get their accounts audited — a move that could reduce compliance costs for at least 25,000 small firms.

The one-share-one-vote restriction will also be lifted for public companies, giving them greater flexibility in raising capital and providing investors a wider range of investment opportunities, said Senior Minister of State (Finance) Josephine Teo. This amendment will benefit about 800 non-listed public firms, she added.

A new multiple-proxies regime will also give Central Provident Fund investors the same rights as direct investors to vote at shareholder meetings.

Holland-Bukit Timah GRC Member of Parliament (MP) Liang Eng Hwa and Sembawang GRC MP Ong Teng Koon raised concerns including whether firms would abuse audit exemptions and if removing the one-share-one-vote restriction — essentially allowing firms to sell shares without the accompanying voting rights — would entrench the power of companies.

Said Mr Liang: “We need to safeguard against businesses of a bigger group deliberately creating small companies just to enjoy audit exemptions.”

Mr Ong pointed out public feedback on concerns over how the Finance Ministry could ensure proper accounts are kept by small firms.

In response, Mrs Teo noted that while audits could be useful, they cost time and money. “It is also not strictly necessary for ACRA (Accounting and Corporate Regulatory Authority) to impose an annual requirement for small companies that do not have wide public interest,” she said.

She added that the amended Act still requires all firms to keep proper accounts, even if there is no mandatory audit, while the Inland Revenue Authority of Singapore selectively checks the tax returns of small companies.

On lifting the one-share-one-vote restriction, Mr Ong noted that this is a contentious issue in many jurisdictions. Detractors of such a move have argued that there should not be “second-class shareholders”, he added. Still, he pointed out that Singapore has to be pragmatic about this, as firms would go to places that allow them greater access to public markets for capital.

Mrs Teo said this change was essential in view of global developments and demands of increasingly sophisticated investors. “The Bill will require public companies to ... clearly demarcate the different classes of shares, so shareholders know the rights attached to any particular class of shares,” she said.

The Singapore Exchange and Monetary Authority of Singapore are reviewing whether listed firms should be permitted to issue shares with different voting rights. Pending the conclusion of the review, listed companies will not be allowed to do so.

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

Woman who stabbed ex-girlfriend pleads guilty to reduced charge

Straits Times
03 Oct 2014
Selina Lum

AFTER going on trial for six days for the attempted murder of her former girlfriend who refused to get back into a relationship with her, a 25-year-old woman pleaded guilty yesterday to a lesser charge of attempted culpable homicide.

Giselle Shi Jia Wei broke down as she admitted stabbing Ms Ummul Qurratu 'Ain Abdul Rahman, 22, twice in the chest in a Geylang hotel room in July 2012. Instead of life in prison or up to 20 years' jail for attempted murder, the bespectacled, long-haired Shi now faces up to 15 years' jail and a possible fine on the reduced charge.

The prosecution had agreed to amend the charge after oral representations from Shi's lawyers on Wednesday.

The High Court will hear sentencing arguments on Oct 10.

The court heard yesterday that the pair started a romantic and sexual relationship in July 2011. At the end of that year, Ms Qurratu 'Ain stayed at Shi's family home. The couple then cohabited in Malaysia for two months before returning to Singapore in July 2012.

Throughout this time, their relationship was "highly unstable and fraught with frequent quarrels and confrontations" due to Shi's possessiveness towards her lover, the court heard.

Following a quarrel on July 14, 2012, Shi told Ms Qurratu 'Ain she wanted to end their relationship.

Three days later, on Shi's request, the pair spent the night at a Geylang hotel where Shi tried to patch things up but to no avail.

On July 21, the accused bought a knife with a 10cm blade and kept it in her bag. She planned one last reconciliation attempt, failing which she would stab both Ms Qurratu 'Ain and herself in a murder-suicide ploy.

Shi again asked her former lover to meet her and the pair checked into the same hotel. The next day, while Ms Qurratu 'Ain was lying naked in bed, Shi asked to start afresh, saying she thought they would be together in life or death.

When Ms Qurratu 'Ain rejected her, Shi reached for the knife in her bag and plunged it into her former lover's chest. In the ensuing struggle, the knife was pulled out and Shi stabbed Ms Qurratu 'Ain a second time. The victim blacked out and Shi tried to kill herself by stabbing her own chest.

When Ms Qurratu 'Ain came to, she tried repeatedly to leave the room but was foiled by Shi each time. Eventually, as Shi was losing consciousness, she escaped and sought help from a couple, who called the police.

selinal@sph.com.sg

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MTP will lower liquidity, raise listing cost: SMCCA

Business Times
16 Oct 2014
Angela Tan

Small & mid-cap companies association says proposed rule will add 'no meaningful value' to capital markets

[Singapore] SINGAPORE'S Small and Middle Capitalisation Companies Association (SMCCA) believes that Singapore Exchange's (SGX's) proposed adoption of a Minimum Trading Price (MTP) will add "no meaningful value to the capital markets" but instead reduce liquidity and add to listing cost.

In response to SGX's public consultation papers on minimum price and enforcement, the voice for small and mid-cap listed companies says that the move to peg MTP at 20 cents a share should not be implemented as it will have a "negative impact on market liquidity in addition to other unintended consequences".

It argues that MTP will not be an effective policy if it aims to minimise misconduct and abuse such as those seen during the infamous penny stocks saga involving stocks such as Blumont, Asiasons and LionGold.

MTP won't alleviate the risk of high volatility or reduce excessive speculation and market manipulation and will neither improve liquidity nor reduce market impact cost, it says.

"Implementing MTP, however, will increase issuers' cost of listing on SGX and also confuse shareholders and investors especially if companies choose to consolidate shares. The potential outcome is further reduction in liquidity and even erosion of wealth," it notes.

SMCCA went on to speculate that this is an attempt by SGX to migrate small and mid-cap companies to the Catalist board and "hence the cost of monitoring to Catalist sponsors or maintain a thinly traded mainboard listing".

On enforcement, it believes that the objective of the regulators to introduce the various enforcement frameworks is to provide SGX with more regulatory powers towards issuers.

"However, SMCCA argues that SGX's role is to regulate its members and not issuers. The role of regulating issuers should remain with MAS (Monetary Authority of Singapore). This is in line with what is written in the Securities and Futures Act," the association explained.

It raised the issue of SGX's independence in the various enforcement committees to be created under the proposal - a Listing Advisory Committee, a Listing Discipline Committee and a Listing Appeals Committee - as well as issuers' lack of access to these committees.

"The desire of SGX to regulate issuers through these proposed regulatory changes does not lie on sound legislative or logical claims, nor are they independent, fair and transparent enough. The regulatory role of issuers is better left to MAS. SMCCA's stance is that the enforcement measures and the widening of SGX's powers need to be radically reconsidered and not implemented in its current form," SMCCA added.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Concerns raised over Bill allowing 'dual-class' shares

Straits Times
09 Oct 2014
Yasmine Yahya

Questions related to rules applying to listed firms and pricing issues

TWO MPs raised concerns yesterday that changes to the Companies Act allowing certain firms to issue shares with different voting rights could affect retail investors.

The Companies (Amendment) Bill passed yesterday removes a one-share-one-vote restriction on public companies.

The change applies to 800 public non-listed companies. These firms can have more than 50 shareholders and their constitutions do not restrict the right to transfer shares.

The Singapore Exchange and the Monetary Authority of Singapore are reviewing whether listed firms should also be permitted to issue such "dual-class" shares, which critics said are unfair to small shareholders.

Mr Ong Teng Koon (Sembawang GRC) told Parliament that the change will help Singapore retain its competitiveness as a financial centre but there are still risks, especially if the rule is eventually applied to listed firms.

He suggested that the Ministry of Finance (MOF) consider setting limits on the proportion of non-voting shares a company can issue or providing a sunset clause so that dual-class shares expire after a set period.

Senior Minister of State for Finance Josephine Teo said the Bill does not include such provisions as its aim is to give greater flexibility to public companies raising capital.

But it will have checks and balances for all public companies, listed or not, she added.

It will, for example, require firms to specify clearly the rights attached to each class of share.

Mr Liang Eng Hwa (Holland-Bukit Timah GRC) asked whether Singapore's financial markets were efficient enough to fairly price shares with different voting rights.

Mrs Teo responded that pricing will have to be determined by the firms and that investors will have to assess for themselves whether the discount or premium being offered is fair.

Mr Ong and Mr Liang also raised questions about a clause allowing small firms to be exempt from auditing their accounts.

Mr Ong asked how the Government will ensure that these firms continue to keep proper accounts so that the risk of tax evasion does not increase.

Mr Liang raised a concern that the big firms might spin off small ones to enjoy audit exemptions.

Mrs Teo said the law will still require small companies to keep proper accounts and has measures to prevent abuse by bigger firms.

The Inland Revenue Authority of Singapore has been selectively checking on the record-keeping practices of small companies and will continue to do so to ensure that their tax declarations are correct, she said.

In addition, the Bill will require that a company that is part of a group must not only qualify as a small company to obtain the exemption, but also that the group as a whole must meet at least two of the three exemption criteria.

Parliament passed three other MOF Bills yesterday - the Goods and Services Tax (Amendment) Bill, the Stamp Duties (Amendment) Bill and the Business Names Registration Bill. This last Bill simplifies the process of registering business names.

The Statutes (Miscellaneous Amendments) (No. 2) Bill was made law on Tuesday.

yasminey@sph.com.sg

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Medical, legal professions need to clear the air: Forum

Straits Times
03 Oct 2014

I READ with dismay the article ("Susan Lim case: Court slashes SMC's cost claims"; Wednesday).

The irony of the situation makes for hearty tabloid fodder but we should not disregard the serious implications for both the medical and legal professions.

Two actions seem warranted once the legal dust has settled following any further appeals.

First, both professions need to clear the air and explain to the public how fees are set and arbitrated.

Reduction of the lawyers' fees from $900,000 to $180,000 is staggering; what happens to citizens of lesser means who wish to appeal and challenge the fees charged?

Professions enjoy the privilege of self-regulation, including setting their own fees, because society trusts professionals to place public interests above their own.

