30 July 2014
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MAS plans new laws to make rate-fixing a crime

Business Times
30 Jul 2014
Siow Li Sen

THE Monetary Authority of Singapore yesterday proposed new laws to make it a crime to manipulate financial benchmarks, following the global rate-fixing scandals of the past few years.

MAS has released a consultation paper on legislation to introduce a regulatory framework for financial benchmarks. A financial benchmark is typically a price, estimate, rate, index or value that is made available to third parties for use as a reference in financial instruments or transactions.

The key Singapore Interbank Offered Rates (Sibor) and Swap Offered Rates (SOR) will be the first benchmarks to be protected under the proposed laws. Sibor and SOR are most commonly used here to set interest rates for home loans and commercial loans.

The move comes after a consultation last year on proposals to introduce a regulatory framework for financial benchmarks. Taking into account the feedback received, MAS said the proposed legislation will comprise two key thrusts.

"The manipulation of any financial benchmark in Singapore will be made liable to criminal and civil sanctions under the Securities and Futures Act," it said. This will apply to acts of manipulation occurring within Singapore and in respect of financial benchmarks administered in Singapore.

Administrators and submitters of financial benchmarks designated by MAS will be subject to regulation, including licensing requirements, it said. "MAS will designate key financial benchmarks, based on their systemic importance and susceptibility to manipulation."

For now, MAS intends to designate Sibor and SOR as key benchmarks.

MAS assistant managing director Lee Boon Ngiap said: "Financial benchmarks play an important role in the functioning of the financial system. The proposed regulatory framework will deter manipulation of financial benchmarks and enhance the integrity of benchmarks set in Singapore."

In June last year, following the findings of a year-long review on the rates setting scandal, the MAS said then it found no criminal offence under current Singapore laws.

It did take a range of supervisory actions against banks involved including ordering additional statutory reserves - of between S$8.5 billion and S$12 billion - as cash deposits with the MAS at zero interest for a year.

MAS also found a total of 133 traders engaged in several attempts to influence the benchmarks though there was no conclusive evidence the key local interest rates and foreign exchange benchmarks were successfully manipulated.


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British appeals court frees S'pore father jailed for contempt

Straits Times
22 Jul 2014
K.C. Vijayan

It finds that judge, also in a related case, should have recused herself

A BRITISH appeals court has freed a Singaporean dad jailed for contempt after finding the judge involved should have recused herself from dealing with the case.

The court held that the judge had been so "steeped" in the child wardship case, which led to the contempt hearing, that it would have been a "better course" and "a safer one" for another judge to hear the case.

In April, the Singaporean banker was jailed for 18 months for failing to return his Singapore-based two-year-old son "M" to London, as ordered in an ongoing custody tussle with his estranged London-based wife. The man, who cannot be named, had not complied with court orders to return M, who has been looked after by his paternal grandparents here since last July.

The appeals court, in judgment grounds released last week, held that it was "inappropriate" for the judge to deal with the man for contempt, given her strong remarks which an appeals court judge described as coercive in the run-up to the actual contempt hearing.

"The more robust a judge has been in delivering a coercive message at the earlier hearings, and the more the judge has emphasised the consequences of the breach, the more inappropriate (or impossible) it will be for the same judge to conduct the committal process," wrote Lord Justice Andrew McFarlane in the judgment grounds.

The court, however, made clear the judge was justified for her "very robust demeanour" in warning the man of the potential consequences of disobeying court orders, in the earlier hearings leading up to the contempt case.

The couple married in Singapore in 2011 and subsequently lived in London, but the relationship soured and his Mongolian wife obtained a British court order which held that the child's habitual home is in London.

It instructed the father to return the child to her care. But he failed to comply with court orders issued on March 14 and March 21 this year for the boy's return, which led to the contempt hearing on April 3, when he was jailed.

On appeal, the court found that the man was confined in London and therefore not in a position to carry out the judge's orders as his parents in Singapore had refused to send the boy back.

It emerged that the grandparents had instead taken court proceedings in Singapore to keep the boy here and the grandfather no longer responded to the man's e-mail or spoke to him.

"In this case, the father had delivered up his passport and so could not return to Singapore to collect M himself," noted Lord Justice David Kitchin.

"He also maintained he had done everything he could to comply with the three orders made against him. There was nothing more he could do because he had exhausted his funds and because he could not take action against his parents, for that would destroy his family." Contempt involved a deliberate failure to comply with a court's order but the order must be one where the alleged contemnor had "the ability to comply", he added.

The court also held that the judge erred in not allowing the man a further opportunity to make submissions to mitigate, for the purpose of sentencing, against the serious nature of the contempt of which he had been found guilty.

The appeals court also upheld the judge's "unusual" order that the man pay the full £51,800 (S$109,850) to his wife for the costs of the proceedings, based on his unreasonable conduct. It also further upheld the judge's ruling that the child was to return to his habitual residence in London.

The court remitted the case to the London High Court to reconsider fresh orders against the man in relation to M. It called for "continued liaison" with the Singapore High Court through the appropriate channel for the return of M to London as soon as possible.


Background Story

The appeals court held that it was "inappropriate" for the judge to deal with the man for contempt, given her strong remarks which an appeals court judge described as coercive.

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Closer tabs on public figures' wealth: MAS

Straits Times
16 Jul 2014
Mok Fei Fei

Tighter rules aim to tackle terrorism financing and money laundering

INDIVIDUALS who hold prominent public function roles, including heads of state and senior political party officials, may come under closer financial scrutiny as Singapore's central bank looks to tighten rules to tackle money laundering and terrorism financing.

Monetary Authority of Singapore (MAS) deputy managing director Ong Chong Tee said: "Singapore is fully committed to keeping our financial centre clean and supporting global efforts to combat financial crime."

Since the Sept 11, 2001 attacks on New York and Washington, DC, the authorities around the world have worked to crack down on illegal movements of money.

The MAS yesterday released a consultation paper on the proposed amendments to its notices to financial institutions.

The proposed changes include a requirement for financial institutions to "cater for a risk-based approach for certain categories of politically exposed persons", said the MAS in a statement.

A "politically exposed person" is defined as a person entrusted with prominent public functions, which include the roles held by a head of state, government ministers, senior civil or public servants, or senior political party officials.

Other than conducting normal customer due diligence measures, financial institutions have to go one step further for such politically exposed people by, for example, checking their source of wealth.

Financial institutions must also carry out enhanced monitoring of the business relations with such clients as well as with their family members and close associates under the proposed amendments.

Another rule being proposed is that financial institutions must put in place additional requirements for cross-border wire transfers exceeding $1,500.

These would include performing customer due diligence on occasional transactions and minimum information fields in the message or payment instructions.

Not all cross-border transactions above $1,500 would be affected as financial institutions would normally already have the relevant information as part of their customer due diligence, such as when they establish business relations with their customers.

For the first time, card network providers such as American Express or Diners Club will also be issued with a new notice on the prevention of money laundering and terrorism financing.

MAS said in the consultation paper that such non-bank credit or charge card issuers are already subject to existing regulations and have established internal controls against money laundering and terrorism financing.

They have not been regulated for anti-money laundering and counter-terrorism financing as MAS said they are less exposed to these risks compared with other financial sub-sectors here.

But MAS said they will now come under such regulations as "the card-issuing sub-sector as a whole is considered by international bodies to warrant closer scrutiny".

Other proposed amendments would see financial institutions perform money-laundering or terrorism-financing risk assessments at the wider institutional level.

This is on top of assessing such risks over individual customers.

Financial institutions will also have to formalise the need to screen customers and their connected parties.

Many of the proposals are already being done by financial institutions, according to MAS, which said "the proposed changes formalise existing supervisory expectations and practices of the financial institutions".

MAS said the new measures will further safeguard Singapore's financial system from being used to launder money or finance terrorism.

In an evaluation exercise conducted by the Financial Action Task Force (FATF) in 2008, Singapore was assessed to have a rigorous regime against money laundering and the financing of terrorism, Mr Ong said.

The FATF will conduct another evaluation of Singapore next year and Mr Ong said MAS aims to do as well in that exercise. The FATF is the global standard-setter for measures to combat money laundering, terrorist financing, and the financing of proliferation.

Dr Lim Wee Kiak, a member of the Government Parliamentary Committee for Finance and Trade and Industry, said: "If there are more checks and balances, it is always better."


Background Story


• Financial institutions need to cater for a risk-based approach for certain categories of politically exposed people.
• Financial institutions must put in place additional requirements for cross-border wire transfers exceeding $1,500.
• Financial institutions need to perform money-laundering or terrorism-financing risk assessment at the wider institutional level.

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Onus on merchants to minimise credit card abuse: Banks

30 Jul 2014
Joy Fang

No rules banning firms’ staff from passing on details internally

SINGAPORE — When Mr Darren Neo called Canadian Pizza in March, he was surprised when the call centre officer asked for his full credit card details, including the card’s CVV security number.

He was in for a bigger surprise when his order was handed to another branch of the company: His credit card details had been passed on as well, without his permission.

“I know I can track any misuse, but it’s still a frightening thought, knowing my details are out there,” said the 25-year-old civil servant.

While there are no regulations prohibiting a company’s employee from passing on credit card details internally, banks told TODAY they include security measures in their agreement with merchants to deter fraudulent transactions and also keep a lookout for such offences. The onus, however, is on merchants to ensure there are systems in place to minimise abuse.

Experts also agreed such practices are not a big cause for concern on the part of consumers as merchants will be held accountable for the misuse of credit cards in such cases.

Mr Owen Hawkes, KPMG partner in forensic services, said the practice poses a higher risk of misuse, as with passing payment card details in any unencrypted form. However, he noted that banks here had taken the initiative to adopt a variety of measures, such as using transaction-monitoring software and sending customer notifications by SMS, to address the risks of unauthorised transactions.

Mr Seah Seng Choon, executive director of consumer watchdog Consumers Association of Singapore, thinks merchants should not be allowed to pass a customer’s credit card information within the company if the customer’s permission has not been sought first.

Ms Wong Chung Yee, head of cards at OCBC Bank, said some business segments allow customers to place orders over the phone to provide more service channels. However, some firms implement measures such as placing CCTV cameras near the service counter, where staff take phone orders, or requiring employees to key in the card information directly onto their merchant terminals, she added.

When contacted, Canadian Pizza said it engaged an external call centre to handle its calls and telemoney three years ago. “There is a level of security we have practised along the way and we’ve instructed (it) to do this and that. But, then again, how its practices are depends on how it engages the telemoney system,” said Mr Ismail Marican, Canadian Pizza’s group operations manager.

He added that it would be engaging another call centre, which would start in September, as the previous one had “questionable” performance standards. When contacted, the call centre in question declined to comment.

A check with other home-delivery merchants showed some do not process credit card payments over the phone and that those that do so have security measures in place.

Mr Andrew Ing, chief operating officer of The Lo & Behold Group which owns Extra Virgin Pizza, said the company’s delivery crew are required to take along a wireless credit card terminal to assure a customer that details have never been shared.

Mr Chinmay Malaviya, managing director of foodpanda Singapore, said for orders placed over the phone, the customer care agent would key the customer’s card information into the system, but he would not have access to the details after payment had been processed. Its phone system can trace the agent who processes an order and all hotline calls are recorded.


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SMRT, SBS to be fined S$1.65m

Business Times
22 Jul 2014
Samuel Ee

Penalties will go to a fund that helps needy families with transport fares

SMRT will be fined S$1.6 million for four service disruptions on the North-South and East-West Lines, while SBS Transit will have to cough up S$50,000 for one incident on the North-East Line.

Under the Rapid Transit Systems (RTS) Act, a licensed rapid transit system operator which fails to comply with operating performance standards and regulatory requirements may be penalised by the Land Transport Authority for up to S$1 million per incident (for incidents before March 25, 2014); and up to S$1 million or 10 per cent of its annual fare revenue of a rail line, which is the subject of the licence, whichever is higher (for incidents from March 25, 2014).

In SMRT's case, the incidents occurred due to SMRT's failure to comply with established procedures and processes. On Oct 9, 2013 and Jan 22, 2014, train services along the East-West Line were disrupted after a train passed a red signal light, damaging a track point in the process.

On Jan 20, 2014, train services along the North-South Line (NSL) were disrupted when a train stalled between Yio Chu Kang and Ang Mo Kio stations after its on-board battery drained out. The battery had failed to charge up as two circuit breakers on board the incident train were not closed after routine nightly checks by SMRT.

Finally, on May 2, 2014, north-bound train services on the NSL between Yio Chu Kang and Yishun stations were disrupted due to a traction power fault because of SMRT's failure to remove a safety device to prevent electrocution, which had been installed for sleeper replacement works that morning.

As for SBST, train services on the North-East Line were disrupted on March 21, 2014 and April 6, 2014 due to tripping of the overhead catenary system traction power supply. The first incident was caused by staff error during maintenance work at Potong Pasir station, while the second was due to an aluminium-foil helium balloon that was accidentally released into the station by a passenger. But no action was taken against SBST for the latter incident as it was caused by a passenger.

The total penalties of S$1.65 million will be donated to the Public Transport Fund to help needy families with transport fares.

SMRT and SBST have 14 days to appeal.

Meanwhile, the LTA said that train service withdrawals across the network have continued to fall from 2013. In particular, the number of train withdrawals for the North-South and East-West Lines, normalised to 100,000 train-km travelled, has dropped to 1.3 by the second quarter this year, compared to 3.3 in 2012 and 2.2 last year.


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Serial cheat tricked retailers out of $1.3m

Straits Times
16 Jul 2014
Ian Poh

A SERIAL cheat took advantage of retailers' unfamiliarity with a seldom-used method of payment to "'spend" more than $1 million on gold bars, jewellery and technology products - even though he did not have enough money in his bank accounts to foot the bill.