Both professions have seen their collective reputations sullied, and the relevant bodies need to act quickly and decisively to restore confidence and trust in the medical and legal professions.

Second, the Singapore Medical Council (SMC) should have the legal fees it has paid out over the years independently reviewed, to ensure there have not been other episodes of overcharging that have gone undetected.

The SMC is a statutory government agency funded by taxpayers' dollars (and doctors' registration fees) and must demonstrate exemplary financial prudence.

Medicine and law are traditional bastions of society and the professions have built up hard-earned reputations for integrity, trust and service to the community over the generations. Let's not throw these away.

Jeremy Lim Fung Yen (Dr)

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OECD's proposed system needs govt, taxmen on board

Business Times
16 Oct 2014
Simon Clark

THE OECD's base erosion and profit shifting (BEPS) initiative seeks to create a tax system based on concepts reflecting years of financial and technological innovation so that countries can effectively tax the economic activity of global business. While its intent centres on promoting greater tax transparency, getting into the details around BEPS quickly brings the discussion into the realm of incomprehensible tax jargon for many people.

So let's strip away the technical changes, and look at the origins of BEPS and what it means for the global tax system. Let's understand what factors led to the current proposals for fundamental changes to the global tax system, and what changed people's sense of tax morality.

As with many significant events, there is no one cause. Let's start with governments, who, like most of us, eventually have to balance their books. They have income (taxes) and expenses, and any deficit has to be made up by borrowings. Before the global financial crisis, a significant portion of the developed world was running up increasing deficits - some still are. Then the crisis happened and everyone including governments needed to tighten their belts.

Many governments have limited ability to control the expense side of their budget. Fixed expenditures and changing demographics are causing rising expenditure in areas such as the provision of medical services and the payment of pensions. All of this put more attention on the tax side of the equation.

What had been happening on the tax side? Clearly global tax systems largely based on old-style manufacturing-based economies had not kept pace with globalisation.

Increasingly mobile companies were setting up their business in ways which minimised their overall tax liability. Companies are able to earn significant revenues from a country without having any presence in that country.

Without such a presence, existing tax rules struggled to find an activity to tax. None of this was or is illegal. However, it does mean that tax liabilities became disassociated from the source of economic profits and value creation.

Many media stories describe how global companies made profits in many countries without any associated tax liabilities arising. A new tax morality discussion, fuelled by media stories, started to emerge but local tax authorities found it increasingly difficult to tax global businesses in a meaningful way.

Clearly, the tax system in many countries was broken and needed to be reset to bring it into line with the modern world.

There were a number of other factors adding to the global tax disconnect including:

• Tax competition - many countries were reducing corporate tax rates and/or introducing special tax incentives to attract or retain business;
• Tax havens offering low or no taxes;
• Financial and technological innovation which made "money" and "business" increasingly fluid concepts; and
• The existence of a global network of financial, legal and tax advisers assisting business to legally minimise their tax expense.

So, for all of these reasons, the new world needs a new tax system. The OECD stepped into the breach to offer solutions based on resetting the tax system to better align economic and tax outcomes. Hence, BEPS was born, proposing changes designed to create a new basis for taxing global companies on their economic profits, while limiting their ability to shift these profits via financial means or other innovative methods. But, will this work? We need to remember that the OECD is not a law-making body and all of its proposals need to be passed into law by national governments.

The big challenge for the BEPS-based tax system is that it needs to operate globally. This means that governments and tax authorities need to work together. We need aligned tax rules, international agreements and quick and effective global tax dispute resolution. We need an end to harmful tax competition between countries.

There are a number of unanswered questions including:

• Will countries put aside the culture of tax competition?
• Will some countries be seeking to tax more of the global profits of a company?
• How will other nations react to such changes?
• How will companies react to all of these changes? Will they migrate to countries which continue to offer tax incentives?

Forty-four countries have agreed politically on the next raft of measures but detailed implementation has yet to occur. What of the other countries around the globe? As the OECD does not make law, there is no guarantee of consistent implementation. There are reasons for this uncertainty regarding implementation. These include indications that some countries are not comfortable with the detail of various measures. There is also flexibility in some areas of the OECD recommendations, which means that rules will not always be aligned.

Added to this, there are also countries which appear to be running ahead of the OECD process. For example, Australia is conducting a detailed review of technology companies in consultation with some other tax authorities.

Lastly, mutual agreement or negotiation between countries on tax issues is notoriously difficult, and there is little to suggest that this will change.

Ultimately, while there may be alignment and enlightenment at the OECD level, how this process will play out in the trenches of tax administrations is not yet clear.

So, the modern world needs a modern tax system and the OECD has the template. The question now is whether this can be implemented in a coherent manner by the various governments around the globe.

The writer is regional partner, alternative investments, at KPMG in Singapore; the views expressed are his own.

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Another LPA storm brews over a rich person's assets

Straits Times
09 Oct 2014
Grace Leong

ANOTHER wealthy elderly person said to be suffering from dementia. Another Lasting Power of Attorney (LPA). Another lawsuit.

But this time, the person in the eye of the storm is not a previously unknown tour guide, but someone who has made headlines before.

Madam Kay Swee Pin was in the news some years back for suing the Singapore Island Country Club (SICC) after it suspended her for lying that she was married to Mr Ng Kong Yeam, a former boss of SA Tours.

Now Madam Kay, 62, is caught up in a new legal tussle over allegations that she forged the signature of Mr Ng, 75, in 2011 to obtain a Lasting Power of Attorney (LPA) to manage his affairs. Mr Ng has dementia.

Mr Ng's son, Mr Gabriel Ng, said in court documents he had found transfers of his father's assets to Madam Kay - including the transfer to her of all his shares in Natwest Holdings, a 99 per cent shareholder of SA Tours - "highly suspicious".

"Natwest was estimated to be worth between $15 million and $20 million at the time of the transfer. It is surprising that all but one share would be sold to Madam Kay for a mere $1 million," Mr Gabriel Ng said.

The older Mr Ng, a former lawyer, is at the centre of a family feud over management of his personal welfare and financial assets - including SA Tours in Singapore and Malaysia - estimated to be worth up to $30 million. The dispute involves Mr Ng's legal wife, Datin Ling Towi Sing, their three children, including Gabriel Ng; and Madam Kay, managing director of SA Tours, and their daughter, Eva Mae, its marketing manager.

At issue is an LPA that Madam Kay obtained on Dec 28, 2011 by allegedly forging Mr Ng's signature to launch legal proceedings, on Mr Ng's behalf, against his legal wife and children, and others.

An LPA is a legal document allowing a person to appoint another to make key decisions should he lose mental capacity.

It has been in the news after a former tour guide from China was accused of manipulating an 87-year-old Singaporean widow into giving him control over her assets estimated to be worth $40 million.

In Mr Gabriel Ng's application to revoke the LPA, and for his family to be appointed deputies to manage his father's affairs, he argues his father did not execute the LPA personally.

He also argues statutory requirements were not met as his father did not personally attest to the statements in the LPA.

Mr Gabriel Ng claims there were two attempts by Madam Kay to execute the LPA. He says that, relying on a purported letter of authority, she allegedly forged Mr Ng's signature.

But Madam Kay, in court documents, denied the allegations of forgery, saying she had signed Mr Ng's name because he "was irritated with her for informing him that he had to sign the forms again", and because he had "given (her) authority to do so". But she said she was "unable to find" the original letter of authorisation.

gleong@sph.com.sg

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Ex-tour guide's employment pass, company under probe

Straits Times
03 Oct 2014
Carolyn Khew

Move part of broader check into his PR status amid fight for $40m assets

FORMER China tour guide Yang Yin was issued an Employment Pass (EP) to run a music and dance school here. Now both the company and the pass are being probed by the authorities.

This is part of a broader investigation by the Immigration and Checkpoints Authority (ICA) into the 40-year-old's permanent resident (PR) status. The Ministry of Manpower (MOM), which had issued him the EP in 2009, told The Straits Times yesterday that "investigations are ongoing".

The Accounting and Corporate Regulatory Authority, which regulates businesses here, said it is "assisting other government agencies to determine if the company or its officers have breached any statutory duties".

After reports of allegations that Mr Yang had manipulated a wealthy widow into giving him control of her assets, estimated to be worth $40 million, he was arrested for suspected criminal breach of trust. Concerns have since been raised about how he managed to gain residency here.

He first met Madam Chung Khin Chun, 87, when he was her personal tour guide for a holiday in China in 2008. A year later, he moved into her $30 million Gerald Crescent bungalow. He came to Singapore on an EP via Young Music and Dance Studio, the firm he set up with Madam Chung on March 25, 2009. Its registered address is at the Gerald Crescent bungalow, and it is believed he was paid $6,000 a month.

A spokesman for MOM said that a range of factors, including salary, qualifications, age and experience, are looked at when considering an EP application.

In 2010, Mr Yang applied to be a PR and was rejected. Subsequently, after working here for around two years, he applied again and succeeded. He became a PR in December 2011.

It is believed that Mr Yang filed taxes and made Central Provident Fund contributions regularly during the period - although allegations have surfaced that his company was a "shell".

The ICA has confirmed that it has received documents provided by the widow's niece pertaining to Mr Yang's degree, which was awarded by the University of Financial and Trade Beijing in 2009. The documents allegedly cast doubts on the degree.

Separately, the ICA revealed that in the past three years, it has processed an average of 93,000 PR applications a year. It is understood that it conducts face-to- face interviews, document checks and background screening. An average of 30,000 applications were approved each year.

Over the same period, an average of 32 foreigners were convicted each year for making false statements in their applications, the ICA said. Most were caught before PR status was granted.

The widow's niece, Madam Hedy Mok, 60, has applied to the courts to strip Mr Yang of the Lasting Power of Attorney (LPA) handed to him by Madam Chung in 2012. The widow has also decided to revoke the LPA via the Office of the Public Guardian (OPG). But the OPG wants to first assess her mental capacity. She was diagnosed with dementia this year.

The OPG has filed a court application to suspend Madam Mok's and Mr Yang's legal roles in the widow's welfare, so that it can order an independent medical assessment. The application will be heard today.

kcarolyn@sph.com.sg

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Ex-guide hired recruitment firm to apply for work pass

Straits Times
16 Oct 2014
Toh Yong Chuan & Carolyn Khew

It provided him with secretary who is on the books of more than 1,000 local firms

CHINESE national Yang Yin was so determined to make a new life in Singapore that he hired a specialised recruitment firm here to set up his company and apply for an Employment Pass (EP), as a prelude to getting permanent resident status.

The studio's address is listed as the bungalow of the wealthy widow who handed control of her $40 million worth of assets to the former tour guide in 2012, after he became a Singapore PR.

Back in March 2009, local recruitment firm Rikvin helped Mr Yang set up the Young Music and Dance Studio, with him as managing director.

A month later, the firm applied for an EP on Mr Yang's behalf. The application was turned down. But Rikvin's second attempt on Mr Yang's behalf, in September that year, was successful, according to Straits Times checks.

By then, Mr Yang was already ensconced in the $30 million Yio Chu Kang home of Madam Chung Khin Chun, 87, the woman at the centre of a legal storm involving Mr Yang, 40, and her niece Madam Hedy Mok, 60, who believes he manipulated her aunt into giving him Lasting Power of Attorney (LPA).

The rest of his family moved in last year.

When The Straits Times visited Rikvin's Equity Plaza office this week, its chief operating officer Satish Bakhda confirmed that Mr Yang was one of its 4,000 clients.

In court papers last month, Mr Yang, who befriended Madam Chung when he was her personal guide in Beijing in 2008, said that she had invited him to Singapore to look after her and wanted him as her "grandson".

"The company was incorporated so that I could run a business and obtain my Singapore permanent residency," he said.

Mr Bakhda told The Straits Times that while he, personally, had never met the man, Rikvin's services to Mr Yang were totally above board.

The firm also provided him with professional secretary Lim Soh Sea.

Ms Lim, 44, is company secretary to more than 1,000 local firms, according to Accounting and Corporate Regulatory Authority (Acra) records. She met Mr Yang for the first time only two weeks ago, when he went to the office to pick up some files.

When asked if his firm had scrutinised Mr Yang's application, Mr Bakhda said that it was not its place to do so.

"Who am I to say, 'What are you going to do (with the company)?'" said Mr Bakhda.

He added that while Rikvin helped Mr Yang to submit annual accounts to Acra through his firm, "we did not do its accounts".

When reporters visited Madam Chung's home last Saturday, the only instrument in sight was a dusty piano with rusted hinges and uneven keys. Indonesian maid Surti, 43, who has worked for Madam Chung since 2007, said she heard Mr Yang run his fingers over the piano once.

Retired teacher Chang Phie Chin, 84, a good friend of the widow who used to live with her at the bungalow, said in court papers that Mr Yang's company was a "sham".

Meanwhile, a court hearing yesterday on two applications by Madam Chung's niece, Madam Mok, was adjourned until Oct 29.

Madam Mok had earlier applied to be appointed her aunt's deputy with full powers - which would allow her to decide on all of Madam Chung's matters. She also applied to revoke Mr Yang's LPA.

The Family Court will be hearing a separate case tomorrow brought by the Office of the Public Guardian to determine whether Madam Chung has the mental capacity to revoke the LPA she granted Mr Yang in 2012, which she now wants to do. She was examined by an Institute of Mental Health medical expert yesterday, as ordered by the court.

Mr Yang also faces separate investigations by the police for suspected criminal breach of trust, and by the Immigration and Checkpoints Authority and Manpower Ministry on how he obtained his permanent residency and EP, among others.

tohyc@sph.com.sg

kcarolyn@sph.com.sg

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S'porean stuck in London over bitter divorce

Straits Times
09 Oct 2014
Joyce Lim

Man in custody battle had passport impounded after wife accused him of rape

A SINGAPOREAN man undergoing a bitter divorce in London has found himself stuck in the British capital, unable to return home, even as his son was forcibly taken from his parents' home in Singapore two months ago.

His Mongolian wife had entered Singapore illegally, defied a Singapore Family Court order and tried to smuggle their two-year-old son overseas, which saw her jailed for 10 weeks last month. Both parents cannot be named under the law, to protect their son's identity.

The ongoing divorce proceedings and furious custody battle caused Ben (not his real name) to lose his bank executive job. It also led to him being jailed and ordered by a British court to stay out of his own apartment in London.

Ben, 36, is unable to return home to Singapore as his passport was impounded after his wife alleged that he had raped her during their marriage.

Speaking to The Straits Times from London, he said he fears for his son's safety, as he believes his wife and her accomplices would "keep trying to take his son away until they succeed".

On Tuesday, his wife, who was living in London on a spouse dependent pass, was released on remission and deported to her home country, Mongolia.

The 30-year-old had admitted to entering Singapore illegally on Aug 19, and hiring a catamaran in Malaysia to try and get the boy out of the Republic.

Her accomplices - Adam Christopher Whittington, 38, British managing director of Child Abduction Recovery International, and Australian Todd Allan Wilson, 39, who owns the vessel - were jailed 16 weeks and 10 weeks respectively. The court had heard how Ben's wife and Whittington went to his parents' apartment and took their child by force, leaving the elderly parents hurt after they put up a struggle. Ben's wife eventually took the boy away.

Giving his side of the story for the first time, Ben said: "It was past 1am when I received a phone call from my mother, who was hysterical. She told me that she and my father were assaulted by an unknown Caucasian man at the lift landing just outside their apartment... I was very distressed as I was stuck in London, unable to come home to my family's aid in their hour of need."

Following his wife's arrest, Ben applied to the British High Court to release his passport so he could return to care for his family, but was told there was a shortage of judges, so his application could not be heard. When he returned last month, a judge told him he had not read the documents, and that the court also wanted to wait until his wife was released from prison.

Ben said his son, who is still in his parents' care, had recurring nightmares for weeks after the incident, but is generally doing well. He said: "She (his wife) had wanted to subject him to a long boat trip from Singapore to Langkawi, without any proper clothing or food. What kind of mother would do such a thing?"

Ben said he met his wife in a bar at Singapore's Hyatt Hotel in December 2010 and they married here in June 2011. They moved to London in October 2011, and their son was born in July the next year. According to Ben, their marriage fell apart early last year because his wife was frequently violent towards him.

In July last year, the couple took their son back to Singapore, to Ben's parents. They returned to London by themselves a month later. In January this year, Ben filed for divorce in Singapore. His wife then started her divorce proceedings in London. Ben has since taken out an order from a Singapore court to restrain her from taking their child out of the country.

Meanwhile, she has obtained an order from the British court for the return of their son. However, Ben said that he is unable to travel to effect the return of the child, as a result of the passport order.

His parents have refused to return the child to Britain and have also taken out court proceedings to have custody of their grandson.

joycel@sph.com.sg

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Insurers get more time to adapt to new rules

Straits Times
03 Oct 2014
Mok Fei Fei

One-year grace period for sector to familiarise itself with remuneration system

INSURERS and financial advisory firms will be given more time to fall in line with a new framework to be used in assessing the performance of their sales staff and how they are paid.

The Monetary Authority of Singapore (MAS) said in a statement yesterday that it will "provide the industry with a one-year grace period to familiarise themselves with the framework before effecting the requirements in legislation in January 2016".

The initial target for the new remuneration framework to take effect was January next year, after the MAS accepted most of the recommendations by the Financial Advisory Industry Review (Fair) panel in September last year.

While firms still have to put in place the new framework from Jan 1 next year, penalties will not be imposed during the first year of implementation.

Enforcement will start in January 2016 to give the industry time to adjust to the new model and for MAS to fine-tune the requirements where necessary.

Known as the "balanced scorecard" approach, the new framework will take into account non-sales factors in determining the pay of the agents and their supervisors.

If the agent is deemed to have failed in areas such as not selling suitable products or not giving adequate information to the customer, they could lose their variable pay, while their supervisors' pay could also be cut. This represents a marked change from the current system where advisers are mostly paid based on their sales results.

The MAS gave the update in a consultation paper on the legislative changes needed to implement the Fair initiatives. Good progress is being made in the key initiatives, it said, including the launch of a direct sales channel for basic life insurance products early next year.

A new comparison website, where consumers can check out the premiums and features of the various insurers' life insurance products, is also slated to be ready in the first quarter of next year.

MAS assistant managing director Lee Boon Ngiap said in the statement: "MAS will look to the board and senior management of financial institutions to set the right tone and promote a culture of fair dealing in their companies.

"Through the Fair initiatives, consumers can look forward to a financial advisory industry that puts their interests first, delivers quality advice, and enables them to better meet their financial and life goals."

Industry players said the grace period for the balanced scorecard framework is necessary as firms need more time to tweak their systems.

Mr Leong Sow Hoe, the chairman of Insurance and Financial Practitioners Association of Singapore Alliance, said: "The compensation system in the companies has always been to pay out money to their advisers, never been to claw back the compensation.

"There's a lot of complexity involved in how much to claw back for what kind of infraction, and companies' respective systems are not ready, so giving them more time is good."

The president of the Association of Financial Advisers Singapore, Mr Vincent Ee, said: "This concerns the earnings of the advisers. Since it will affect their finances, it's better to get it right."

Both Mr Leong and Mr Ee also said most agents are prepared for the change ahead, pointing out that only a small minority of errant advisers will be affected by the remuneration framework.

Comments on the draft legislative provisions and amendments should be submitted by Nov 3.

feimok@sph.com.sg

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Judge urges caution in hiring of experts

Straits Times
15 Oct 2014
K.C. Vijayan

Careful thought needed before doing that in accident cases, thus saving costs

A JUDGE has urged parties in road accident cases to think carefully before hiring experts to shore up their cases, and save on costs.

Noting that there is an increasing reliance on such "reconstructionist experts", Justice Choo Han Teck said lawyers must "appreciate the kind of evidence and advice that experts provide" so that legal costs can be saved.

His remarks came when he dismissed a taxi driver's bid to pin some blame on an accident victim.