Teo Ziqi would request an "offline" transaction, which ensured the lack of funds would not immediately be detected. He would hand over his debit card and provide a six-digit approval code purportedly issued by his bank - but this should have been obtained by the merchant, not the customer.

A charge slip, then signed by Teo, would be printed after the card was swiped and the false code keyed in, fooling victims into thinking the transaction had been approved. But this was not the case, and Teo's bank would eventually execute "chargebacks" on the transactions, leaving the merchants without their payment.

Teo was usually able to walk away with his loot uncontested. The former yoghurt store worker, who was bankrupt at the time, pawned or resold his purchases, which included gold bars, smartphones and iPads, and used some of the proceeds to gamble. Only $140,200 worth of goods was recovered. His scam was eventually discovered by the authorities, who caught him in the act.

Teo, 31, has numerous previous convictions, many of them for cheating. Yesterday, he was sentenced to six years of corrective training - a tough prison regime for repeat offenders without remission for good behaviour - after pleading guilty to 23 charges.

These comprised 20 counts of cheating or trying to cheat - involving $1,285,762 - one of forgery, and two of failing to pay an entry levy to each of the two casinos here.

Teo was fined $2,000 for the two casino offences. Some 13 other charges, including of theft in dwelling, were also taken into consideration.

The court heard that when executing the scam in Sept and Oct 2012, Teo would on many occasions pretend to call his bank in front of the outlet's staff to obtain the approval code.

In two instances at a Boon Lay pawn shop, he promptly converted the loot to cash by purchasing gold bars then immediately pawning them.

Deputy Public Prosecutor Nicholas Tan said Teo's purchases had been "systematic" and of high-value goods, which he resold or pawned with "remarkable speed". He pointed out that Teo's ploys had been so well-rehearsed that he successfully fooled 10 different victims, including senior sales executives and even a director.

For each count of cheating and inducing his victims to hand over property, he could have been jailed for up to 10 years and fined.


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Maid gets jail for attacking employer

Straits Times
30 Jul 2014
Ian Poh

Accused's actions far outweigh any provocation against her, says judge

A MAID who hit a 66-year-old retiree with a bamboo pole and stomped on her foot, causing it to fracture, was sentenced to three months in jail yesterday.

Myanmar national Cing Sian Huai pleaded guilty to hurting Madam Grace Toh Ah Bay on April 27 in a Bedok flat, where she had worked as a maid for the victim and her mother, Madam Seah Cheng Poh, 93.

The court heard that the incident happened at 9.07pm that day, when Cing refused to continue cleaning after Madam Toh scolded her for not washing the dishes properly.

The 24-year-old maid said she did not want to continue working and insisted on returning to the employment agency immediately.

Madam Toh, however, refused to unlock the gate.

Cing then tried to force open the lock using a window wiper.

When this failed, she started hitting the lock and gate with a bamboo pole. Both the wiper and pole were broken in the process.

Madam Toh tried to calm Cing down but the maid pushed her and hit her hand three times with the broken pole instead, and stomped on her foot after she fell.

Besides a fractured metatarsal bone and bruises on the foot, the attack also left Madam Toh with bruises on her arms. She was given two weeks' hospitalisation leave.

Cing also pushed Madam Seah when she tried to intervene, causing her to fall and hit her thigh on a wooden chair on the way down.

One charge of using criminal force arising from this action and another for causing hurt with the bamboo pole were taken into consideration against Cing.

Handing down the sentence, District Judge Lim Tse Haw said Cing's actions had far outweighed any provocation against her, and that the injury caused was not minor.

"Just as the court will protect domestic helpers against violence by their employers, it has an equal duty to protect employers, especially elderly ones, against violence by their domestic helpers," said the judge.

Cing is understood to have begun working for the victims in March and has been in remand since she was first charged at the end of April.

She is expected to be released from prison soon, considering the three months already spent in remand, and repatriated to Myanmar. The maid, who had no previous convictions, could have been jailed for up to two years and fined up to $5,000 for voluntarily causing hurt.


Background Story


Just as the court will protect domestic helpers against violence by their employers, it has an equal duty to protect employers, especially elderly ones, against violence by their domestic helpers.

- District Judge Lim Tse Haw

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Regulator plans new rules to shield investors

Business Times
22 Jul 2014
Jamie Lee

MAS says they'll apply to assets such as land banks, gold and other physical assets

[SINGAPORE] The Monetary Authority of Singapore (MAS) yesterday proposed a set of regulations to boost investor protection, with new rules for investments linked to land banks, gold and other physical assets - following several scams that have left retail investors high and dry.

Its latest move, laid out in a consultation paper, means investment schemes linked to land-banking and other physical assets such as most precious metals, will no longer be made available to retail investors.

MAS also wants all retail investment products to be rated on their complexity and risk - a decision that David Gerald, president of the Securities Investors Association (Singapore), said would provide needed guidance for retail investors. "It's better late than never," he added.

The central bank plans to tweak its definition of collectively managed investment schemes (CIS) to include schemes that involve pooled profits and remove investors from the daily control of the investments. This will apply to land-banking, which would then be classified as a CIS.

All CIS must meet standards set out in the CIS Code, which ensures that the assets involved are liquid. Since land cannot be deemed liquid, unlike securities, it would no longer be offered to retail investors.

The move comes amid rising concerns over land-banking investments. Last month, two of three directors of land-banking firm Profitable Plots were jailed for conspiring to cheat investors in a bond scam that came with claims of a 12.5 per cent yield in returns within six months.

The regulator plans to make an exception for investment schemes linked to gold, silver and platinum, by creating specific rules for such products for retail participation. The MAS had earlier done so for real estate investment trusts (Reits) to allow investors to invest in income-generating properties.

The exception comes as these precious metals are regarded as comparable to financial assets in liquidity and tradability terms.

Also, buyback arrangements involving gold, silver or platinum will be regulated by MAS as debentures, and must meet prospectus disclosure requirements. MAS sees close similarities between these buybacks and collateralised debt obligations.

While it does not seek to judge the merits of investment schemes, MAS said that consumers should enjoy the regulatory safeguards for products that are similar to existing capital markets products. BT understands these products have fallen out of MAS's regulatory scope due to their unique structures.

As one industry source put it, "if it looks and smells like a capital market product, it is a capital market product".

Indeed, investigations are still ongoing at certain gold trading companies, where there have been fears of fraud. In these gold buyback schemes, investors buy gold at a premium to the market price, and receive monthly payouts. The firms then pledge to re-purchase the gold a few months later at an even higher premium.

The MAS has also proposed that all investment products sold to retail investors should be rated based on the complexity of the products' structure, and the risk of loss of the principal invested. This is meant to raise the level of disclosures. BT understands that banks issuing such products can include a few lines of explanation to guide investors on the rating, but these are meant to be short and easy to understand.

"The proposed measures will help to strengthen Singapore's reputation as a global wealth management hub. We welcome these measures as they will help investors make more informed decisions," said Dennis Khoo, managing director and head of personal financial services at United Overseas Bank (UOB).

OCBC Bank has a product suitability committee that assesses the suitability of investment products for retail investors, said Lee Ee Ling, head of risk & prevention, consumer financial services, at the bank.

In another shift, the MAS has proposed to allow all non-institutional investors to opt for accredited investor status.

Currently, accredited investors are automatically categorised as such, based on their income or wealth. The change allows flexibility for investors to decide on the level of regulatory protection they want to be entitled to.

This comes as the income or wealth threshold - at S$2 million net personal assets or S$300,000 annual income - used to define an accredited investor, is seen as too blunt a tool. An investor who gets a sudden windfall may not be savvy with his money just yet. "Sophistication doesn't change overnight," said the source.

If the industry feedback is positive, implementation of these proposals should take about a year, said an MAS spokeswoman.


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Apex court urged to axe gay sex law

Straits Times
15 Jul 2014
Selina Lum

It is hearing two appeals against the law that criminalises sex between men

SINGAPORE'S highest court was urged yesterday to strike down the law that criminalises sex between men - or at least modify it so that it does not apply to private acts between consenting adults.

The Court of Appeal is hearing the appeals over two separate constitutional challenges against Section 377A of the Penal Code, which carries up to a two-year jail term for men who, in public or private, commit acts of "gross indecency" with other men.

Gay couple Gary Lim, 46, and Kenneth Chee, 38, as well as 51-year-old Tan Eng Hong, contend that the provision is inherently discriminatory and should be declared void by the court.

Their argument is that Section 377A infringes their rights to equality under Article 12 of the Constitution and violates their rights to life and personal liberty under Article 9.

The Attorney-General's Chambers, however, asserts that the provision does not breach the Constitution.

Senior Counsel Deborah Barker, representing the couple, argued that if the court disagrees that Section 377A should be invalidated, it could interpret the statute to exclude consensual acts in private between adults.

She pointed out that there is a plethora of criminal provisions to address non-consensual acts involving both adults and minors.

Ms Barker said her clients, who have been in a relationship for more than 16 years, are not asking for affirmation that male homosexual conduct is acceptable here.

"Instead, the appellants call on this court to find that the majority cannot, through the guise of public morality, target an unpopular minority group by restricting their intimate conduct in private," she said.

She urged the court to look deeper and consider the legitimacy of the legislation's objective and not "rubber stamp" a law so long as it passes a classification test used by the courts in reviewing whether a law complies with the constitutional right of equality.

Mr M. Ravi, representing Mr Tan, argued that a general disapproval of homosexuality was not sufficient justification to send gay men to jail.

Both lawyers argued that the law targets only gay men but not gay women, and that the term "gross indecency" is vague.

But Senior Counsel Aedit Abdullah, from the Attorney-General's Chambers, argued that it was immaterial that women are not covered because the predecessor to Section 377A was enacted to combat immorality between men.

He said that the arguments against the "vague" phrase was misplaced and cited several provisions also worded in fairly broad language.

Mr Aedit Abdullah argued that it is for Parliament, and not the courts, to decide whether the law should be amended.

Mr Tan was the first to file a challenge against the statute in 2010 after he was charged with having oral sex with another man in a public toilet. Mr Lim and Mr Chee later filed their own challenge.

Their cases were separately heard - and dismissed - by High Court Judge Quentin Loh last year.

The counsel will reply to the other side's arguments today.


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S'pore: the right place for dispute settlement

Business Times
29 Jul 2014
Chong Yee Leong & Dinesh Dhillon

The Republic is well equipped to fill the choice position of Asia's arbitration hub

FOLLOWING the surge of investment and development in Asian countries in recent years, international commercial arbitration as a form of dispute resolution has also gained significance in Asia, and the stage looks ready for an increased level of claims involving investors and states.

This article observes how the investment treaties of Asean member states facilitate investor-state dispute resolution and why Singapore is equipped to fill the choice position of Asia's arbitration hub in this regard, even possibly becoming the ideal venue for investor-state mediation.

Investor-state dispute settlement provisions in Asean investment treaties

To appreciate the features of investor-state dispute resolution involving Asean member states, the landscape must be considered against the backdrop of the various Asean investment treaties - most notably the Asean Comprehensive Investment Agreement (ACIA) which took effect on March 29, 2012. Protection for an investor in an Asean country is enshrined in the ACIA which - on top of reaffirming core investor protections common to most investment treaties, such as according fair and equitable treatment to investors and protection against unlawful expropriation or nationalisation of investments - provides for further investor protection in the form of Most-Favoured-Nation treatment and greater freedom for the operation of foreign investments within the host state.

More significantly, the ACIA also contains provisions which govern investor- state dispute settlement (ISDS). Such ISDS provisions are crucial in transforming the core protections for Asean investors from mere declarations of intent within a treaty into enforceable safeguards for their investments in the host state. The ISDS regime in the ACIA empowers an Asean investor to unilaterally commence a claim against an Asean host state. This is especially advantageous for an investor where reliance on the national courts of the host state is difficult or impossible. Specifically, Article 33 of the ACIA allows investors to seek dispute resolution in domestic courts or arbitration at various forums, including the International Centre for Settlement of Investment Disputes (ICSID), the United Nations Commission on International Trade Law (UNCITRAL) or, if the disputing parties agree, at regional arbitration centres such as the Singapore International Arbitration Centre (SIAC).

Moving away from the ACIA, there has also been a proliferation of Asean Plus One treaties where Asean countries as a collective group conclude free trade agreements (FTAs) with key players in the world economy such as Australia, China, India, Japan, New Zealand and South Korea. The Asean Plus One FTAs with Australia, China, New Zealand and South Korea feature ISDS mechanisms similar to those in the ACIA. Further, negotiations are presently underway for the Regional Comprehensive Economic Partnership (RCEP) between Asean and its FTA partners, as well as the Trans-Pacific Partnership Agreement (TPPA), which Brunei, Malaysia, Singapore and Vietnam are party to, and it is highly likely that both these investment treaties will feature ISDS mechanisms as well.

Getting the most out of Asean investment treaties

To date, there has not been a reported decision which finds an Asean member state liable for violation of an investment treaty. In this regard, Asean host states have mostly successfully argued that the arbitral tribunal lacked jurisdiction to hear the substantive dispute. Indeed, the issue of jurisdiction has proven to be a common stumbling block as many investment treaties lay down conditions which must be satisfied before the tribunal has jurisdiction over the matter. As an illustration, in a recent US$3.75 billion claim commenced against the state of Vietnam by a US investor, Michael McKenzie, the tribunal upheld Vietnam's jurisdictional objections and concluded that McKenzie had not made a qualifying investment because he had failed to demonstrate ownership and control of the investing company, and had failed to comply with an obligation of good faith imposed on those who bring claims against a state in an international forum.