Justice Choo ruled that taxi driver Asnah Rahman was 100 per cent to blame for the accident which seriously injured then national serviceman Li Jianlin, 21, at a pedestrian crossing.

Mr Li was walking along the crossing in Bukit Batok West Avenue 5 on June 11 at about 10pm with the crossing lights in his favour when he was knocked down by the taxi driven by the defendant.

For dangerous driving, Madam Asnah, 58, was fined $2,400 and disqualified from driving for six months by a district court in 2012.

At issue in the High Court was whether Mr Li should be apportioned any blame before damages payable for the accident could be assessed.

His lawyer, Mr Eric Liew, argued that Mr Li did not contribute in any way to the accident.

The cab insurer's lawyer, Mr Anthony Wee, had produced an expert's report which said Madam Asnah's view of the incoming pedestrian was blocked by the railings on the road divider and that the curve of the road created a "stroboscopic effect" on her vision at the time of the accident.

Justice Choo said "even if these were true, they are red herrings".

"She cannot beat the red light even if no pedestrian was crossing," he added, noting the lights were against her for a long time.

Justice Choo said photographs and sketch plans can be obtained from police and, if a party disagrees, he is entitled to produce evidence of his version. But this kind of evidence is evidence of fact and may not require an "expensive 'reconstructionist' expert to produce", he said.

He noted that the opinion of an "expert" is also sought as to how the accident happened and who was at fault. "With respect, this is precisely the issue for the court to determine, and, unlike specialist medical cases, the court in traffic accident cases will be relying on the same evidence the expert relies on in determining how the accident occurred."

The judge also dismissed the suggestion that the victim's clothing might have made him poorly visible at the time of the accident.

The judge noted that Highway Code rules suggested that pedestrians should wear white or at least carry items that make them more visible in unlit roads at night.

But to insist that the victim wear high-visibility clothing did not make sense and is not the law, he said. "The courts cannot direct what pedestrians must wear," he added in judgment grounds released last week.

Justice Choo noted that times have changed and pedestrians these days often cross the road with heads down, looking at electronic devices. "Times and practices have changed, but road etiquette is not mere social etiquette. Proper observance of safety precautions can make a difference between safety and injury, or even life or death," he said.

Justice Choo added that the taxi driver as a professional driver should "lead the way in safe and courteous driving".

"There is no reason why they cannot be the role models for other drivers."

vijayan@sph.com.sg


Background Story

Justice Choo Han Teck said photographs and sketch plans can be obtained from police and, if a party disagrees, he is entitled to produce evidence of his version. But this kind of evidence is evidence of fact and may not require an "expensive 'reconstructionist' expert to produce".

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To view the judgment, click <here>.

Ex-tour guide's wife also sued in row

Straits Times
09 Oct 2014
Toh Yong Chuan & Carolyn Khew

A FORMER China tour guide embroiled in a legal battle over a widow's estimated $40 million assets saw his wife pulled into the dispute yesterday.

Madam Hedy Mok, the niece of 87-year-old Madam Chung Khin Chun, received High Court approval to add Madam Weng Yandan, 34, as a defendant in the high-profile lawsuit.

She and her husband Yang Yin, 40, are alleged to have neglected their duties in caring for Madam Chung after he was given legal control of her assets.

Mr Yang befriended Madam Chung while acting as her personal guide on a 2008 trip to Beijing and went to live with her at her $30 million bungalow off Yio Chu Kang Road in 2009. His wife and two children, now aged two and eight, moved in last year.

Madam Weng returned to China last month, but Madam Mok's lawyer Peter Doraisamy said after a pre-trial conference yesterday that she, along with her husband, was also being sued for damages by his client.

Mr Yang claims Madam Chung wanted him as a "grandson". He became a Singapore permanent resident in 2011. A year later, she granted him a Lasting Power of Attorney (LPA), giving him full control of her assets.

When Madam Mok, 60, found out about this, she took her aunt to live with her, evicted the Yang family and began court proceedings, which included suing Mr Yang for allegedly breaching his legal duties.

Madam Chung was diagnosed with dementia earlier this year.

The Office of the Public Guardian, which administers the LPA, has obtained court approval to temporarily suspend Mr Yang's powers under the LPA - along with those of Madam Mok as Madam Chung's deputy - so that the court can decide whether the widow should undergo an independent medical review. A court hearing is set to take place tomorrow.

Mr Yang also faces separate investigations by the police, Immigration and Checkpoints Authority and Manpower Ministry.

The next pre-trial conference is scheduled for Nov 12.

tohyc@sph.com.sg

kcarolyn@sph.com.sg

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SMRT and LTA not at fault: Court of Appeal

Straits Times
02 Oct 2014
Joyce Lim

CJ calls accident a 'tragic misfortune' but upholds High Court's decision

A THAI teenager who lost her legs in a train accident has lost an appeal against an earlier court decision that found rail operator SMRT and the Land Transport Authority (LTA) not at fault for her injuries.

Yesterday, the Court of Appeal dismissed 18-year-old Nitcharee Peneakchanasak's claim that SMRT and LTA had been negligent for failing to ensure the safety of commuters at Ang Mo Kio MRT station, where a train had run over the teen's legs after she fell onto the track in 2011.

Chief Justice Sundaresh Menon, who made up the court with Judges of Appeal Chao Hick Tin and Andrew Phang, called the accident a "deeply tragic misfortune".

The Chief Justice said that Justice Vinodh Coomaraswamy's 82-page written judgment in January showed that he had carefully analysed the circumstances and was correct in his conclusion.

Citing Justice Vinodh's judgment, the Chief Justice said "the law does not require the defendant to take every step and to expend every conceivable resource to eliminate every risk in the name of safety".

Lawyer Peter Low, who represented Nitcharee in her appeal, argued that the chances of someone accidentally falling onto the track was a foreseeable risk on the minds of the defendants.

And such risk was eliminated after half-height platform screen doors were installed after the accident, he added.

His claims were dismissed by Justice Phang, who said absolute safety standards were impossible in an "imperfect world".

Nitcharee, who was suing through her father Kittanesh Peneakchanasak, had lost her claim of $3.4 million in damages in the High Court in January. She was ordered to bear the costs of the trial, including the defendants' lawyer fees and the fees of expert witnesses who testified during the 12-day trial in 2012.

Yesterday, the defendants' lawyer, Mr K. Anparasan of KhattarWong, said his clients would not be pursuing the costs "out of compassion, sympathy and goodwill". He estimated the costs, including that of the Court of Appeal hearing, could come close to $400,000.

In July, Nitcharee, who had prosthetic legs fitted in Bangkok after the accident, met representatives from SMRT and LTA for a mediation session, accompanied by her father and Singaporean guardian Christopher Bek.

Despite losing the lawsuit, the teenager was offered $50,000, said Mr Bek.

But Nitcharee decided to go ahead with her appeal.

Speaking to the media outside the Supreme Court yesterday, Nitcharee, fighting to hold back her tears, thanked Singaporeans for their support and generosity.

She had received more than $400,000 from donors from Singapore and elsewhere for her medical expenses.

"After so many years of anxiety, I am quite relieved now that the case has came to the final chapter," she said in Thai, through her friend, Ms Umparin Boonsinsuk.

"I want to go back to Thailand to study and, if the opportunity arises, I would like to learn more about English law and international law," said Nitcharee, who was in a wheelchair.

Mr Bek told The Straits Times that though Nitcharee does not have to pay the defendants' costs, she had borrowed money from relatives and friends for the appeal.

Nitcharee told The Straits Times last night: "I wish I could get the $50,000 in compensation that I had earlier rejected."

joycel@sph.com.sg

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Restaurant chains back in court again

Straits Times
15 Oct 2014
Selina Lum

Soup Restaurant claims Dian Xiao Er overstayed on its premises in VivoCity after sublease ended

RESTAURANT chains Soup Restaurant and Dian Xiao Er are fighting in court again, following a legal battle in 2012 which ended with the two previously related businesses going their separate ways.

The current fight is over 69 sq m of shop space - a part of the Soup Restaurant outlet at the VivoCity mall it had sublet to its next-door neighbour, herbal roast duck chain Dian Xiao Er.

The two restaurants leased their premises separately from the landlord, VivoCity.

However, in 2009, Dian Xiao Er wanted to expand and asked for additional space from Soup Restaurant, which at the time was its parent company. Dian Xiao Er used the sublet space to expand the dining area and the kitchen of its restaurant.

Now, Soup Restaurant, which is known for its samsui ginger chicken, is alleging that Dian Xiao Er remained unlawfully on the premises for two years as it refused to move out when the sublease came to an end in October 2012.

Dian Xiao Er, however, contends it was entitled to stay as there was an automatic renewal of the sublease after its expiry.

However, it handed back the space to Soup Restaurant on Oct 1.

A four-day trial started in the High Court yesterday to determine whether Dian Xiao Er's parent company, YES F&B, is liable to Soup Restaurant for unlawful possession.

The case hinges on the court's interpretation of the sublease agreement - whether it came to an end as claimed by Soup Restaurant or was automatically renewed as claimed by Dian Xiao Er.

If Soup Restaurant wins, it will ask for an order that Dian Xiao Er give an account of its profits during the unlawful stay.

It is seeking damages, to be assessed by the court, including rent, potential loss of profits, and interest.

The Soup Restaurant group was the majority shareholder of Dian Xiao Er for six years from 2006. The other 49.02 per cent was held by the married couple who founded Dian Xiao Er.

In 2010, the couple sued Soup Restaurant, alleging minority oppression. The dispute was eventually settled in 2012, with the couple buying over Soup's stake.

The Dian Xiao Er outlet at VivoCity started operating in October 2006; Soup Restaurant took up the space next to it in October 2009. However, their lease agreements with VivoCity were independent of each other.

On Oct 18, 2012, when Soup Restaurant's lease expired, it signed a new lease. Its lawyer, Mr Edwin Tong, argued that the termination of the head lease must result in the sublease coming to an end.

But Dian Xiao Er, represented by Mr Adrian Tan, argues the opposite - that its sublease with Soup was also renewed when the latter signed a new lease.

selinal@sph.com.sg

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Changes to Act involving arts entertainment passed

TODAY
09 Oct 2014
Laura Elizabeth Philomin

SINGAPORE — Amendments to the Public Entertainments and Meetings Act (PEMA) were passed in Parliament yesterday, as part of efforts to keep the Act relevant in the face of evolving entertainment landscape.

Minister for Communication and Information Yaacob Ibrahim outlined the key changes to fine-tune the Act, including expanding its scope to regulate arts entertainment performances that are streamed live or in real time to audiences in Singapore.

“The same regulatory principles should apply regardless of whether an arts entertainment is performed physically or virtually staged, so that younger viewers are protected and consumers can make informed viewing choices,” he said.

With the amendments, all forms of arts entertainment will require classification by the Media Development Authority (MDA), regardless of whether the arts entertainment or public entertainment licence is issued by the MDA or the police, respectively.

Currently, arts classification ratings from the MDA are not required for arts performances in public entertainment establishments, such as bars or pubs.

Acknowledging that this may introduce a regulatory burden on businesses, Dr Yaacob said there will be a clause that allows the Ministry of Communications and Information to grant exemptions for certain genres of arts entertainment that the MDA has no content concerns with.

The Amendments Bill was thrown into the spotlight recently during public consultations, especially on the self-classification or Term Licensing Scheme. Following strong reactions from the arts community, the MDA eventually decided to scrap the idea.

Speaking in support of the Bill, Member of Parliament Zaqy Mohamad (Chua Chu Kang GRC) said the MDA should not give up on the idea of co-regulation. Dr Yaacob said while it has no plans to pursue co-regulation for now, the MDA will continue its engagement efforts with arts groups.

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

Preserving ties after break-ups a key role of new family courts: CJ

TODAY
02 Oct 2014
Kok Xing Hui

Committee also looking into accreditation, specialised training for family lawyers

SINGAPORE — Noting that certain familial ties often have to continue even after a family breaks up, Chief Justice Sundaresh Menon said the new Family Justice Courts will better ensure these relationships are preserved after the case exits the courtroom.

Officially opened yesterday, the new body of courts — comprising the High Court’s Family Division, the Family Court and Youth Court — will hear all family-related proceedings, ranging from divorce and family violence, to adoption and guardianship. From January next year, probate cases will also fall within its jurisdiction.

The shake-up resulted from the recommendations of a high-level committee looking at how to make the family justice system less stressful and acrimonious, as well as place the interests of children who are caught in the conflict front and centre.

Speaking at the opening ceremony yesterday, CJ Menon said by bringing the entire range of work under one judicial roof, judges will be able to consider all the issues resulting from or related to family disputes within the broader narrative of the family and its history instead of as isolated occurrences.

“This is a potent consideration in the context of family work, because social science research informs us that family disputes are a function of, and often bring in their wake, a variety of other associated family issues,” he said. “After a divorce, ex-husbands are still fathers and ex-wives are still mothers. Even after contending that a parent lacks mental capacity, sons and daughters remain sons and daughters. After disputing over the assets of their deceased parents, brothers and sisters are still bound by familial ties.”

Changes under the new Family Justice Act enacted in August this year include a shift away from an adversarial approach to one where the judge will drive the direction of the hearing. In particular, judges will be empowered to order estranged parties to focus only on relevant issues, rather than file lengthy affidavits of their respective latent grouses. They will also have the power to direct parties to attend counselling and/or mediation to resolve their disputes, as well as appoint a Child Representative to give them a “louder and more forceful voice”, in the words of CJ Menon.

A new set of Family Justice Rules detailing these changes to judicial processes, as well as bringing together the Rules of Court and Matrimonial Proceedings Rules, is expected to be issued next year.

In addition, Justice Andrew Phang is chairing a committee looking into the implementation of an accreditation scheme for family lawyers. Doing so would ensure they would be “properly equipped” to practise in the new family justice landscape, said CJ Menon.

In its report published in July, the Family Justice Committee suggested an accreditation programme so that lawyers practising family law can do so “in a manner that is consistent with and promotes the ethos of the new family justice system”.

While training should not be compulsory, the committee said it would be desirable for family lawyers to go through specialist training comprising modular courses in non-court dispute resolution methods, the judge-managed approach and less adversarial techniques in family litigation, as well as non-legal aspects of family cases such as the availability of social support services.

Family lawyers TODAY spoke to welcomed the idea of accreditation. Ms Malathi Das from Joyce A Tan & Partners said it will empower family lawyers to keep up with new processes and new modes of family law.

Another family lawyer, Mr Raymond Yeo, said: “Practising family law is a very specialised area and there should be specialised training and accreditation for practitioners who want to specialise in this area.”

Meanwhile, Judicial Commissioner Valerie Thean, the Presiding Judge of the Family Justice Courts, said in her speech yesterday that while there will be changes in the sweeping reforms, none should cause alarm or anxiety.

Rather, the changes to the system will “fully actualise the promise of our past work”.

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

The case for managing Reits internally

Business Times
15 Oct 2014
Bobby Jayaraman

MAS' proposed enhancements of Singapore's Reit sector are timely, but the sector needs to beef up governance to win wider acceptance and investors' confidence

[Singapore] AFTER a long wait, the Monetary Authority of Singapore (MAS) has finally come out with proposed enhancements to the Reit regime in Singapore. The enhancements, while encouraging greater accountability and transparency of Reits, are unlikely to materially change the Reit landscape here.

The only way for S-Reits to gain full investor confidence is if they are internally managed with the full weight and accountability of an experienced team. Major US Reits such as Kimco, Taubman and Vornado are helmed by their founders with significant stakes in the Reits. Investors in such Reits are able to benefit from an experienced and dedicated executive team whose interests are fully aligned with theirs. These Reits have greater leeway in terms of leverage, geographical diversification and their ability to develop properties than S-Reits, but the reason for this is in large part due to the quality of their internal management and the trust it engenders among investors. Despite higher operational risks relative to S-Reits, most major US Reits trade at low yields of around 2.5 per cent to 4 per cent, versus more than 5 per cent for S-Reits.

Link Reit, listed in Hong Kong, is a good example of a Reit that has benefited from being internally managed. It is the largest in Asia and usually trades at sub-4 per cent yields (despite its mostly leasehold properties), unlike other externally managed Reits in Hong Kong, which trade upwards of 5.5 per cent. Link Reit has a deep management pool with high inside ownership of shares. Despite a very low leverage of 11 per cent to 12 per cent and a mere three acquisitions since listing in 2005, it has managed to show double-digit DPU growth year after year.

In contrast, S-Reits - despite more than a decade of existence - continue to be managed on a fee basis by a separate company with a small team. There is virtually no inside stock ownership in some Reits; even in the bigger ones, many CEOs have only a token ownership. Quality of management is another major issue; it is unlikely that a three- to four-person outfit managing a small portfolio can attract high-quality real-estate talent.

Such drawbacks of externally managed Reits are a major factor keeping S-Reits from trading at higher valuations and attracting a larger investor base; for example, Ascendas Reit, one of the oldest and largest S-Reits, has a mere 8,500 unit holders, despite high-quality properties with sustainable cash flows.

I would urge the MAS to at least test a single case of an internally managed Reit along the lines of Link Reit so investors can see the difference for themselves.

The next best option to an internally managed Reit is an externally managed one with a structure that aligns with investor interests as far as possible. In this context, let us look at some of the major (in my view) enhancements proposed recently by the MAS.

Fee structure: The fee structure should be such that the management team is paid reasonably for the day-to-day work and is incentivised to create long-term value for unit holders. The base fee currently paid to Reit managers is a fixed percentage (usually 0.3 per cent to 0.5 per cent) of the value of the properties. However, just increasing the size of the asset base does not mean proportionally more work for the management; nor does it automatically create any value for investors. For example, a S$500 million increase in property base - assuming a 0.5 per cent base fee on deposited property - increases the annual base fee by S$2.5 million; does the Reit really incur S$2.5 million of extra costs per annum to manage the expanded property portfolio? Moreover, many Reits - industrial Reits in particular - rent out the properties under master leases, which entail minimum costs and management effort at the Reit level. Base fees should only be increased if there is an actual increase in the costs required to manage a property portfolio. It should not be used for profit-making. Property value increases due to higher valuations should also not merit increased base fees.

The performance fee is best linked to a combination of DPU and share price growth. ( DPU is preferable to NAV as it is actual cash in hand; NAV depends on property valuations, which are a subjective assessment by property valuers.) Reits that try to increase DPU growth using undue leverage to acquire properties or borrow funds for dividends will suffer a hit to their share price and, in turn, their performance fees.

Acquisition and divestment fees are best determined on a cost-recovery basis as proposed by the MAS, rather than the current practice of a fixed fee. The goal of the Reit manager is to increase the DPU for unit holders on a sustainable basis; whether this is done through asset enhancements, rentals reversions or acquisitions is left to the judgment of the Reit manager, for which he or she is already compensated and hence does not require a separate fee.

Leverage limit: The proposed leverage limit of 45 per cent is on the high side. S-Reits calculate leverage based on the latest property valuations, which usually increase over the years; in a bull cycle, they increase on a monthly basis! Thus it can be argued that leverage is usually understated on a Reits balance sheet, as property appraisers tend to get carried away with valuations during an up-cycle. To avoid undue risks during down cycles, it might be more prudent to bring down the allowable leverage limit to 40 per cent or incorporate maximum limits for interest coverage ratio (for example, >4) and net debt to EBITDA (for example, <6). It is not necessary for a Reit to gear up heavily to create value for unit holders; as mentioned before, despite a low leverage, Link Reit has created tremendous long-term value for shareholders.

Development limit: In my view, it is best to keep the development limit at its current level of 10 per cent. Most Reits undertake periodic and intensive asset enhancement to increase rentals. If done creatively, this is enough to grow DPUs in a sustained way. Investors do not want Reits to turn into pseudo property developers. The Singapore Exchange is full of property developers of all shapes and sizes and anyone wanting exposure to this activity has no dearth of opportunities. Increased property development activities will lead to higher-leverage, cyclicality risks and more complex balance sheets taking away from S-Reits the one big thing in their favour - simplicity.