Thus, for an investor to maximise the protection available to it under an Asean investment treaty, it must from the outset familiarise itself with all the requirements under the treaty, not least the requirements to establish jurisdiction of the arbitral tribunal.

Singapore as an investor-state arbitration hub

With the exponential growth of bilateral, regional and multilateral investment treaties, investor-state disputes in the Asean region look set to correspondingly increase. Based on statistics issued by the United Nations Conference on Trade and Development (Unctad) and the ICSID, the number of known investor-state arbitrations involving Asean countries to date are given in the table (above).

In the recent Philip Morris Asia dispute with Australia, Philip Morris Asia succeeded in arguing for Singapore to be the seat of the arbitration over London. Philip Morris Asia cited factors such as the neutrality of Singapore as a seat, and the judiciary's demonstration of minimal intervention and a supportive attitude towards arbitration. Singapore has also previously been the seat for other arbitrations such as the White Industries Australia dispute against India and the Deutsche Bank dispute against Sri Lanka.

Singapore appears from these proceedings to be gaining popularity as an arbitration seat for investor-state disputes. Indeed, Singapore is equipped to embrace this role. The SIAC has built for itself a strong reputation as an institution of choice for the arbitration of private commercial disputes. The next natural step would be to move towards investment treaty arbitration. The recent addition of rule 3.1(d) to the SIAC Rules 2013 specifically recognises that disputes arising out of an instrument "other than a contract" may be referred to SIAC arbitration, and investment treaty disputes are cited as an example.

Singapore's Maxwell Chambers is also party to a memorandum of understanding with the ICSID for the conduct of hearings in Singapore.

On the horizon: investor-state mediation?

It has been observed that Asean investor- state arbitrations incline towards a conciliatory approach to dispute resolution. In December 2013, Indonesia and a Japanese consortium, Nippon Asahan Aluminium (NAA), reached settlement of a potential ICSID dispute, with the Indonesian government agreeing to pay US$557 million for NAA's stake in a joint-venture project, thereby avoiding full-scale arbitration proceedings. News of the settlement was welcome, given Japan's sizeable investments in Indonesia and concerns about the impact on the countries' relations had the dispute escalated to the ICSID.

The resolution of the Indonesia-NAA dispute by settlement may be indicative that a viable alternative to arbitration is required. There are many factors which militate in favour of having investor-state mediation as an option, such as the uncertainties, costs and delays in arbitration proceedings which create pressure on small developing nations against whom such claims are brought. The availability of mediation as an alternative may in fact eradicate the often criticised "all or nothing" approach involved in arbitration, in which investors either abandon or settle claims outside the formal procedure, or incur colossal sums in costs.

In this respect, Singapore has taken the initiative to propagate such an alternative. The Singapore government has recently announced intentions to set up the Singapore International Mediation Centre, with the specific aim of promoting mediation in emergent regional markets such as Brunei, Cambodia, Laos, Myanmar, the Pacific Islands, the Philippines, Sri Lanka and Vietnam, and international markets such as China, India, Indonesia, Japan, the Middle East and South Korea. Recommendations have also been made for the introduction of a Mediation Act to strengthen the framework for mediation. With the legal infrastructure to facilitate and support investor- state mediation and jurisprudence supportive of investor-state mediation, Singapore is poised to be an ideal venue for the conduct of investor-state mediation.

The writers are partners at Allen & Gledhill LLP

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18 weeks' jail for fake GST claims

Straits Times
22 Jul 2014
Ian Poh

A FORMER manager of an IT equipment supplier who made fraudulent goods and services tax (GST) refund claims for $117,000 was jailed for 18 weeks yesterday.

Samuel Sim Choon Hock, 34, was also ordered to pay a penalty of nearly $184,000 - three times the amount involved in eight charges he pleaded guilty to. Some 16 similar charges were taken into consideration.

A district court heard that between February 2006 and July 2008, Sim inflated the input tax claims and understated output tax on sales in the GST returns of Netlink Alliance, which is no longer in business.

The inflated declarations were made based on the amount of refunds Sim wanted to obtain, and without any documents to back them up.

He was found out after the Inland Revenue Authority of Singapore noticed a discrepancy during an audit.

During investigations, Sim initially claimed he had misplaced Netlink's documents for the relevant accounting periods and suddenly asked how he could de-register the firm from GST, as it had ceased business operations.

He later admitted he had made the declarations to fraudulently obtain refunds from the taxman, and had used the proceeds for personal and family expenses.

On top of a penalty equivalent to three times the tax undercharged, those convicted of claiming input tax on fictitious purchases or understating ouput tax on sales can be jailed for up to seven years and fined up to $10,000 on each charge.

The biggest GST fraud case to date involved almost $5.7 million in undercharged tax. In August 2010, businessman Mahesh Sukhram Daswani, then 43, was jailed for 54 months and ordered to pay a penalty of almost $17.1 million.


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Mentally ill accused gets life term as life-long treatment needed

Straits Times
15 Jul 2014
Selina Lum

A PARANOID schizophrenic who stabbed to death a fellow cleaner after hallucinating that she posed a threat to him was sentenced to life imprisonment yesterday.

Pua Kok Heng, 57, who has delusions that he is the victim of political persecution, attacked Madam Goh Ah Moy, 62, after she scolded him for using her cleaning equipment at Jurong East MRT station in November 2011.

Yesterday, Justice Lee Seiu Kin said a life term was appropriate, based on psychiatric assessment that Pua needed life-long treatment and has a tendency to not take his medication.

The High Court had heard in April, when he pleaded guilty, that Pua and two other cleaners were deployed to clean the MRT station on Nov 22, 2011. He did not have any cleaning equipment with him so he used mops and pails belonging to Madam Goh.

When she later scolded him for dirtying her equipment, he became irritated and shouted at her to stop. A fellow cleaner pulled him away.

The next morning, Pua heard voices and saw a "floating" image of Madam Goh challenging him to go to the MRT station with a knife. He tucked a knife into the waistband of his shorts and confronted her at the station.

Pua's supervisor, Mr Simon Lim, saw him shouting incoherently at Madam Goh and told him to calm down.

When Pua told him not to interfere and drew his knife, Mr Lim told him he was fired. Pua continued shouting until Mr Lim led Madam Goh to safety.

The next morning, Pua again saw an image of Madam Goh "flying in" from the window and taunting him.

This time, armed with two knives, he went to the MRT station and stabbed her once in the chest with a 20cm blade.

Pua, who has suffered from schizophrenia since 2002, was arrested that evening at his rental flat in Marsiling Road.

He pleaded guilty in April this year to a charge of culpable homicide.

Prosecutors sought a life sentence at the time as they said he posed a high risk of future violence but sentencing was adjourned till yesterday as the High Court wanted clarification from psychiatrists on Pua's condition.


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AGC to simplify language used in Singapore's laws

Straits Times
29 Jul 2014
Walter Sim

THE Attorney-General's Chambers (AGC) is simplifying the language and presentation of Singapore's statutes, amid calls to use plain English in public documents. Instead of "shall", "must" will be used to highlight obligations, for instance.

Each provision will be concisely put in six lines or less "as far as practicable", and complex sentences with multiple parts will be broken down.

To eliminate gender bias in the law, terms such as "the person" will be used in place of "he" or "she" whenever applicable, an AGC spokesman told The Straits Times.

The tweaks to existing laws, which include almost 6,000 Acts of Parliament and pieces of subsidiary legislation, will be made under the Revised Edition of the Laws Act. This permits changes to the language and presentation of the statutes without affecting the meanings of the laws. The last time such a revision was done was in 1985.

New laws to be published on the Subsidiary Legislation Government Gazette from next month will contain these features.

They can already be seen in several recently introduced laws, such as the Public Order (Additional Temporary Measures) Act, which was passed in February, and the Transboundary Haze Bill tabled in Parliament earlier this month.

The changes are spearheaded by the AGC's Legislation and Law Reform Division (LLRD),which conducted a month-long online public survey last year to gather feedback on plausible changes. It received 1,058 responses - 70 per cent from people who are not legally trained.

Chief Legislative Counsel Owi Beng Ki, who heads the LLRD, told The Straits Times: "Singapore laws are being read and used increasingly by laymen."

Last year, the Singapore Statutes website was accessed about three million times - treble the figure for the whole of 2012.

Between July 25 last year and the same date this year, nearly 1.4 million unique visitors went to the site.

About 40 per cent of them were first-time visitors.

"It is vital to ensure that the Singapore laws that the LLRD drafts to give effect to government policies and the legislature's intent are, and remain, understandable to Singaporeans," Mrs Owi said.

"Difficulty in the understanding and use of legislation has consequences like increased litigation and lower productivity in the economy."

Last month, Prime Minister Lee Hsien Loong wrote on Facebook that the Government should be "simple and direct when we communicate with the public".

He called for simple language to be used, regardless of the occasion, instead of "management speak or big words which will not impress anyone".

The Straits Times has reported that organisations such as OCBC Bank, DBS Bank, NTUC Income and the Central Provident Fund Board have started moving towards using plain English in public documents.

The AGC does not have a targeted completion date for its current revision of existing laws.

The spokesman said: "Priority has still to be given to drafting new laws to give effect to policy solutions to current problems."

Director of Stamford Law Corp and book author Adrian Tan said: "This is a timely move. The law is for everyone, not just academics and legal professionals. This initiative will improve access to justice."

Added the steering committee member of the Speak Good English Movement: "I am glad the Attorney-General has taken the lead. Making things simple is difficult."


Background Story

Some guidelines to be adopted

Examples of guidelines the Attorney-General's Chambers will adopt in new statutes, and in revising old ones:

• Use of "must" instead of "shall" to signify obligations
• Use of "however" or "despite" instead of "notwithstanding" wherever applicable
• Use of "under" instead of "pursuant to" wherever applicable
• Use of "this person" instead of "he" or "she" wherever applicable
• Arabic numerals (1, 2, 3...) will replace Roman numerals (I, II, III...)
• Dates will be written without ordinal indicators alongside the numerals. For example, instead of 29th July, dates will be reflected as 29 July
• Each legislative provision will, as far as practicable, not exceed six lines, while complex sentences with multiple parts will be broken down

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Android set-top boxes: Copyright or wrong?

Straits Times
20 Jul 2014
Aw Cheng Wei

Streaming videos is piracy, say pay TV operators; lawyers unclear on liability

Pay TV operators SingTel and StarHub, along with content owners such as Fox and TVB, are crying foul over the rise of cheap Internet boxes which allow users to get premium, high-definition programmes from as low as $6 a month.

But it is unclear if people who buy these Android set-top boxes and subscribe to streaming services are breaking the the law.

On a recent visit to Sim Lim Square, The Sunday Times found more than 10 shops selling these boxes openly. Shopkeepers said sales have gone up from three boxes a day two years ago to more than 10 boxes daily, thanks to sleeker designs and greater consumer awareness.

During the recent football World Cup, some shops sold as many as 18 boxes a day.

A shopkeeper on the third level who wanted to be known only as Louise said: "People have no problems with the services. They can watch all the channels they want. Others who see it want it too."

These boxes, which cost between $120 and $250, are essentially tiny computers running on the Android operating system used in popular smartphones and tablets. They are pre-loaded with apps, such as PPTV and Funshion, which stream movies and TV shows for free.

New apps from China such as CloudTV have also emerged to offer free and premium content.

CloudTV's "English channels" pack for instance offers unlimited viewing of more than 50 channels, including HBO, English Premier League, Discovery and CNN, for US$4.99 (S$6.20) to US$6.99 each month.

Shopkeepers said sales of these boxes are not in breach of any regulation here. One of them, Jason, who declined to give his full name, said: "I've been selling them for about two years. Would I still be here if they were illegal?"

Louise added: "It is not illegal to use Android here."

But pay TV providers, who charge $12.90 to $69.90 for their packages, and content-rights owners call the streaming services "piracy" and warn consumers that those who use them may be infringing copyright.

A StarHub spokesman said: "Sale of boxes which facilitate unauthorised access to content amounts to theft. End users also suffer inconsistency in quality of service and may experience termination of access when the pirate host sites are shut down."

A SingTel spokesman said: "Using apps to access content without the proper IP (intellectural property) rights is illegal and users can be subject to copyright suits."

Executives from Discovery Networks, TVB and Fox International Channels also urged viewers not to support piracy.

Mr Wilfred Chow, senior Intellectual Propety Advisor of Hong Kong's TVB, said: "TVB will take all legal measures, including both criminal and civil actions, to stop unauthorised streaming of our programmes."

Lawyers here say that buying the boxes is likely to be okay, but subscribing to pirated content may not be.

The Ministry of Law said rights owners may take civil action for copyright infringement against users who had been found to access or download programmes for viewing without authorisation.

The grey area is whether such consumers are criminally liable.

Mr Bryan Tan, a partner at Pinsent Masons MPillay, said: "Broadcasting illegal content is an offence but it is still unclear if receiving streaming content is."

Mr Loh CS, a 26-year-old computer engineer who bought a $149 box for his family at an IT show last year, said: "When I bought mine, I definitely got the sense that it was not legal. But it felt like it was too good a deal to pass up."


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Church's ex-board member: Investment idea not mine

Straits Times
15 Jul 2014
Feng Zengkun

Accused tries to distance himself from the others as City Harvest trial resumes

THE City Harvest Church trial resumed yesterday with one of the accused distancing himself from the others.

Former church board member John Lam Leng Hung, the first of the six defendants to take the stand, said the plans to invest church money in bonds had not come from him.

The prosecution believes $24 million was invested in sham bonds, with the money used to bankroll the secular music career of Ms Ho Yeow Sun - the wife of church founder Kong Hee. Another $26.6 million was allegedly used to cover this up.