Income support: How many investors would buy a condo in Sembawang at the price of an Orchard road condo if the seller offers to pay three years of Orchard Road-level rentals? Not many, I would think. However, the same investors would likely have no qualms buying into Reits that use the same idea.

Reits were established to provide stable long-term income for investors; thus any asset that has not stabilised to its normal earning power should not be injected prematurely into a Reit. Reit sponsors have, many a time, taken advantage of income support to unload assets to their Reits in highly uncertain times (for example, Keppel Corp's disposal of Ocean Financial Centre to K-Reit at the height of the Euro crisis in 2011).

The Singapore property market is highly cyclical. There is no reason to believe that a new office building will "stabilise" over the next two or three years and start earning higher rentals. Depending on the supply-demand situation at that time, rentals might just as easily move in the opposite direction as has happened umpteen times before. Unfortunately, no amount of disclosure on income-support arrangements by the Reit will be of much use as few investors look beyond the headline yields.

I would like to propose other investor-friendly enhancements for the MAS to consider:

Share buybacks: Make it mandatory for all Reits to obtain share-buyback mandates and use them aggressively when share prices fall below stated NAV. This would serve two purposes: Investors would be assured that the Reits' NAVs are real and they would get higher DPUs as the number of outstanding units decrease. This would also discourage Reit managers (and their valuers) from using aggressive cap rates to inflate valuations and thus, the NAV. There have been cases in the past where Reits trading below book have made marginally yield-accretive acquisitions when the far better use of their cash would have been to simply buy back their shares and increase DPUs for investors.

Scrip dividends: Disallow scrip dividend scheme for Reits. The central purpose of a Reit is to provide regular and sustainable cash income to unit holders and there should be no need for a well-managed Reit to resort to scrip dividends under normal market conditions. Reasons given by Reits such as need to "conserve cash" or to reduce investor "transaction costs" are weak arguments that do not make up for the constant dilution suffered by investors that opt for cash instead of scrips. Consistently having to pay cash to investors will encourage Reits to practise good capital management.

MAS' proposed enhancements to strengthen the Reit sector are timely. As Singapore's Reit sector matures, it needs to get to the next level in terms of governance to instil greater investor confidence and gain wider acceptance.

The writer is a private investor and author of 'Building Wealth Through Reits'

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

S'pore plans world court for commercial cases by 2015

Straits Times
08 Oct 2014
K.C. Vijayan

Amendments also to introduce new regulatory system for legal profession

PLANS to set up an international court here by early next year to handle commercial cases were tabled in Parliament yesterday in a bid to turn Singapore into Asia's No. 1 venue for dispute resolution.

The Singapore International Commercial Court (SICC), as it will be called, will draw its judges from eminent international jurists and Supreme Court judges, and give local lawyers the chance to work on high-value cross-border disputes which otherwise would not have been heard here.

Amendments that will introduce a new regulatory framework for the legal profession here were also read for the first time in Parliament. A new Legal Services Regulatory Authority, which will come under the Ministry of Law, will be set up to regulate all law firms and foreign lawyers, who will also be subject to the same disciplinary process as their local counterparts.

It will also be made compulsory for all Singapore lawyers to reveal the hours they spent doing pro bono work in the preceding year when renewing their practising certificate. The statistics, it is believed, will be used to monitor how much lawyers are contributing back to society.

Law firms here welcomed news of the SICC, which is set to build on Singapore's success in arbitration. The country is the world's third most preferred seat of arbitration, behind London and Geneva. The caseload is predominantly international, with more than 80 per cent of cases involving at least one foreign party. Last year, the Singapore International Arbitration Centre (SIAC) heard 259 disputes, valued at $6.06 billion in total.

Mr Alastair Henderson, managing partner for South-east Asia of global law firm Herbert Smith Freehills, said Singapore has won international respect for the success of SIAC, and the new court is the next logical step in its ambition to offer a complete suite of dispute resolution services.

"It is an essential component of this wider plan to be Asia's dispute resolution hub. The SICC will be an internationally respected court that can handle the largest and most complex international disputes, without the limitation of needing consent (from all parties concerned as is required in arbitration) for its involvement."

The SICC will be set up as a division of the High Court - which means its decisions can be enforced as judgments of the Singapore Supreme Court, while decisions can be appealed to the Court of Appeal (CA).

The proposed legislative changes also provide for international judges to be hired to hear SICC cases, as well as allow former High Court judges to be appointed as Senior Judges to hear High Court, SICC or CA cases.

This will empower the Chief Justice to call on such judges where needed to ease the hearing load of the court and to tap into particular areas of specialist legal expertise of retired judges.

vijayan@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Blumont's ex-director declared bankrupt

Straits Times
02 Oct 2014
Grace Leong

FORMER Blumont Group executive director James Hong has been made bankrupt.

He was one of several executives and directors asked to assist in the probe by the Commercial Affairs Department (CAD) into the penny stock crash in October last year.

In July, Blumont announced that Mr Hong, 47, had resigned as its executive director for "personal interest and reason".

Four days after his resignation took effect on July 20, he was made bankrupt.

A notice published on Aug 15 in The Straits Times by the Assistant Official Assignee Davyd Chong said a bankruptcy order had been made against Mr Hong on July 24.

Mr Hong was made bankrupt at the instigation of Bank of East Asia over a $3 million debt, according to bankruptcy records.

Bankrupts cannot become a company director without approval from the Official Assignee, which manages their affairs.

The Monetary Authority of Singapore and CAD are investigating suspected false trading and market rigging after shares of Blumont, Asiasons Capital and LionGold Corp skyrocketed between 40 per cent and 160 per cent last August and September before plunging over a few days in October, erasing more than $8 billion in market value.

Blumont and LionGold are among eight mainboard-listed companies and several executives being probed for possible breaches of the Securities and Futures Act. The wider penny stock sector has also been hit.

And Bank of East Asia was not the only party that had sought to make Mr Hong bankrupt.

UOB, according to bankruptcy records, was the first to file a bankruptcy petition against him in January this year over a $244,749 debt.

The Straits Times understands that UOB withdrew its application after Mr Hong made a full settlement to the bank the next month.

Phillip Securities also filed a bankruptcy application against him in July over a $1.78 million debt, but the brokerage withdrew its application after the Bank of East Asia won the bankruptcy order.

Meanwhile, Mr Hong is also embroiled in lawsuits with other banks.

Royal Bank of Canada (RBC) obtained summary judgment against Mr Hong in August in the amounts of $21.5 million and US$611,402 (S$779,862), while Maybank sued him over $435,320 owed. RBC, in court papers, said he had allegedly refused to pay after shares in the penny stock trio, held as security, tumbled in the stock rout.

Mr Hong also lost a case he had brought in London against investment bank Goldman Sachs for failing to get a fair price when it force-sold his shares in the three firms during the stock rout.

London's Commercial Court ruled in favour of Goldman in July after Mr Hong withdrew his claim before a trial.

He had accused Goldman of breaching its duties by "arbitrarily" selling his shares that it held as collateral after a margin call.

He alleged that the bank had issued a demand notice, giving him less than two hours to raise more than $60 million to cover his loan. Mr Hong failed to meet the deadline and was deemed to have defaulted on his loan obligations. This triggered the force-selling last October. The bank denied the allegations and countersued for �8.8 million (S$18.2 million), alleging Mr Hong's lawsuit was a "tactic" to delay paying the money he owed.

gleong@sph.com.sg


Background Story

WEB OF LAWSUITS

Made bankrupt by Bank of East Asia, according to an Aug 15 bankruptcy notice in The Straits Times.

UOB, according to bankruptcy records, was the first to file a bankruptcy application against him in January over a $244,749 debt. But UOB withdrew its application after he made a full settlement the next month.

Phillip Securities also filed a bankruptcy application against him in July, but the brokerage withdrew its application after the Bank of East Asia won the bankruptcy order.

Royal Bank of Canada obtained summary judgment against Mr Hong in August in the amounts of $21.5 million and US$611,402.

Malayan Banking Berhad sued him over $435,320 owed.

Mr Hong sued Goldman Sachs for failing to get a fair price when it force-sold his shares in Blumont, Asiasons Capital and LionGold Corp during the stock rout. But he withdrew his claim. He had accused Goldman of breaching its duties by "arbitrarily" selling his shares that it held as collateral after a margin call. The bank countersued for �8.8 million, alleging Mr Hong's lawsuit was a "tactic" to delay paying the money he owed.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

S'pore firm in Vanuatu airport saga clears the air

Straits Times
15 Oct 2014
Karamjit Kaur

It says it bagged contract fairly and country's new govt is keen on project

A SINGAPORE firm mired in controversy after landing a mega deal to build a new airport in Vanuatu says it has done nothing wrong.

Since July last year when Singapore-registered Vanuatu Trade Development agreed, in a deal with the South Pacific republic, to pump an initial US$350 million (S$445 million) into the project, it has come up against obstacle after obstacle.

First, several Vanuatu politicians protested against the government's decision to award the contract to a firm which they said had no aviation background. Then came a change in government, with the new leadership reportedly ditching the project altogether. Along the way, local media also suggested there was no proper competitive tendering process, putting into question the contract's validity. It was also reported that the Singapore company intends to sue the Vanuatu government.

Clearing the air for the first time since the saga went public, businessman David ak, 50, managing director of Vanuatu Trade Development, told The Straits Times the reports were not true.

The new government was keen on the project, he stressed.

He also did not think any lawsuits would be necessary.

The Straits Times understands that if the contract is not honoured, his firm can sue the government for US$350 million, the initial investment amount pledged.

But Mr Mak, also the country's consul in Singapore, said: "We are committed to this project and committed to growing Vanuatu's economy so I don't even want to think of that and I do not believe we will get to that."

Admitting, however, that the project has stalled, he added: "We are not quite sure what the problem is and why the stalemate, but I have met the new prime minister and he is keen on the project."

He is now trying to get details from the new government on plans going forward and when work can start.