Lam said it was fellow accused, Chew Eng Han, the church's former investment manager, who had requested a meeting with him in 2007 and then detailed the proposal to invest in the bonds.

The defence has consistently said Ms Ho's pop music career was part of a church-approved Crossover project to evangelise.

"(Chew) said to me he intended to resign from his job and was going to set up a new fund management company," Lam said. "He proposed that he be the fund manager to invest the church's surplus funds."

According to Lam, Chew suggested that music production firm Xtron Productions - then Ms Ho's manager - issue a bond which the church could invest in.

The money would then be used to finance the Crossover project, which included Ms Ho's new album.

"He said the bond could be repaid from (her) album sales," said Lam.

Questioned by his lawyer, Mr Kenneth Tan, Lam said he believed the Xtron bonds were a sound investment because Ms Ho had been "very successful" in her previous albums and he trusted Chew to have done due diligence.

Chew had also assured him that, if the new album failed, Xtron director and Indonesian businessman Wahju Hanafi - a long-time church member - would personally repay the church.

"I knew Wahju was a high-net-worth individual... and his wife also comes from a rich family, so I took comfort from those facts," Lam said.

While the prosecution had previously shown e-mail exchanges between some of the accused suggesting that Xtron had cash-flow problems, Lam said he had not seen e-mails and documents related to the firm's cash flows until the trial started.

Earlier in the day, his lawyer also sought to paint him as a "volunteer" who only helped out with the others' queries on an ad hoc basis.

Mr Tan said: "He doesn't run the Crossover and he's not involved in Xtron. He seems to pop up here and there, but that's because he's an accountant, so whenever there is an issue he is asked."

Lam also said yesterday that City Harvest board members had backed Ms Ho's music as a way to evangelise as far back as 2002.

The board members had also agreed the church's support should be discreet so young "unchurched" people - a key target of the church's outreach - would not dismiss her music as "yet another church-sponsored project".

Ms Ho, who had appeared on the first day of the trial's previous tranches, was not seen yesterday. She is expected to be called as a witness.

The trial continues.


Background Story

About the case

CITY Harvest Church founder Kong Hee and five deputies are on trial for allegedly misappropriating church funds by investing in sham bonds.

They are said to have funnelled $24 million into two companies run by long-time supporters of the megachurch - music production firm Xtron and glass manufacturer Firna.

This was purportedly to bankroll the secular pop music career of Kong's singer wife Ho Yeow Sun, as part of the megachurch's Crossover project to evangelise to "unchurched" youth.

Another $26.6 million was then allegedly spent to cover their tracks.

Ms Ho is expected to be called as a defence witness.

The defence started its case yesterday, with former board member John Lam Leng Hung, 46, on the stand.

He faces three counts of criminal breach of trust (CBT).

After that, Kong, 49, will be called to the stand. He also faces three counts of CBT.

Following that will be the turn of finance manager Sharon Tan, 38, who faces three counts of CBT and four of falsifying accounts.

Former investment manager Chew Eng Han, 54, deputy senior pastor Tan Ye Peng, 41, and former finance manager Serina Wee, 37, will then take turns on the stand. They each face six counts of CBT and four of falsifying accounts.

Chew has discharged his lawyer and will defend himself for the rest of the trial.

He quit the church in June last year - just a month after the high-profile trial started.

Prosecutors have sought to show how Xtron and Firna directors had simply done the bidding of the accused and rubber-stamped deals.

Meanwhile, the defence has argued that the transactions were legitimate, with the six accused acting "in good faith" on the advice of lawyers and auditors.

Criminal breach of trust is punishable with a life sentence, or up to 20 years' jail and a fine. Falsification of accounts carries up to 10 years in jail, a fine, or both.


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Independent directors: use different approach: Mailbag

Business Times
29 Jul 2014
Mark Yuen Teen

I REFER to the report "Keppel leads the pack in governance and transparency" (BT, July 25) in which I was quoted as posing a question to a panel discussion at the CPA Australia forum, where the results of the latest Governance and Transparency Index (GTI) were presented.

The question I posed was in response to a discussion about the "nine-year" guideline on independent directors in the 2012 Code of Corporate Governance, under which the independence of directors should be subjected to a "particularly rigorous review" after nine years. In addition to the lack of clear guidance on how a "particularly rigorous review" is to be conducted, I was concerned about relying solely on the nominating committee or the board to determine if a director who has served beyond nine years should continue to be considered to be independent. This is because of the inherent conflict faced by the nominating committee and the board in this.

In fact, the nominating committee and the board are also conflicted in the initial and ongoing assessment of independence of directors, and in other issues such as recommending board appointments and re- election/retirement of directors. In the case of the latter issues, a check-and-balance is having shareholders vote on the election or re-election of directors.

In countries such as Malaysia and Hong Kong, the code of corporate governance recommends that the independence of directors should be subject to a separate shareholders' vote after nine years. If shareholders vote against the independence of the directors in this separate vote, then the company can still choose to retain the director as a non-executive director, but should not label him as an independent director. Alternatively, the board can just redesignate the director as a non-independent, non-executive director, without seeking a shareholders' vote.

At the forum, I had expressed doubt about whether such a shareholders' vote would be effective, if all shareholders get to vote on the continuing independence of the directors after nine years. After all, those who are familiar with our corporate landscape would know that there are many independent directors who have an inter-dependent relationship with controlling shareholders. If the vote is to be meaningful, then controlling shareholders should not vote. If we are unwilling to follow a highly prescriptive approach whereby a director is automatically considered non-independent after a certain number of years and prefer to adopt a more principle-based approach instead, then we need to do more than just ask boards to undertake a "particularly rigorous review" and leave it to the nominating committee and board members to assess each other's independence for as long as an independent director continues to serve on the board.

A common objection to such a proposal is that minority investors are not sufficiently informed to vote on the independence of directors because independence is "a state of mind". Other objections are that certain minority investors, such as activist funds, may have vested interests, or that institutional investors may blindly follow the advice of proxy advisory firms and adopt a "tick the box" approach to independence.

Yet, we are prepared to have rules on interested-party transactions where only disinterested shareholders are allowed to vote - in effect to allow these shareholders alone to assess and decide on the merit of these transactions. We do this precisely to mitigate the conflict of interest of having shareholders vote on transactions in which they have an interest.

And, of course, no one would argue that minority shareholders should not be allowed to vote on the election of directors because they are not in a position to determine if a director is sufficiently qualified to serve on the board. It is always easy to argue against change and to cite the possible negative implications of changes. These arguments fail to consider the unsatisfactory nature of the existing practice whereby the assessment of the independence and continuing independence of directors is left solely in the hands of a conflicted nominating committee and board, with controlling shareholders wielding considerable influence on the continuing service of independent directors.

If we want to take a more conservative approach to the issue of having non-controlling shareholders vote on the continuing independence of directors after nine years, we can make this vote non-binding. In other words, the vote is merely feedback from the non-controlling shareholders to the board as to whether they perceive the director to be independent and this feedback is taken into account by the board in assessing the independence of a director.

We may be underestimating the ability of minority shareholders to gauge the independence of a director (or whether a director is moribund) after nine years of observing the behaviour of the director at shareholders' meetings. After all, perception is an important factor in determining independence.

Mak Yuen Teen

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Streamline by letting one agency handle applications for legal matters: Forum

Straits Times
20 Jul 2014

If one were to make provisions in case of mental incapacity and eventual death, one has to consider preparing various documents ("Easier, cheaper to apply for Lasting Power of Attorney"; last Sunday).

The Lasting Power of Attorney (LPA) is overseen by the Office of the Public Guardian, while wills are administered by the Insolvency and Public Trustee's Office. Then, there is the Advance Medical Directive, which is managed by the Ministry of Health, while trusts are handled by law firms.

The Government should streamline all these functions for one agency to handle, to enable one-stop applications.

That said, the registration fee for both Form 1 and Form 2 for the LPA should be waived for an indefinite period, instead of only two years for Form 1, to allow more people to sign up.The authorities should also review the professional fees charged by certificate issuers, which can vary widely.

Francis Cheng

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Balanced position on including business numbers in Do Not Call registry: Forum

Straits Times
15 Jul 2014

WE REFER to Mr Tan Kin Lian's letter ("Let firms join Do Not Call list"; Forum Online, June 23).

The Do Not Call (DNC) rules were arrived at after a round of public consultation from Oct 31 to Dec 5 in 2011.

Mr Tan's suggestion for the DNC Registry to also include business phone numbers was one of the options mooted in the consultation in October 2011.

The views on this suggestion were divided. Some respondents were in favour, while others highlighted that allowing business numbers to be registered with the DNC Registry could impact daily business-to-business marketing practices such as business referrals.

The position that was eventually adopted was a balanced one. Businesses that do not wish to receive consumer telemarketing messages can register their Singapore business telephone numbers with the DNC Registry. Organisations, however, are allowed to send business-to-business telemarketing messages without the need to check the Registry.

Evelyn Goh (Ms)

Director, Communications, Planning & Policy

Personal Data Protection Commission

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Some security staff unsure of data Act

Straits Times
28 Jul 2014
Irene Tham

Not all at building reception counters clear on use, storage of visitors' data

SINGAPORE'S Personal Data Protection Act may have kicked in earlier this month, but not all security guards and building front-line staff are prepared for the new law, which mandates they must answer questions by visitors on how data is used and stored.

A check by The Straits Times at several building reception counters, where security guards routinely ask visitors to hand over their identity cards to gain entry, found that few had all the answers at their fingertips.

With the full implementation of the Act on July 2, visitors must be informed of what information on them is collected and what the data is used for.

A person may also request in writing for access to his personal data held by the building owner.

The Straits Times visited five commercial buildings: One Raffles Quay, One Marina Boulevard, Raffles City Tower, Mapletree Business City in Pasir Panjang Road and the SGX Centre in Shenton Way.

One Raffles Quay's building owner holds on to a person's identity card in exchange for a visitor's pass, which is allowed under the Act. As such, no personal data is recorded.

The other four buildings record a visitor's name, contact details and identity card number into a computer.

Their security guards were asked four questions:

• What personal data is collected?
• What is the data used for?
• How long is the data kept?
• How may a visitor access his recorded personal information held by the building owner?

Answers to the first two questions were readily available at One Marina Boulevard and Raffles City Tower, which had a notice stating that visitors' personal data would be collected for "security" and "emergency" purposes.

The notice at One Marina Boulevard contained the e-mail address of its security chief, while the Raffles City Tower security manager's e-mail address was given only when requested.

When contacted, both confirmed the purpose was for "contact tracing" during emergencies like a severe acute respiratory syndrome outbreak.

One Marina Boulevard's security chief could not confirm how long a visitor's personal data would be kept, while Raffles City Tower's security manager said data is stored for six months from the date of the last visit.

When asked to access personal data held, One Marina Boulevard's security chief required the exact date and time of this reporter's last visit, as well as the identity card number, before doing so.

However, Raffles City Tower's security manager did not provide such access. Over at Mapletree Business City and SGX Centre, no "personal data protection" notices were displayed.

A security guard at Mapletree Business City said data collection was for tracking people entering and leaving the building.

He supplied two phone numbers for reaching the building's fire control chief and manager of operations. The former could not answer any questions except to say that data collection is a "normal process", while the latter had left the job five months earlier.

A security guard at SGX Centre said visitors' personal data is "flushed out" when they leave the building. However, its security chief said a visitor's name and identity card number would be kept for "a few years".

Both Mapletree Business City and SGX Centre did not have a process for visitors to access any of their personal data held.

When contacted, a spokesman at Mapletree Investments, which owns Mapletree Business City, said it will continue to work with its security contractor "to equip staff with better knowledge".

Singapore Land, which owns SGX Centre, could not be reached for comment.

Building owners should be ready to handle data protection queries

LAWYERS said building owners should be better prepared for Singapore's Personal Data Protection Act.

For instance, they should readily answer visitors' questions on what information on them is collected, how the data is used, how long it is kept and how they may retrieve their personal information held by the building owners.

"They ought to be better prepared," said lawyer Gilbert Leong, a partner at Rodyk & Davidson.

Lawyer Bryan Tan, a partner at Pinsent Masons MPillay, concurred, saying: "Even if some of the security guards do not know the answer, they should at least direct people to the website or to the data protection officer."

Lawyer Jonathan Kok, partner at RHTLaw Taylor Wessing said that an individual may request for a record of his personal data from building owners, for instance, by filling up request forms.

The Personal Data Protection Commission said that security guards and receptionists should provide the public with contact numbers for any enquiries on the building's data protection policies.

The Commission said it has been educating organisations since last August, and has reached about 12,000 representatives from the banking, retail, real estate, security and building management sectors.

The public is concerned about information abuse.

Engineer Ngiam Shih Tung, 47, said: "It is too easy to create a database of people's identity numbers, which are used for accessing all sorts of sensitive citizen data like income tax records."

Teacher Kuang Jingkai, 32, said the retention of one's identity card by building owners should be "outlawed".

His identity card was fraudulently used by a shop assistant to apply for mobile phone lines 10 years ago.

"I was blacklisted by all the telcos and had to make two visits to the police station," he said.


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Lasting Power of Attorney: Good to let public know about options - Forum

Straits Times
20 Jul 2014

It is heartening to note that the Government is encouraging people to apply for the Lasting Power of Attorney ("Easier, cheaper to apply for Lasting Power of Attorney"; last Sunday).

It is even waiving the registration fee for the basic form of the document for two years.

Prior to this, the usual procedure would be to engage a law firm to make the application, even though this is not necessary, as the word "attorney" tends to give people the impression that such

a procedure must be handled by a lawyer - resulting in higher costs.

The Government is now taking the right step to inform the public of the alternatives.