Comprising over 80 islands, Vanuatu has over 220,000 inhabitants and has been run by Prime Minister Joe Natuman since May. It could choose to upgrade its existing airport, rather than build a new one. Vanuatu officials could not be reached for comment.

Mr Mak, who has stakes and management positions in several other firms, including agriculture firm Rock International Tobacco, was invited by the Vanuatu government to explore ways to develop the country's agriculture sector and economy two years ago. Discussions led to plans to build a new two-storey international airport, as well as a nearby town with hotels and housing.

Mr Mak said his firm, which was up against several others, including developer Shanghai Corporation, bagged the contract fairly. "We were picked because ours was the best proposal; a 50-year deal to build, operate and then transfer the airport back to the government. This way, the government does not need to spend, and we recover our investment from operating the airport."

He added that while other firms had proposed upgrading the existing airport, his company - a consortium of industry aviation and construction heavyweights - was willing to fund a new "airport city". His partners include aviation services company Hermsley, Leading Edge Aviation Planning Professionals, engineering firm Mott MacDonald and architectural firm Woods Bagot, he said.

karam@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Bill on remote gambling passed

Business Times
08 Oct 2014
Malminderjit Singh

[Singapore] PARLIAMENT on Tuesday passed the Remote Gambling Bill after the House debated the draft legislation for three hours, in particular, homing in on its allowance for exemptions. Several of the 10 Members of Parliament (MPs) who spoke expressed concern on the need for this proposed law, its relevance and its scope and breadth.

Denise Phua (Moulmein-Kallang GRC) argued that the government should reject gambling completely, "whether remote or on-site". She said: "We need a holistic longer-term game plan to reflect our principles and intent. Just as we are bold enough to explicitly stand by principles such as the family is the first port of call for help, and that extra marital relationships are not encouraged, we need to express our stand on licensed gambling in Singapore, whether online or via brick-and-mortar casinos."

Calling for a ban on remote gambling, she was among the MPs who questioned the Bill's exempting licensed operators. "If indeed, we so strongly believe that remote gambling is harmful and does no good to either people or nation, then are we legitimising the act of gambling and breeding its acceptance by legally providing for exempt licensed operators? Does gambling become more noble when operated by a licensed versus an unlicensed operator?"

She asked whether this would entail the government investing further resources down the road to thwart the ill effects of an undesirable social phenomenon; taking a bigger-picture view, she also called on the government to review the place of gambling in Singapore. She said such a review was called for, especially if the casinos were competing with the small and medium-sized enterprises for manpower, given the tightening of the inflow of foreign labour here.

Citing data from 2012 on the 6.2 million visits by locals to the two casinos in Singapore, Ms Phua called for even stricter measures to discourage gambling by residents, including raising the casino entry fee from the current S$100.

Other MPs, such as Workers' Party's Png Eng Huat (Hougang) and Pritam Singh (Aljunied GRC), as well as Non-Constituency MP Yee Jenn Jong, called for the bill to be placed before a Select Committee so that Singaporeans can be convinced of the rationale for tightening the legislation for strong safeguards.

Responding, Second Minister for Home Affairs S Iswaran said that the bill had already undergone public consultations, so it was unnecessary to place it before a Select Committee.

msingh@sph.com.sg


Money's worth and a game of chance

The proposed Remote Gambling Bill is a good move against social ills but it can also hit social games

THE broad goal of Singapore's proposed Remote Gambling Bill is to clamp down on illegal Internet gambling and we think this is a good move by the government. It is a goal we at the International Social Games Association (ISGA), as a non-profit global industry trade association, wholeheartedly support.

Unfortunately, the current draft of the Bill goes beyond the social ill that the law tries to control and puts an entirely separate and legitimate industry in Singapore (and beyond) at great risk: the online social games industry and the innovative technology companies behind them.

To understand how this might happen, let us first explain what social games are, and how they work.

Social games are the latest flowering of a rich human game-playing tradition. Historians and anthropologists tell us that our playing of games was reared in the same cradle as civilisation itself. Today, social games are intricate components of social media technology platforms such as Facebook.

While social games have evolved along with our cultures, they still fulfil the same functions: they help us exercise memory retention, enhance logical skills, and provide a vehicle for social interaction with people from around the world.

Social games are the new kid on the game-playing block. If you don't play social games yourself, you will certainly know someone who does.

We are talking about the kind of social game you might play on your iPhone, Android device, or tablet, probably connected to Facebook and all for free. Players are often given the option to buy special features within a game (known as "freemium") but the vast majority of play is for free.

It won't be long before billions of people play these games globally - all enjoying an easy, fun and simple form of game play and entertainment. There are hundreds of technology companies in Singapore, Asia and beyond that develop these social games.

Just as social games provide important entertainment for millions of players, they are also enormous engines of technological innovation and an important part of the digital economy, both globally and here in Singapore.

According to Deloitte, Singapore's games and animation industries, together with online and mobile media, have shown robust growth from 2006 to 2010. In 2010, it contributed S$1.2 billion in value-added and S$1.5 billion revenue to the economy, and employed an estimated 11,000 workers.

In fact, Singapore is renowned for being a market leader in the development of online games. Singapore features a varied ecosystem conducive to cultivation of the industry, from global development studios to homegrown start-ups such as Tecmo-Koei, Lucasfilm, Double Negative, Electronic Arts and Ubisoft. This is yet another expression of Singapore's successful drive towards being a global interactive and digital economy capital.

INTENDED TARGETS

So how could the proposed Remote Gambling Act harm social games and the technology companies behind them?

The government has been very clear in its statements that the intended targets of the Bill are not social games but gambling for real money or so-called "money's worth". Gambling, as an activity, is known to pose certain social risks and is therefore regulated in a particular manner. Gambling requires someone to bet a stake on the chance of winning money.

Social games categorically do not offer the possibility of placing a stake or bet with the chance of winning or losing real money. But the devil, of course, is in the details. In the current draft of the Bill "money's worth" is defined as "anything recognised as equivalent to money and includes virtual credits, virtual coins, virtual tokens, virtual objects or any similar thing that is purchased within, or as part of, or in relation to, a game of chance".

Given this very broad definition, any in-game credits, coins or tokens involved with social games are likely to be caught up in the well-intentioned fight against unlawful Internet gambling. This is regardless of whether anyone has paid money for the credits or if they can be converted back into real money.

Most of Singapore's social games players understand, that in social games, you can never win, or convert winnings into, real money.

The other key definition of concern is that of "game of chance", defined as a "game that involves both an element of chance and an element of skill" or "a game that is presented as involving an element of chance". All online video games, or in fact almost any game, revolves around a combination of skill and chance, even Monopoly.

Games like Candy Crush, where rows of candies are presented on the basis of random variation or EA's Monopoly, in which a roll of the dice predicates success, are arguably weighted towards chance. Sports-based or strategy games are arguably weighted towards skill.

The point needs to be emphasised that irrespective of genre, "freemium" social games are not gambling games and for this reason have not been regulated as such by any jurisdiction in the world.

In social games, there are no payouts or prizes, in money or money equivalents. There are no stakes of value that can be won or lost.

Surely deploying resources to enforce a de facto prohibition against social media games like Candy Crush and Monopoly of the digital social game world would drain resources and Singapore's law enforcement goal of driving the operators of illegal online gambling sites out of business.

We sincerely hope that the Singapore government recognises this inadvertent scope creep and modifies the definitions of "money's worth" and "game of chance" in order to protect Singapore's growing and vibrant digital economy.

A failure to do so will not just curtail the entertainment Singaporeans enjoy from playing their favourite social games (such as many of those found on Facebook), but it will also have a chilling effect on Singapore's status as a thriving global capital for technology and digital innovation.

• The writer is chief executive officer of the International Social Games Association

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Is bitcoin's rise a boon or bane for businesses?

Business Times
02 Oct 2014
Miao Bin & Clarence Goh

As the virtual currency is here to stay, businesses should be alert to risks from its use

IN September this year, bitcoin made headlines when Braintree, a PayPal subsidiary, announced that it was making its "first foray" into accepting the virtual currency, with its CEO Bill Ready announcing that "over the coming months we'll allow our merchants to accept bitcoin". Gill Luria, an analyst, described this as a "substantial development" for bitcoin because it "opens the door for PayPal to integrate bitcoin into its main wallet functionality" such that "millions of retailers will de facto be accepting bitcoin overnight".

Bitcoin, the world's first cryptocurrency, is a virtual currency that is stored in "digital wallets" that allow users to make transactions or save their money. Like conventional currencies, they can be acquired on "bitcoin exchanges" at prevailing exchange rates. However, bitcoin differs from conventional currencies in that it is not controlled or issued by any central authority such as a central bank.

Instead, it is created by "miners" who receive bitcoins in exchange for solving complex mathematical puzzles. This process of bitcoin "mining" resembles that of mining gold: The total supply of bitcoin is capped at 21 million units, and the mathematics of the bitcoin system were set up so that it becomes progressively more difficult to mine new bitcoins over time.

Since its introduction in 2009, bitcoin has enjoyed growing popularity, with an increase in its use for "real" transactions. For instance, Bitpay, a startup which processes bitcoin payments, reported that the number of merchants who signed up to its service rose rapidly from 1,000 in September 2012 to over 10,000 a year later.

Latest statistics show that more than US$50 million worth of transactions are done using bitcoin every day.

Proponents of bitcoin point to the many benefits that it offers over the traditional currency. For example, bitcoin transfers can be completed almost instantly and at zero or minimal fees, making it a competitive form of payment, especially when compared to credit cards and bank wires.

Also, bitcoin transactions are irreversible, and therefore protect vendors from "charge-back" losses that can arise from fraud. At the macro level, because bitcoin is not issued or controlled by any authority, and has a predictable growth in supply, it is not subject to the risk of devaluation that results from excessive "money printing" by central banks.