It should also exhort all practising lawyers - by fiat if necessary - to educate potential clients on the availability of all such (cheaper) alternatives should they be consulted on how to make a Lasting Power of Attorney.

Wan Siew Kay

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Does corporate governance matter?

Business Times
15 Jul 2014
Francis Kan

Regardless of size, companies need high standards of corporate governance if they are to create sustainable value in the long term

GOOD corporate governance practices are essential for achieving superior performance, even if the lack of transparency within an organisation may not necessarily affect its share price or bottom line in the short term.

Some companies have argued that having a low transparency rating has not really affected their business prospects or share price performance, but experts argue that the goals of good governance are not limited to maximising short term profits but, rather, creating sustainable value in the long run.

"Good governance may not be reflected in the short term as indicated in the current share price, as the benefits reaped from good governance occur over a period of time. It is part of corporate culture, and cannot be built overnight or over a year," says Irving Low, head of risk consulting at KPMG in Singapore.

Companies that demonstrate and communicate how their governance practices are adequate and effective often attract higher levels of investment as investors have greater confidence in their board and management. On the flip side, potential investors will be more wary of poorly rated companies and evaluate whether the information they disclose is adequate.

A KPMG Audit Committee Institute study found that investors are willing to pay more for companies demonstrating good governance with similar financial performance compared to those that did not demonstrate high governance standards.

Other stakeholders, including rating agencies and institutional funds, are also increasingly assessing - and incorporating into due diligence processes - the strength of a company based on disclosures in their annual report, and what risk and governance systems they have in place.

Albert Ho, managing director of boutique investment firm Centrum Capital, acknowledges that a low rating would probably not affect a company's business prospects or share price performance. Instead, a firm's business prospects hinge on its business fundamentals.

Meanwhile, a firm's share price performance may not trade in line with its business prospects for reasons beyond just corporate governance, he added.

"Intuitively, one would presume that a company with sound business fundamentals and good growth potential can expect its share price to perform well. However, there are such listed companies that could be trading well below their intrinsic valuations and this can be due to a variety of reasons that have nothing to do with how they perform in terms of governance," says Mr Ho, who is also the Singapore divisional councillor at CPA Australia.

However, Gerald David of the Securities Investors Association (Singapore) (SIAS) argues that stock market pricing is about investors' perception of the firm's intrinsic value. "Hence, any actions by firms that will increase investors' confidence will not hurt but help in their valuation," says Mr Gerald, the president of SIAS, an organisation that actively promotes investors' interests by highlighting and recognising the efforts of companies that uphold good corporate governance practices.

Smaller cap companies, particularly those with a controlling shareholder leading the business, sometimes do not feel compelled to disclose more as the public float is small and therefore of little impact on the share price. Driving their share price higher may also not be a key priority for such entities. However, as these companies grow bigger and more complex, many would naturally gravitate towards implementing some form of risk and governance systems.

But Mr Gerald believes that robust governance is even more critical for smaller cap companies as it will enable them to have easier access to investors as well as capital for their growth.

"In reality, good governance and transparency are equally, if not more, important for smaller market cap companies. There is empirical evidence that companies with good governance have better performance," says Mr Gerald.

Nor is it always the case that smaller companies are less transparent, he notes. According to research by SIAS, smaller companies such as Eu Yan Sang, Micromechanics and Qian Hu have higher scores than some of the larger ones. "Size does not determine the governance score. It's the culture and practice of a company," says Mr Gerald.

Deborah Ong, partner and risk & quality leader at PricewaterhouseCoopers, agrees, saying that good governance and transparency will ensure appropriate accountability to minority shareholders.

"It is important for listed companies, both large and small, to be transparent and timely in their disclosure if they want to create successful and sustainable businesses that are consistent with global standards," says Ms Ong, who is also a board member at CPA Australia.

So should poorly rated companies in terms of transparency be shunned by investors? Not necessarily so, argues Mr Ho, whose firm manages a portfolio of assets and invests in promising companies with high growth potential.

"Investors make investment decisions based on quantitative and qualitative considerations. As mentioned above, there are some big cap and financially stable companies that ranked poorly under the Corporate Governance Index," he says.

Indeed, investors may choose to invest in less transparent, and hence riskier, companies because of the higher returns associated with these entities.

That said, while the cause of a low rating could be due to many different underlying factors, it does signal to investors the need to pay closer attention. As such, they should analyse the company in greater detail and ask more questions at meetings�to clarify their concerns.

"At the end of the day, investors must manage the risks of investing and invest with all the facts known and studied," says Mr Gerald.

The previous Asian and global financial crises suggest that companies with weaker or no formal risk and governance structure will not survive. In general, companies in Asia fared better during the global financial crisis, primarily due to the lessons from the 1997 Asian financial crisis. "Such companies in this region became more resilient and are better able to withstand financial shocks," says Mr Low.

Ultimately, companies that fail to implement a good system of corporate governance will face difficulties in attracting capital and building a long-term sustainable business, the experts say.

"A significant risk is the self-interest of management, whose focus may be on short-term returns rather than the objectives of the shareholders. Therefore, it is important to have a robust framework and systems that evaluate all business risks to create a successful and sustainable business, and transparency to shareholders," says Ms Ong.

Companies that fail to establish adequate and effective risk management and internal control systems are also more likely to face business disruption as they are unable to measure, monitor and manage the risk event as and when it arises.

"In addition, without clear roles and responsibilities among the board, board committees and management, the ability to make decisions in a timely and effective manner is lost and business disruption could occur," says Mr Low.

And as the competition for investment capital becomes more intense, investors are demanding more of companies today. "No longer can companies be content with their existing standards of corporate governance practices. They need to strive to embody best practices like board independence, diversity, sustainability and equitable treatment of shareholders to attract capital," says Mr Gerald.

This is the third in a four-part thought leadership series brought to you by CPA Australia, in conjunction with this year's CPA Forum on governance and transparency that will be held on July 24, 2014

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

Organisations must identify themselves when telemarketing: Forum

Straits Times
28 Jul 2014

THE Personal Data Protection Commission (PDPC) has contacted Ms Li Dan Yue (“Reporting calls from ‘unknown’ numbers”; last Tuesday) and is investigating the matter.

One of the requirements of the Do Not Call (DNC) Registry is for organisations that send telemarketing messages to identify themselves in their messages and provide information on how recipients can contact them.

Organisations making telemarketing voice calls are also not allowed to conceal their telephone numbers (for example, they cannot make telemarketing calls using private numbers displayed as "unknown").

Individuals who receive such unsolicited telemarketing messages may wish to report such cases to the PDPC through our website at www.pdpc.gov.sg

Evelyn Goh (Ms)

Director, Communications, Planning & Policy

Personal Data Protection Commission

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Two drug traffickers hanged

Straits Times
19 Jul 2014
Tham Yuen-C

First executions here since changes to death penalty regime

TWO Singaporeans on death row were executed yesterday morning, in the first hangings carried out here since legislative changes to the mandatory death penalty came into force on Jan 1 last year.

Convicted drug traffickers Tang Hai Liang and Foong Chee Peng, were hanged in Changi Prison Complex, after they decided not to be considered for re-sentencing under the new laws.

Tang was 36 years old and Foong was 48.

They were convicted of trafficking in heroin in 2010 and 2011 respectively, said the Central Narcotics Bureau (CNB) in a statement yesterday.

The legislative changes were passed by Parliament in November 2012 after a review of the mandatory death penalty.

A moratorium on executions was called in July 2011 when the Government started the review.

Under the new laws, judges will have the discretion to impose a life sentence instead of death

for certain instances of murder and drug trafficking. After they came into force in January last year, 35 people awaiting capital punishment - 28 for drug offences and seven for murder - were given the chance to be considered for re-sentencing under the new regime.

Tang and Foong were among them, but had chosen not to go through the process, said the CNB spokesman yesterday.

Both men had also indicated their preference for this before a High Court assistant registrar, adding that "they understood the consequences of their respective decisions".

The bureau did not say why they had decided not to go through re-sentencing.

Tang had brought into Singapore 89.55g of heroin, and Foong, 40.23g. These quantities were higher than the 15g limit that triggers the death penalty.

CNB confirmed that both men were represented by lawyers throughout the process.

They had also been given the opportunity to petition for clemency from President Tony Tan Keng Yam - but they turned it down.

Singapore is one of few industrialised countries in the world that has retained the death penalty.

During the Parliamentary debate to pass the changes to the mandatory death penalty laws, Law Minister K. Shanmugam and Home Affairs Minister Teo Chee Hean had emphasised that the death penalty has played a big part in deterring drug trafficking here and would remain so.

They also said that the new laws - which removed the death penalty for certain drug offences - would give drug couriers an incentive to help the authorities nab "bigger fish".

Bishan-Toa Payoh GRC's Hri Kumar Nair said yesterday that the changes to the law have resulted in some death sentences being changed to life imprisonment.

Among the 35 on death row when the new laws kicked in, nine have been re-sentenced to life imprisonment, with some getting caning as well, the Ministry of Home Affairs said yesterday.

Another 22 are at various stages of the appeal, re-sentencing or clemency processes, and some have filed other legal challenges.

"Going forward, there will be cases where the Courts will give life imprisonment instead of a death sentence," said Mr Nair, who is also chairman of the Government Parliamentary Committee for Home Affairs.

He added that having deterrent sentencing is a necessary, but not a sufficient, tool against the drug menace, when asked about the impact of the new laws on drug offenders.

Other factors, such as price, demand and connectivity also come to play, he said.

"We have calibrated the sentencing regime as circumstances have changed," said Mr Nair. "It is difficult to say what will happen in the future. I personally hope that we give more discretion to the Courts and send fewer people to the gallows."



*****************Background Story *****************


Reprieve at the gallows: 22 on death row wait to hear their fate

THERE are 22 people who are still waiting to see if they will be spared the gallows since the mandatory death penalty for certain offences were removed on Jan 1 last year.

The cases against them are now at various stages of the appeal, re-sentencing or clemency process. Some have filed other legal challenges, said the Ministry of Home Affairs yesterday, without elaborating.

The 22 were part of a group of 35 who were on death row until July 2011, when a moratorium on executions kicked in as the Government began a review of the mandatory death penalty regime.

Seven of them had been convicted of murder and 28 of drug offences.

Since the new statutory provisions came into force, one man had his conviction set aside by the Court of Appeal, while another died from natural causes.

Nine others had applied to the courts for their sentences to be reviewed and have since been re-sentenced to life imprisonment. Some were also given caning.

The Attorney-General's Chambers has filed appeals against the life sentences in two of these cases, said the ministry.

In November last year, Malaysian Yong Vui Kong became the first drug trafficker on death row to have his sentence commuted to life imprisonment under the new regime.

He was arrested in June 2007, at the age of 19, for possession of 42g of heroin. Because of his age, his case attracted the attention of human rights activists and was widely covered by the media.

Two Singaporeans, Tang Hai Liang, 36, and Foong Chee Peng, 48, who were found guilty of trafficking in heroin, chose not to be re-sentenced under the new laws. They were executed yesterday.

The ministry spokesman added that there has been one person sentenced to the death penalty since Jan 1 last year.


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Study sought on default death sentence

Straits Times
14 Jul 2014
Hoe Pei Shan

It would affect those who abuse kids, sexually hurt women, causing death

THE committee reviewing Singapore's homicide laws has been asked to study whether a default death sentence on criminals who sexually assault women or abuse children, leading to the victims' deaths, should be introduced.

The suggestion for this stiffening of the law came from none other than Law Minister K. Shanmugam who elaborated on his view for the first time since raising the issue in May.

"My thinking is that there should be a default death sentence for those who rape or sexually assault women, resulting in the victim's death, and for those who hurt a child and the child ends up dead," he had been quoted as saying then.

"The accused in such cases should face the death penalty, unless he can prove why there shouldn't be such a penalty."

Speaking yesterday on the sidelines of a Yishun community event, he said that "these are personal views". "But I've asked for these to be considered carefully, not just by the committee but by my own ministry," he added.

A default death sentence "does not mean that there will be a death sentence, but that the onus is on the attacker, usually a man, to prove that he didn't intend to cause it (the victim's death)", said Mr Shanmugam.

Criminal lawyer Sunil Sudheesan, a member of the review committee set up by the Ministry of Law, told The Straits Times yesterday that Mr Shanmugam's suggestion is indeed among the issues considered, and that the committee's report would be out soon.

Mr Shanmugam's suggestion has taken some in the legal fraternity by surprise.

"The amendments mooted by the Law Minister, depending on how they are phrased, appear to take away the discretion of the courts to look at the intention and personal culpability of the accused in arriving at an appropriate sentence," said Mr Terence Tan, a criminal lawyer with Peter Low LLC.

Mr Tan said although the crimes highlighted by Mr Shanmugam "could be seen as particularly heinous", they seem to already be covered under existing statutes.

Ms Gloria James-Civetta, a criminal lawyer of 19 years, said: "A default death sentence would seem very harsh, I hope there will be research done and measures taken for feedback and public consultation to see whether this would really be necessary."


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Little that global law can offer MH17 victims

Straits Times
27 Jul 2014
Andy Ho

The world was horrified when a Malaysia Airlines Boeing 777 aircraft was downed on July 17 over eastern Ukraine, killing all 298 people on board.

The United States has offered audio and visual data suggesting Russian complicity, and accused Moscow of "creating the conditions" for the MH17 shootdown.

That region of Ukraine is controlled by Russia-backed separatists who claim they do not have missiles capable of shooting down a jetliner. Russia denies supplying the rebels missiles. Both blame Ukraine instead.

The dead are from 17 countries, mainly the Netherlands, Malaysia and Australia. In the aftermath of the tragedy, one big question is, what can be done to secure justice for the victims and their families?

The short answer is, perhaps very little.