On the other hand, critics argue that the inherent volatility of bitcoin prevents it from being widely adopted. As a store of value, a currency must be relatively stable in its value. However, due to its inherent risk and high volume of speculative trading, bitcoin's exchange rate with major currencies in the world has been extremely volatile. For instance, the exchange rate of bitcoin to the US dollar saw a roller-coaster ride in 2013. It started the year at US$13, and climbed all the way up to US$1,147 on Dec 4, before collapsing to US$522 only two weeks later. It eventually closed the year at US$758.

This high volatility leaves users of bitcoin with tremendous impairment risk, or costs them significant transaction fees if they constantly convert any remaining bitcoins into traditional currency.

Correspondingly, any corporation holding significant volumes of bitcoins on its balance sheet would see protecting the value of its holdings as a key priority. However, in its current state, the market for bitcoin is both too small and immature to support financial instruments that effectively allow firms to hedge against exchange rate fluctuations.

Following bitcoin's success, there have been a plethora of other cryptocurrencies - also known as "altcoins" - that have emerged. While many of these bitcoin alternatives borrow ideas from bitcoin, they also attempt to better it by fixing its flaws such as those found in the mining process.

Although none of the altcoins in circulation today enjoy the same prominence as bitcoin, some - such as Litecoin and Dogecoin - have rapidly grown in popularity and could challenge bitcoin's status as the leading cryptocurrency in the future. Users and investors must be aware of the potential negative impact of competition on the value of bitcoin.

Another major risk faced by bitcoin adopters is the policy uncertainty from regulators. An unfortunate fact about bitcoin is that it has many traits, such as anonymity and non-traceability, which can be exploited to conduct criminal activities. For instance, the 2013 Federal Bureau of Investigation takedown of Silkroad, a notorious website for criminal activity, revealed that bitcoins were widely used in transactions made on the site. To counter such illegal activities, regulators around the world have begun to tighten control over bitcoin transactions.

Early this year, the Monetary Authority of Singapore (MAS) announced plans to regulate virtual-currency intermediaries including operators of bitcoin exchanges and vending machines in order "to specifically address money laundering and terrorist financing risks".

In particular, MAS said it would introduce legislation requiring virtual currency intermediaries that buy, sell or facilitate the exchange of such currencies for real currencies to verify the identities of their customers, and to report any "suspicious transactions" to the Commercial Affairs Department.

MAS also warned that "consumers and businesses should take note of the broader risks that dealing in virtual currencies entails and should exercise the necessary caution", and that investors in virtual currencies such as bitcoin should be aware that they do not enjoy the safeguards that investors in securities have under either the Securities and Futures Act or the Financial Advisers Act.

Further, Singapore firms which buy and sell bitcoins, or exchange them for other goods and services must pay taxes for these transactions, with the Inland Revenue Authority of Singapore stating that the sale and exchange of bitcoins "in return for a consideration in money or in kind is a taxable supply of services subject to GST" (goods and services tax).

Accounting treatment

The rapid growth of bitcoin as a medium of business transaction also poses a pressing question to the accounting profession: How to account for it?

In this respect, accounting standard setters have not issued any official guidance on this issue, leaving company accountants and their auditors to exercise professional judgment when applying existing accounting standards to bitcoin transactions. Given that bitcoins have often been referred to as a "digital currency", it is tempting to use accounting standards for foreign currency to account for transactions that involve bitcoin.

However, it is debatable whether or not bitcoin can be considered as equivalent to a foreign currency. Also, given bitcoin's highly volatile exchange rates with major currencies, such an accounting treatment is likely to lead to overwhelming net foreign currency translation adjustments, and distort the true profitability of a firm's underlying operations.

An alternative accounting treatment for bitcoin transactions would be to consider them as barter trades, which fall under the jurisdiction of accounting for non-monetary transactions. But this will introduce complications to the revenue recognition process, for which accountants must make judgments on critical factors such as the timing of recognition and transaction amounts.

Despite its fast growth, it remains too early to predict whether bitcoin will achieve sustainable success to become a widely accepted form of payment. The increasing acceptance of bitcoin as a form of currency should, however, provide the catalyst for a greater awareness of the issues surrounding its use.

Indeed, it appears that cryptocurrencies are here to stay. Regardless of whether developments occur in Singapore or elsewhere, they will continue to impact the business community here. Therefore, businesses in Singapore should be prepared to handle developments in these areas even if they choose not to embrace them.

A greater understanding of the developments of bitcoin would allow businesses to alert themselves of the issues and concerns that arise so that they can better prepare themselves and make informed decisions which could be to take advantage of opportunities presented by bitcoin, establish risk control measures, or to avoid its use altogether.

At the same time, other users of bitcoin should also be aware of the speculative and transactional risks involved when using bitcoin as an investment tool or in making purchases.

The writers are research director and research manager, respectively, at the Institute of Singapore Chartered Accountants

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Court battle over WP town council's CNY fair begins

Straits Times
15 Oct 2014
Walter Sim

NEA lawyers claim it was never given the permit to run 'temporary fair'

A TRIAL involving the Workers' Party (WP) town council began yesterday, with the National Environment Agency (NEA) lawyers saying it was never given a permit to run a Chinese New Year fair in January.

Still, the Aljunied-Hougang-Punggol East Town Council (AHPETC) went ahead with it in Hougang Central, a district court heard.

The event ran from Jan 9 to Jan 30, with five stalls, selling festive decorations, cookies and potted plants, among other things, between blocks 811 and 814.

This, the lawyers argued in their opening remarks, constituted a "temporary fair".

As such, it contravened Section 35 of the Environmental Public Health Act, which states a permit is necessary for "any temporary fair, stage show or other such function or activity".

But the AHPETC, whose chairman is Ms Sylvia Lim, is disputing NEA's argument. Its lawyer Peter Low pointed out that it was a "mini-fair" or an "event", and hence did not require a permit.

He also said he would seek clarification from the NEA on why it was necessary to get the Citizens Consultative Committee's (CCC) approval when applying for such a permit. The CCC in question was the Bedok Reservoir-Punggol CCC, which Mr Low told the court was chaired by a People's Action Party grassroots leader.

The case before District Judge Victor Yeo started from a letter the town council wrote to the NEA on Dec 20 last year, asking if a permit was required for the Chinese New Year (CNY) event.

The NEA said "yes" three days later, and e-mailed to the town council application forms for a "trade fair permit" and a "trade fair foodstall licence".

On Dec 24, AHPETC replied that the forms were "unsuitable", given that it was organising and operating the event by itself.

NEA reiterated that a permit was required and the town council submitted the forms. But it struck off the words "trade fair" and substituted them with "event". It also stated the event would be held from Jan 10 to Jan 30 as opposed to Jan 9 when it actually began.

On Jan 9, the NEA told the town council via e-mail that the application was incomplete and could not be processed.

The AHPETC did not respond to the e-mail, nor to a subsequent warning to stop the event.

NEA prosecutor Isaac Tan did not elaborate on the missing documents in the application.

Mr Tai Ji Choong, who is NEA's director of environmental health, told the court that a permit was required for temporary fairs so that "there would not be disamenities caused to the community". These include noise nuisance, pest infestation and food hygiene issues.

During cross-examination, Mr Low wanted Mr Tai to explain why it was necessary to get the CCC's approval as a condition for the permit.

The judge, however, agreed with Mr Tan's objection that the issue surrounding the conditions for a permit should not be argued in the present trial but at a judicial review.

Mr Tan also argued that the matter of not applying for a permit was one of "strict liability". Citing littering as an example, he said whether or not one intended to litter was immaterial.

He also said that since the AHPETC did not appeal against its rejected application, it should not use the court to find out why it was not given the permit.

Mr Low later showed the court a revised trade fair application form dated July 2008, which states "only grassroots organisations, town councils and charitable, civic, educational, religious or social institutions are allowed to hold fairs".

But the forms the AHPETC received last December did not have the words "town councils".

Mr Low asked when and why the change was made. Mr Tan objected, saying it was irrelevant as the issue before the court is whether the event needed a permit.

If found guilty, the town council can be fined up to $1,000 and, for subsequent convictions, a fine not exceeding $4,000 and/or a jail term of up to three months.

The trial continues today.

waltsim@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

Lasting Power of Attorney system has adequate safeguards

Straits Times
08 Oct 2014
Carolyn Khew

WHETHER a person informs family when setting up a Lasting Power of Attorney (LPA) is a personal choice, Minister for Social and Family Development Chan Chun Sing told Parliament yesterday, stressing that the scheme has adequate safeguards.

He was responding to questions from Aljunied GRC MP Sylvia Lim on the scheme, which allows a person aged at least 21 to appoint another to make key decisions on his welfare and finances should he lose the mental capacity to do so.

Ms Lim, a lawyer, asked why an option to inform others when applying for an LPA was removed from the form last month, and whether the ministry would look at bringing it back.

Mr Chan replied that it was removed after feedback from applicants, who could still, on their own, decide to share the information. "Not everyone wants to inform certain family members of their decision and that is the dilemma. We leave it to the best judgment of the individual to inform the person that he wants to inform."

The LPA system, which was launched four years ago, has come under scrutiny after a former China tour guide was accused of manipulating an 87-year-old Singaporean widow into giving him control over her assets estimated to be worth $40 million.

The widow, Madam Chung Khin Chun, applied for the LPA naming 40-year-old Yang Yin as her donee in 2012. Her niece, tour agency owner Hedy Mok, found this out only earlier this year. She then started legal action against Mr Yang, alleging that he took advantage of her aunt, who was diagnosed with dementia this year.

An LPA is issued only after a lawyer, medical practitioner or psychiatrist witnesses and certifies the application.

Yesterday, Ms Lim asked if the Government would consider an "additional check" by these professionals to ensure that the applicant is not unduly influenced. She highlighted that in Scotland, they would have to decide on the applicant's independence, based either on personal knowledge or by consulting someone else.

Mr Chan said this would be up to the certificate issuer who, regardless, is expected to do the job professionally. "I can appreciate that sometimes a second pair of eyes does help but we must always be careful not to overly burden the system," he explained, stressing that applicants should consider who they wish to appoint as donees carefully. He pointed out that the system here is "much more onerous" than in other countries, where in some instances a person does not need a professional to certify the LPA.

kcarolyn@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.