In terms of immediate action, the United Nations Security Council could adopt a militarily enforceable resolution calling for an immediate ceasefire and withdrawal of all forces to internationally recognised boundaries.

But Russia has veto power in the Security Council. So this resolution is unlikely to be adopted.

The US and Europe had already imposed sanctions on Russia after it annexed Crimea from Ukraine. Now British Premier David Cameron is calling for yet more sanctions over the MH17 crash.

What else may happen?

In terms of investigations, the separatists have handed over to Malaysia the aircraft's black boxes, which have been flown to a London lab authorised by the UN International Civil Aviation Organisation (ICAO).

Malaysia may request an ICAO fact-finding mission to determine the circumstances leading up to the disaster to see who was responsible - the separatists, Russia or Ukraine.

If blame can be determined, the parties may agree on compensation. But if ICAO cannot conclusively ascribe blame, as was the case with the Soviet shootdown of Korean Airlines Flight 007 over the Kamchatka Peninsula in 1983, it will have to dismiss Malaysia's claims.

In terms of litigation, Kuala Lumpur can then appeal the ICAO decision at the International Court of Justice (ICJ). All UN members are subject to the court's jurisdiction.

Malaysia can ask the court to rule if Russia, say, violated global conventions on safeguarding civilian flights and, if it did, order Moscow to pay compensation.

So any litigation in the first instance is likely to be a civil claim at the ICJ for compensation and damages. Malaysia and the 16 other countries whose citizens were on board MH17 may initiate such action against responsible parties.

For such action to succeed, however, what is critical is the forensic evidence - especially to pinpoint the type of missile used and where it was fired from.

But in the days after MH17 was downed, it was plain for all to see that the evidence was being compromised with rebels and villagers traipsing all over the crash site.

People who enter a crash site may not only take evidence away but also plant some.

Could the ICJ find Russia liable? Yes, if it is proven that Russian-backed rebels fired the missile and Russia provided the missile, training or financing.

The ICJ decided so in 1986, when it found the US liable for the loss of lives and damage to property inflicted by the Nicaraguan Contra rebels, because the US had armed, trained and bankrolled them.

If Russia were found liable, it would have to pay compensation. But if it refuses, no one would be able to do much because ICJ rulings are enforced by the UN Security Council, where Russia has veto power. Still, it might pay up if that sees Western sanctions reduced or even terminated.

Could the ICJ also find Ukraine guilty? Yes, if its very first case, tried in 1947, is any precedent. There, Albania was held liable for the loss of lives and damage to property when British naval ships struck mines while passing through the Corfu Channel between Greece and Albania.

The ICJ ruled that even if Albania did not lay the mines, it was liable as it was aware of the risk but did not inform other states.

So even if Ukraine did not fire the missile, it could be held liable if it knew that separatists within its borders had missiles that could hit a global civilian aircraft, but failed to alert other nations.

The ICJ process involves states only. So what about individual perpetrators being compelled to stand trial?

This would need the International Criminal Court (ICC), which can investigate and bring charges against individuals for war crimes, genocide or crimes against humanity - if it establishes who fired the missile that hit MH17 and that they knew the target was a passenger jet.

If the Ukrainian separatists fired the missile but the weapon was supplied by Russia, and Moscow knew how it would be used, then any Russian officials involved could be held liable too.

But ICC involvement looks quite unlikely in the MH17 case.

Here's why.

First, war crime charges are usually only initiated when a pattern of behaviour over an extended period is established, not for a one-off incident. For example, Serbian president Slobodan Milosevic was charged with ethnic cleansing of hundreds of Kosovo Albanians and hundreds of non-Serbs in Croatia and Bosnia during his tenure.

Second, Malaysia is not a signatory to the Rome statute under which the ICC was set up. And while Russia and Ukraine are signatories, neither has ratified the statute. So the ICC has no jurisdiction over the case.

The UN Security Council can refer a case to the ICC and that would give it jurisdiction, but Russia would likely veto such a move.

The ICC can also initiate cases on its own. If it did so and its investigations led to it issuing arrest warrants for perpetrators it identified, it would still need Ukraine or Russia to arrest the accused and send them to be tried.

So an ICC case, though possible, is not very likely.

It would be much easier to prosecute the alleged killers in domestic jurisdictions.

Since the main hurdle is arresting the accused persons, criminal prosecution in Ukraine or Russia would make the best sense - if these states want to.

But whether they will initiate such criminal prosecutions will likely be politically determined.

All in all, international law seems to offer little justice for those who perished on MH17 and their kin.


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Defamation suit: Two win damages against ex-club president

Straits Times
19 Jul 2014
Elena Chong

TWO former management committee members of the Singapore Swimming Club (SSC) have each been awarded $50,000 in damages in a defamation suit against ousted president Freddie Koh.

The damages were awarded to Mr Gope Ramchand and Mr Gary Oon Hong Siang on Thursday by Deputy Registrar Constance Tay after an assessment hearing.

She also awarded them $20,000 in costs.

The duo were members of the management committee before Mr Koh assumed the post of president in 2008.

While in office, Mr Koh, 68, made defamatory remarks at two management committee meetings about a previous committee's decision to purchase a water filtration package for two Olympic-sized swimming pools.

In a separate action brought in 2009 by four other members of the previous committee, the Court of Appeal found Mr Koh liable for the same defamatory remarks and awarded $50,000 to each of them.

Mr Koh used about $1.5 million in club funds to defend the defamation suit brought by Mr Bernard Chan, Mr Robin Tan, Mr Nicholas Chong and Mr Michael Ho, which he lost.

In November 2011, the Court of Appeal found that he was conducting a "witch hunt", had an agenda of his own, and had acted with malice.

Mr Ramchand and Mr Oon, represented by Ms Chang Man Phing from WongPartnership, claimed Mr Koh's defamatory statements left them "embarrassed and humiliated", and caused "serious damage to their reputation and standing in the club".

In April, the hearing of the assessment of the two plaintiffs' claim went before Ms Tay in the State Courts when Mr Koh's lawyer R.S. Bajwa submitted nominal damages of $1.

Ms Chang argued that the damages should be the same as that awarded to the four previous committee members at $50,000 each.

Mr Koh was ousted as president at an extraordinary general meeting in March 2012.

Members had voted for him to repay all the legal expenses he incurred while defending the case.

A hearing of the club's suit to recover $1.5 million from Mr Koh has ended and judgment has been reserved.


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6 accused in City Harvest trial back in court today

Straits Times
14 Jul 2014
Walter Sim

CITY Harvest Church founder Kong Hee and his five deputies will return to court today, as the highly watched criminal trial against them resumes.

The six accused from the mega church – which celebrates its 25th anniversary next weekend – are expected to finally testify under oath.

They are likely to take the witness stand in the following order: former board member John Lam Leng Hung, 46; Kong, 49; finance manager Sharon Tan Shao Yuen, 38; former treasurer Chew Eng Han, 54; deputy senior pastor Tan Ye Peng, 41; and former finance manager Serina Wee Gek Yin, 37.

The Straits Times understands that Lam will call one witness – a church board member – while Chew has a list of 10 witnesses, including church staff and Kong's secular pop music singer wife, Ms Ho Yeow Sun.

The protracted trial started in May 15 last year and, over 42 days of hearings, has heard evidence from 14 prosecution witnesses.

The trial is now expected to last until next April, instead of this September as previously indicated. It will run from today until Friday, and then from Aug 4 to 29. Sept 8 to 30 have also been set aside for hearings.

The six are accused of various counts of criminal breach of trust and falsifying accounts by misappropriating $24 million in sham bond investments, and "round- tripping" another $26.6 million to cover it up. The funds are said to have been used to bankroll Ms Ho's pop music career.

Defence lawyers had earlier failed to convince Presiding Judge of the State Courts See Kee Oon to throw out the case on the basis of insufficient evidence built up by the prosecution, for each of the charges against their clients.

The main thrust of the defence case thus far is that the accused have never acted with any dishonest intent, nor harboured any intention to mislead or conceal any information. They have also argued that the church has not suffered any monetary losses from the investments, with the bonds having been repaid with interest.

One person to watch would be Chew who discharged his lawyer, Senior Counsel Michael Khoo, in May and will be defending himself for the rest of the trial. Chew also quit the church abruptly in June last year, prompted by what he said was "a collision of primarily spiritual and moral principles".


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Woman not allowed to claim damages for dead son

26 Jul 2014
Ashley Chia

Ruling reversed as she has no legal capacity for claim, says court

SINGAPORE — The Court of Appeal yesterday ruled that a mother whose 18-year-old son succumbed to his injuries after a motor accident will not be allowed to claim damages from insurers on his behalf as she has no legal capacity to do so.

The decision reverses earlier rulings by the District Court and the High Court that allowed Mdm Krishnasamy Pushpavathi to claim damages based on a court order she obtained from Liberty Insurance to act for her son after his death.

The insurer had resisted this, taking the view that the death of her son, Maran Kannakasabi, had rendered its offer of compensation “incapable of being accepted”, and appealed.

In a 25-page written judgment released yesterday, Chief Justice Sundaresh Menon and Judge of Appeal Chao Hick Tin said although Mdm Pushpavathi had obtained a substitution order to act for her son to collect S$500,000 in compensation, it was necessary for her to first obtain letters of administration.

The judges said in cases of intestacy — where a person dies without making a will — the court “jealously guards” the assets of the deceased’s estate.

“In principle, unless and until letters of administration are granted, it must be uncertain as to who may legitimately act for the estate. It would be question-begging to hold otherwise,” they said.

 “Thus, the obtaining of proper letters of administration is not a mere formality or technicality but a rule conveying substantive rights and, as such, should not be easily overridden.”

Maran was severely injured in a traffic accident in July 2006, which caused him to be in a persistent vegetative state. Mdm Pushpavathi filed a claim on his behalf in the State Court against Liberty Insurance, the insurer of the driver involved in the accident.

During the first round of the hearing in September 2011, the insurer made an offer of S$500,000 to settle but received a counter-offer of S$850,000.

However, Maran passed away in March 2012 before the second round of the hearing, which had been fixed for April in the same year.

Two weeks after his death, Mdm Pushpavathi obtained a court order to be made party to the proceedings as the legal representative of her son’s estate. A notice was then served on Liberty Insurance accepting the offer. Coincidentally, the insurer served a notice withdrawing the offer the same day.

Mdm Pushpavathi was aware that she had not applied for letters of administration, but said the court order was necessary as it would have taken her some months to obtain them.

Liberty then launched an appeal to argue that the initial sum offered was too much, as the victim’s death meant there was no need to include medical costs. The District Court, however, ruled in Mdm Pushpavathi’s favour and said an overpayment may not necessarily be “unjust” — a decision that the insurer appealed against.

Speaking to TODAY, Liberty’s counsel M Ramasamy, from M Rama Law Corporation, said the Court of Appeal ruling does not mean Mdm Pushpavathi will not be entitled to any compensation. He understands that she is presently obtaining letters of administration and the final amount for damages will be assessed by the court.

Mdm Pushpavathi’s lawyer, Ms Susila Ganesan of Just Law, declined to comment.


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Dell sues ‘demoted’ Asia executive to stop him joining HP

Business Times
19 Jul 2014
Andrea Tan

This Bloomberg article was first published on 19 July 2014 in the Singapore English broadsheet, The Business Times.
SLW obtained permission to reproduce the article to give the legal community a broader view of legal reports from various news syndicates.

Dell Inc., the second-largest computer-server maker, asked a Singapore court to bar its former Asia enterprise market vice president from joining Hewlett-Packard Co. (HPQ), the industry leader.

Philip Anders Davis would be breaching agreements including not to solicit customers and employees for one year after quitting, Dell said in its lawsuit filed last month at the Singapore High Court. Davis replied in court papers that the agreement is an unlawful restraint of trade and isn’t binding.

Hewlett-Packard, which isn’t a party to the dispute, has its own strategies and isn’t interested in any confidential information of Dell’s that Davis may have, it told the court. Davis, 47, said he feared for his job security after being demoted twice at Dell. A trial is scheduled to start Oct. 14, after the case delayed Davis’s hiring from a previously announced July 7.

Dell said in an e-mailed statement today it would seek to enforce its rights. Davis said through his lawyer Pradeep Pillai that he looked forward to being vindicated by the court. Hewlett-Packard’s external spokesman Jimmy Szczepanek declined to comment.

Davis said in court filings he had been demoted for a second time in February and that Dell had “numerous and frequent organizational upheavals.”

Davis wasn’t demoted as he had claimed, according to Dell, which is headquartered in Round Rock, Texas. He was one of 70 employees worldwide to be awarded a special retention payout and his loss to a direct competitor “would severely cripple its efforts” in parts of the industry, Dell said.

Palo Alto, California-based Hewlett-Packard said it wants to employ Davis for his sales and leadership skills.

The case is Dell Global B.V. (Singapore branch) v Philip Anders Davis, S618/2014. Singapore High Court


Used with permission of Bloomberg L.P. Copyright © 2014. All rights reserved.

What's involved in writing a will: Forum

Straits Times
14 Jul 2014

IN A recent case, a lawyer was found to be at fault for an invalid will ("Lawyer's fault that will is invalid: Court"; July 4).

This is not the first time a will has been found to be invalid, and it won't be the last.

What remains unspoken is that many wills that are valid may not have been suitably constructed.

For example, it is not suitable to appoint as trustee someone who is busy working abroad, especially if the beneficiaries are minors, as such a trustee would be too busy to attend to the beneficiaries' financial needs.

There is a lack of awareness that writing a will is a two-stage process. The first stage is a planning phase best done by a competent estate planner.

This involves fact finding, analysis and recommendation, which would involve a proposal on how the estate is to be distributed and the selection of the appropriate legal instruments.

A will is one of many available legal instruments.

An estate planner is usually a financial adviser because a large part of estate planning involves money matters. However, not all financial advisers are estate planners.

The second stage is the implementation phase.

This is best done by legally trained professionals to draft the will in accordance with the estate plan.

Most people who want to write a will normally skip the first phase and go straight to the second phase, only to discover that they need to give precise instructions to their solicitors.

This is similar to constructing a building without a blueprint.

Many people have not written their wills mainly because they cannot give precise instructions as they have not gone through the planning phase.

Wilfred Ling

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Church lift accident: Two men fined for negligence

Straits Times
26 Jul 2014
Elena Chong

TWO men, one of them a parish priest, were fined yesterday for a lift accident in a church that killed a Filipino maid and seriously injured an elderly parishioner.

The two men received fines totalling $17,000 for the accident in 2012 at the Church of St Michael.

But District Judge Victor Yeo imposed the heavier fine of $12,500 on Seow Tiong Bin, 60, a designer and consultant of Access Safety Technology, while Tan Kong Eng, better known as Father Peter Tan, was fined $4,500.

Judge Yeo said he held Seow, who was in the construction industry, more accountable for the lapses in repairing the platform lift than a lay person, who may have relied on his expertise.

To make matters worse, the judge noted that neither Seow nor his company was qualified to modify the lift, which was meant for the disabled and elderly.

Access, which builds, designs and overhauls gondolas, is not a lift contractor. Still, the church's finance company, which Tan headed, engaged Access to replace the lift's motor between September 2009 and March 2010.

In the course of doing the major repair work, Seow did a negligent act of hiring an unlicensed electrician to rewire the lift and safety interlocks so that the lift could continue to be used.

On May 16, 2012, Ms Clarita Cerraon Abanes, who was working for another family, went to help Madam Rose Tay, then 82, get into the lift to attend mass on the second floor. But while they were in the lift shaft, the lift car descended on them.

The 45-year-old maid died eight days later. Madam Tay's spine was fractured and she can no longer walk without help.

The accident unveiled a string of negligent acts.

Before Access was engaged, the lift was installed by another company - Aspire Elevator Company - also not a lift contractor, Deputy Public Prosecutor Hui Choon Kuen told the court.

Tan had, among other things, installed it without approval from the relevant authority, failed to engage a lift contractor to inspect and test the lift to ensure it was fit for use, and to carry out periodic maintenance.

Judge Yeo said there appeared to be a "complete neglect in the maintenance or inspection of the lift" despite its history of not working properly.

He also said Tan and the finance committee should have been more vigilant in seeking the advice and services of qualified professionals.

In mitigation, Tan's lawyer, Senior Counsel Michael Khoo, said the parishioners had been told not to use the platform lift, but a new lift that had been operational since February 2012.

Also, the platform lift was to have been locked, but the caretaker had apparently forgotten to do it.

The family of Ms Abanes has been compensated and the church has paid for Madam Tay's medical expenses.


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Cement manufacturers seek approval for merger

Straits Times
19 Jul 2014
Mok Fei Fei

Competition commission inviting public feedback on Holcim-Lafarge proposal

TWO of the world's biggest cement manufacturers and suppliers are seeking regulatory approval for their merger to be cast in stone at the Singapore level.

Swiss company Holcim and French firm Lafarge, both with subsidiaries here, are seeking the green light for their partnership following a blockbuster deal at the parent company level.

The two European companies agreed to what has been termed "a merger of equals" in April via a US$23 billion (S$28.6 billion) all stock deal.

The Competition Commission of Singapore (CCS) said in a statement yesterday that it received a notification of the merger from the companies last Friday.

Under Singapore's Competition Act rules, companies are prohibited from merging if the combined entity results in - or may result in - a substantial lessening of competition within any market in Singapore.

Holcim's subsidiary here, Holcim (Singapore), manufactures and supplies ready-mix concrete to customers, similar to the business of Lafarge's local unit, Lafarge Cement Singapore.

Lafarge's ready-mix concrete business in Singapore is operated through Alliance Concrete Singapore, which is a joint venture between Asia Cement (Singapore), SinHengChan Concrete and Supermix Concrete, a subsidiary of Lafarge. Each party has an equal share of the joint venture.

Both Holcim and Lafarge said one area of overlap in their business activities is in the manufacture and supply of ready-mix concrete

They also overlap, to a limited extent, in the supply of grey cement in Singapore. Grey cement is commonly used to produce mortar and concrete, among other applications. But the firms argue that any merger of their operations here will not reduce the competition landscape in the cement supply industry here.

This, they say, is because of the absence of market power by the resulting entity post-merger.

They added that while Holcim supplies grey cement to third- party customers in Singapore, such supply occurs only in limited instances.

Grey cement is also imported by Holcim primarily for its internal consumption only.

However, these will be matters for the CCS to determine.

The firms added that the existence of a multitude of competitors who will be able to provide easily substitutable products to customers, as well as low barriers to entry, will ensure the industry stays competitive.

They also said they are unable to unilaterally affect prices. The CCS is inviting public feedback on the proposed merger.

More information on the public consultation is available on the CCS website at www.ccs.gov.sg under the "Public Register and Consultation" section.

Any feedback must be submitted on or before July 30.


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

Address root cause of why men default on maintenance: Forum

Straits Times
14 Jul 2014

IN THE event of a divorce, it is common for former husbands to be ordered to maintain their former wives ("Less painful divorces under new system"; July 5). However, problems arise when men default on their maintenance payment.

Courts are currently empowered to impose penalties on defaulters, including the impounding of passports and even jail time for recalcitrant offenders. With the threat of being jailed, no sane man would deliberately default on maintenance payment.

What merit further re-examination are the reasons as to why men are unable to support their former wives.

One group of men who are particularly prone to defaulting are the lower-income earners. Many a time, they face difficulties supporting themselves, let alone their former wives.

For this group of men, the court ought to be pragmatic in ordering the amount of maintenance payable. If a man earns $1,800 a month and has to fork out $1,000 for his former spouse, that would leave him with just $800.

It would be very difficult for anyone to survive on $800 a month as housing expenditure alone, be it rent or monthly loan repayment, would be substantial.

Another group of men who might face difficulties are the unemployed or retirees, who typically have no income. Current legislation does not exempt them from having to financially support their former spouses. The issue is how would someone with zero income have the financial capability to provide maintenance for his former spouse?

The third group of men who might default are those who feel aggrieved by the court's judgment.

For example, if a former wife had committed adultery, the man concerned would perhaps be very unwilling to support her since he did not err in any way but was in fact cheated on.

Another instance would be if a wife just walks out of a marriage without rhyme or reason. From the man's perspective, it makes little sense for him to continue to support his former wife since she terminated the marriage through no fault of his.

I urge the authorities to study closely the reasons as to why divorced men default on maintenance payment.

It is easy to blame the man for defaulting, but we really ought to address the root cause of the problem. Imposing penalties alone would not resolve the issue.

We should bear in mind that these are not criminal offences where we can identify a perpetrator and a victim. It could involve complex relationship issues wherein all parties end up as victims of a failed marriage.

Oo Choon Peng

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Spouse who earns more should pay alimony: Voices

26 Jul 2014

While the Women’s Charter should be tweaked, the Ministry of Social and Family Development can do more than helping “incapacitated” men. (“Maintenance could be given based on need, not gender”; July 24)

If a man earns more than his spouse, the divorce settlement is straightforward. If he earns less, his spouse can obtain alimony and the man has no legal recourse.

Even if the court decides that the woman does not require alimony, there is no provision to provide the man with alimony. Men should not have to be “incapacitated” to obtain alimony, they need only earn less.

If the law allowed it, there is no shame in claiming from an ex-wife, especially if the man is the one raising the children.

The ministry is right to take a first step towards recognising this loophole. I would recommend it go further and amend the Charter to cover such a scenario. Such an amendment would not be detrimental to anyone and there is no reason to stick to traditional ideas of gender relations.

Goh Kok Swee

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

Accused changes tune, says he played role in church affairs: City Harvest trial

Business Times
19 Jul 2014
Michelle Quah

[Singapore] ACCUSED City Harvest Church (CHC) member John Lam yesterday admitted on the stand to having been involved in every major decision of the church - a testimony in direct contrast to his lawyer's assertion earlier this week that Lam just "pops out here and there".

He was also challenged on his claim that companies such as Xtron Productions (which managed Sun Ho's singing career and the church's evangelical effort, the Crossover Project) were independent from CHC; the prosecution produced several documents pointing to CHC having called the shots for these companies.

Lam is among six CHC members charged with having "dishonestly misappropriated" some S$24 million of the church's building funds to finance Ms Ho's career, and with round-tripping another S$26.6 million, using entities such as Xtron, to cover the alleged misappropriation. The others on trial are Ms Ho's husband, senior pastor and co-founder Kong Hee, deputy senior pastor Tan Ye Peng, finance manager Sharon Tan, and former finance manager and board member Serina Wee.

Lam's lawyer, Senior Counsel Kenneth Tan, had said in his opening statement on Monday that Lam had played a much smaller role than the others in the transactions in question: "All John Lam is, is a volunteer . . . he seems to pop out here and there."

But, under cross-examination by the prosecution yesterday, Lam admitted to being involved in all major decisions of the church.

Chief prosecutor Mavis Chionh produced a transcript of an extraordinary general meeting held by CHC on July 7, 2007; at that meeting, Kong had described Lam, head of the church's investment committee, as being "very qualified" and who has "been with us in every major decision we've made from Day 1".

Ms Chionh asked Lam if it was correct to say he had been with the church in every major decision made from Day 1.

"Yes, I can agree with that," Lam replied.

She showed minutes of other meetings - one in March 2010 with the church's executive members, at which he addressed accusations made against Kong; at another meeting months later, he presented audit findings to the executive members.

"When we look at (these), the history of your involvement in the church, the key appointments you have held, the responsibilities you have held, it is clear that you are not just an ordinary member who happens to 'pop in and out' of the church," Ms Chionh said.

Lam disagreed, saying: "My statement, and as my counsel has said, regarding this case, my position has always been (that I) popped in and out . . . I'm not disagreeing that I'm qualified, that I have experience, but I am an ordinary volunteer."

He also asserted that entities such as Xtron, while aligned with CHC's objectives, were independent.

But Ms Chionh put it to him: "(On Thursday), you were the one who told us that (CHC senior pastor Kong Hee) wanted the directors of all these companies listed to be responsible for the running of their company . . . If these companies are all independent of the church, why should Mr Kong, as pastor of the church, be in a position to say that he wants the directors to be made responsible for the running of the companies?"

She produced evidence showing the church's role in the running of these companies - in particular, Xtron. The court was shown a document listing individuals whom Lam, Wee, Chew and Tan Ye Peng suggested to Kong and the CHC board as being suitable directors for the "independent" companies.

She also produced another document on the agreement between Xtron and CHC on CHC's subleasing of Singapore Expo Hall 8 from Xtron, for which Xtron did not charge the church a mark-up for renting the Expo space.

"Assuming Xtron is an independent commercial entity that deals with the church at arm's length, why is it that it would not charge any mark-up on the rental of Expo?" she asked.

Lam said he believed there was a mark-up provided for in the sub-leasing agreement. Ms Chionh then produced another document: an e-mail from Wee to senior church members which said a CHC board meeting had decided CHC would pay Xtron a mark-up, "as only then will it be deemed an arm's length transaction"; the e-mail also carried Wee's calculations on how the mark-up was to be done.

"Do you have any explanation as to why, if Xtron is an independent commercial entity, . . . is Serina (Wee), the church's finance manager, proposing in this e-mail how much mark-up Xtron should charge CHC for renting the Expo premises? It doesn't make sense for the church, if it is dealing at arm's length with Xtron, a commercial entity, to say, 'Hey, I want to pay you more rent than you are now charging me. Please, can I pay you more rent?' You would expect Xtron to be the one to propose a rental mark-up. Do you agree?"

Lam, not answering the question directly, only said that CHC was prepared to pay a mark-up because it wanted Xtron to be independent.

"Mr Lam, if you have no answer to what I've been asking for the last 10 minutes, I suggest to you then that what we see here (in the e-mail) suggests that your evidence about City Harvest and Xtron being two entities that operate independently of each other and at arm's length is not true. Do you agree or disagree?"

"I disagree," Lam said.

The hearing is adjourned until Aug 4.


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Regulation by law or the Code?: Corporate governance

Business Times
14 Jul 2014
Lyn Boxall

THE corporate scandals of the late 1990s and the global financial crisis of 2008 caused governments around the world to identify causes and undertake regulatory action to forestall a recurrence. Against this backdrop, it is interesting to take a look at the different ways the United States and the United Kingdom approach the task of regulating for better corporate governance.

The UK Code-based approach

The UK first issued its Corporate Governance Code in 1992, following the publication of the Cadbury Report. The Code sets out governance principles and guidelines of "best boardroom practices" for how they should be implemented. Corporations have the option of either complying with the Code or explaining why they have not done so.

Many countries, particularly Commonwealth countries, have adopted the UK's code-based "comply or explain" approach. Singapore did so when it introduced a Code of Corporate Governance in 2001, which became operational in 2003. It has been updated twice since, most recently in 2012.

Of course, these codes are intended to complement and supplement the mandatory and prescriptive provisions of key legislation, such as the Companies Act and the Securities and Futures Act of Singapore, and the listing rules. The codes represent a separate "pillar" of governance that captures best practices, which are higher than baseline standards.

The US SOX Act

In the US, the Sarbanes-Oxley Act of 2002 (SOX) was enacted in the aftermath of Enron and other corporate scandals of the late 1990s. It makes the internal control of a corporation a direct responsibility of the board. SOX is regarded to have resulted in considerable improvements in the standard of corporate reporting in the US.

Although SOX-related regulations use the "comply or explain" method in some isolated instances (for example, in relation to whether a company has a "code of ethics" or its audit committee has a "financial expert"), in most other instances, US regulation tends to rely on the legislation and penalties (fines and imprisonment).

It is important to note that the US does not have a single national or authoritative corporate governance code. There are historical and constitutional reasons for this, but without an overarching code, debate over governance in the US typically defaults to appeals for legislative action and black-letter regulation.

For example, the US response to the global financial crisis has included further legislation, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Which approach?

SOX and the Dodd-Frank Act are examples of a "rules-based" approach to corporate governance in the US. On the other hand, the UK Code is seen as an example of a "principle-based" approach for "best practices" in corporate governance while baseline requirements are ensconced in statutes and listing rules.

One example of how the US and UK approaches differ is in the requirement for CEO/CFO certification of annual/quarterly reports and assurances on the effectiveness of internal controls. This is hard-wired into SOX in the US while it is a best practice item in the UK Code (as is in Singapore).

Which approach is better?

Well, neither the US and UK approaches to corporate governance prevented the global financial crisis in 2008. Perhaps the fault lies with their implementation. Both approaches require, for example, good governance practices in relation to risk management and accountability to stakeholders - failures in these practices go to the heart of the cause of the global financial crisis.

Regulation by legislation makes compliance mandatory. In that sense, it is effective, and corporations face a level playing field. It may well be the better approach from a liability perspective in a highly litigious environment like the US.

However, the prescriptive approach allows no leeway and less flexibility in accommodating rapid developments in the modern market-place. In response, new rules and regulations have to be developed and implemented all the time. This means a continual assessment of the adequacy of the rules and the effectiveness of their enforcement where the letter of the law is vital to the setting of standards.

Singapore has adopted the UK's more balanced approach. Core rules are legislated and best practices are embodied in the Code which allow companies to adopt such practices that are appropriate for their circumstances. Standards of practice are encouraged to improve over time in line with community expectations.

One could say that the Singapore approach to corporate governance has worked reasonably well. Singapore topped the recent corporate governance rankings of countries in Asia by the Asian Corporate Governance Association in its report, CG Watch 2012.

There is, however, still some way to go. The risk with a "comply or explain" approach is that companies see them as non-binding and fail to comply without giving adequate explanations. This requires the regulators to be vigilant in enforcing the "comply or explain" requirements, and for companies to observe the objectives and spirit of the Code.

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

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Are current maintenance cases being addressed?: Voices

26 Jul 2014

I refer to the report “Maintenance could be given based on need, not gender” (July 24).

It is heartening that the Ministry of Social and Family Development is carrying out a series of conversations with social and civic groups that will presumably provide valuable feedback in crafting the Family Justice Bill.

I trust that this feedback gathering will be done as inclusively as possible, including the Opposition and the whole spectrum of women’s groups, and done with an open mind so that the outcome will be a fair and comprehensive Bill.

Meanwhile, I note with concern that about 3,000 applications for enforcement of maintenance orders are filed annually in the past two years.

How many of these cases have been cleared, and how many are pending?

I cannot but think of this number of families not getting the justice they deserved after the Court has handed out judgments. There should be more focus on how enforcement action can best be applied.

Improvements should be considered comprehensively and applied expeditiously for the well-being of already traumatised families.

While this initiative of putting forward the Family Justice Bill is laudable, let us address also the more pressing and outstanding issues faced by families who are not getting the maintenance support they need.

Zee Kok Eng

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

No easy fight against nuclear terrorism

Straits Times
19 Jul 2014
Andy Ho

IT HAS not been too widely noticed, but there's going to be a new capital crime in the law books. This would be when amendments to the Radiation Protection Act to criminalise acts of nuclear terrorism become law later this year.

Nuclear terrorism may involve the detonation of a stolen or purchased nuclear weapon.

Or it could refer to a "dirty bomb", in which a conventional bomb with nuclear material attached to it is detonated to disperse the radioactivity widely.

The Bill to amend the Act was passed by Parliament last week to toughen penalties for stealing nuclear material or using it to harm the public.

But why should Singapore, which has no nuclear weapons or nuclear reactors that generate nuclear waste, be concerned?

Singapore has a stake in the fight against nuclear terrorism because it is a major trans-shipment hub. About 90 per cent of world trade is transported in cargo containers, and nuclear terrorists may try to use Singapore's shipping facilities for their nefarious purposes.

Nuclear terrorism may well be the gravest threat to the security of globalised nations. So, like it or not, a globalised Singapore is involved. It already has two bilateral agreements with the United States to combat terrorism.

One is the US Container Security Initiative. Launched in 2002, this arrangement involves US customs officers stationed here working with local customs personnel to inspect containers heading for the US.

This is reciprocal, which means Singapore customs personnel can also be stationed at US ports for the same purpose.

Another 57 ports in many countries have similar bilateral arrangements with the US under the Container Security Initiative.

All containers with nuclear material are examined. Also, suspicious containers are unloaded and scanned with non-intrusive radiation detection technology. Any unapproved nuclear material found is then neutralised.

While the Container Security Initiative deals with containerised shipping at the port, the US Proliferation Security Initiative seeks to stop illegally trafficked nuclear weapons and nuclear material on the high seas.

Singapore is one of 102 countries with this bilateral agreement with the US, allowing officials to board, search, detain and seize the cargo of each other's vessels on the high seas.

The Proliferation Security Initiative is necessary because, under the United Nations Law of the Sea Convention, a vessel on the high seas is exclusively subject to the jurisdiction of its flag state only.

This means that the authorities from a coastal state may not board vessels on the high seas near it - unless suspected of piracy, slave trade or unauthorised broadcasting.

But terrorism is not included in this list of exceptions.

If more states join the Proliferation Security Initiative, more ships can be stopped and searched in international waters for nuclear material.

But out of sovereignty concerns, over half of UN members have refused to join the Proliferation Security Initiative, including India and China.

Overall, both bilateral arrangements are restricted in their effectiveness because of the number of countries participating.

Apart from dealing with vessels at port or on the high seas, border controls also matter. This is because terrorists need to not only acquire nuclear materials but also move them into place, perhaps even across borders.

They also need to assemble a group of co-conspirators with the know-how to put together a device on location. So, tracking terrorist travel matters.

The International Atomic Energy Agency, the main body that manages multilateral nuclear treaties, runs an Illicit Trafficking Database, which has information on nuclear trafficking. And Interpol maintains a database that identifies stolen passports.

Both these databases can help the authorities apprehend known terrorists at border checkpoints.

Finally, there are also multilateral treaties against nuclear terrorism. But they are generally ineffective since they come with no enforcement mechanisms.

One is the Convention for the Physical Protection of Nuclear Materials, a treaty that Singapore will ratify once the amended Radiation Protection Act is enforced.

This was the world's first major treaty to establish rules to secure nuclear material. Party-states must criminalise nuclear trafficking within their borders, on vessels that fly their flags, or if suspects are their citizens.

Party-states must also adequately protect nuclear materials being transported across borders. But party-states are not required to secure nuclear facilities and nuclear material within their own borders. The treaty was amended in 2005 to plug this gap and require all party-states to protect nuclear facilities and nuclear materials within their own territory.

Still, only 74 nations have ratified the amendment. Singapore plans to accede to the treaty as well as the 2005 amendment. But another 17 states must do so for the amendment to come into force, which will take many years.

There is also the 2005 International Convention on the Suppression of Acts of Nuclear Terrorism. This requires party-states to detain suspects and prosecute or extradite them, upon request by other party-states.

This has caused Singapore, which has signed the treaty, to not ratify it yet as it requires that a detainee be accorded "fair treatment" under undefined "applicable provisions of international law, including international law of human rights". This provision could be interpreted in ways that Singapore may disagree with.

Likewise, the US has also signed but not ratified this treaty for precisely the same reasons.

States may sign treaties to show in-principle support for them and then debate in their own legislatures what exceptions or amendments they might wish to ask for before ratification. That debate may be inconclusive, so many years may elapse between signing and ratifying.

Lastly, all UN members are subject to UN Security Council Resolution 1540 which mandates that all states adopt undefined "effective security standards" for nuclear materials and nuclear weapons.

But the resolution also comes with no enforcement mechanism.

In sum, an international legal framework of sorts is emerging to criminalise nuclear terrorism and place such acts under international jurisdiction. But the situation is very far from ideal.


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Easier, cheaper to apply for Lasting Power of Attorney

Straits Times
13 Jul 2014
Daryl Chin

Fees for basic registration form and postal submission waived for two years

From September, Singaporeans will find it easier and cheaper to appoint someone to make financial and health decisions for them if they lose mental capacity.

The $50 registration fee for the basic form for the Lasting Power of Attorney (LPA) will be waived for two years.

With this move, applicants using Form 1 need pay only for the professional fees of LPA certificate issuers, such as accredited general practitioners, psychiatrists or lawyers, which can cost at least $50.

Form 1 - used by more than 97 per cent of applicants - has also been simplified and cut from 15 pages to eight pages.

Form 2, at $200, is for those who have larger, more complicated assets and wish to grant specific authorisation to their appointees.

About one in five applications was rejected due to gaps or mistakes in the forms since the start of this year.

Applicants will also be able to submit their forms through the post rather than in person. SingPost will provide free postal service for such submissions for two years. Details of this will be released later.

These tweaks were announced by Minister for Social and Family Development Chan Chun Sing yesterday at HDB Hub in Toa Payoh.

He was at a workshop for people who have been appointed by the Mental Capacity Court to act on behalf of those who have lost their mental capacity and have no LPA.

Mr Chan hopes that more people - especially younger Singaporeans and those shouldering heavy family responsibilities - will take advantage of the simpler process and protect themselves from complications down the road.

"In an Asian society, generally people think some of these topics are quite taboo. But our message to everyone is that we never really know when we need (the LPA), and don't leave it till it is too late," he said.

The Office of the Public Guardian (OPG) said it received 6,511 successful applications since it was set up in 2010.

Based on its annual reports, most (68 per cent) were made by people aged 56 and older, while only 3 per cent were by those aged between 21 and 34.

In each of the 848 cases handled by the Mental Capacity Court during the same period, a deputy had to be appointed for the mentally incapacitated. About 40 per cent of these resulted from disorders such as dementia.

Businessman Francis Goh, 62, who attended the workshop yesterday with his wife, administrative assistant Lilian Sim, 67, wished he had urged her brother to sign up earlier.

The 64-year-old man, who was retrenched from his senior insurance executive job more than five years ago, had a heart attack three years ago while cycling.

Since then, his health has deteriorated to the point where he cannot make sound decisions.

Mr Goh said: "We were lucky that we found a lawyer to do pro bono work for us. Otherwise the legal proceedings would have cost us $25,000 or more. Nothing could have prepared us for the speed in which dementia set in."


What it should have been

The Straits Times, 21 July 2014

OUR July 13 story, "Easier, cheaper to apply for Lasting Power of Attorney" stated that Madam Lilian Sim was married to Mr Francis Goh. Madam Sim has clarified that they are not married to each other and that Mr Goh is, in fact, her brother-in-law. We are sorry for the error.

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

IFRS 9 ready now with final piece in place

Business Times
26 Jul 2014
Michelle Quah

Banks and insurers expected to be most affected by new international standard in financial instrument accounting

[Singapore] THE fourth and final piece of a financial reporting standard - six years in the making - has finally been put in place, and seeks to address the weaknesses in the current standard blamed for plunging banks into the global financial crisis.

The now-complete new standard in financial instrument accounting, IFRS 9, was issued by the global standards setter, the International Accounting Standards Board (IASB), on Thursday.

Not everyone is applauding this latest development, however. While some have cheered the fact that a complete new standard is now in place, others lament that it is not the globally converged version many had hoped for - resulting in a lack of comparability between the accounts of American-listed companies and much of the rest of the world.

Also, while the new model does take into account expected losses (rather than just incurred losses - a practice that many blamed for tripping up the banks in the 2008 financial crisis), it still does not account for unexpected losses.

First, the issue of comparability. The IASB and its US counterpart, the Financial Accounting Standards Board (FASB), had started out on a converged financial instruments standard but those efforts fell apart earlier this year. What this means is that US companies - that use FASB standards, known as generally accepted accounting principles (GAAP) - will prepare their books according to one set of rules, while the 100 or so other countries that follow IASB standards will have accounts done up to another set of rules.

Ong Pang Thye, head of audit at KPMG in Singapore, said: "Having different rules under US GAAP and IFRS will mean a lack of comparability for investors between the results of banks reporting under the different frameworks, and increased costs for those banks that have to prepare figures under both accounting frameworks."

Then there is the issue of what exactly the new standard addresses. The full suite of the new standard now includes a new impairment approach - the last piece of the puzzle - alongside previously announced hedge accounting principles.

The impairment portion includes requirements for loan loss provisioning - and moves from an "incurred loss" to a more forward-looking, "expected loss" model. It focuses more on the level of credit losses expected in the future and allows for earlier recognition of losses than was previously possible.

Nigel Sleigh-Johnson, head of the Financial Reporting Faculty of the Institute of Chartered Accountants in England and Wales (ICAEW), comments: "The new loan loss requirements will provide earlier indications of potential losses on loans made by banks and other financial institutions, and that is a major and long overdue step forward. However, those who think that provisions made in the run-up to the global financial crisis were 'too little, too late' should not see the change as a panacea. Even an expected loss model won't result in provisions being made for unexpected losses."

IFRS 9 introduces a three-stage approach to loan loss provisioning - performing, underperforming, and non-performing loans - based on an ongoing assessment of the level of credit risk.

Iain Coke, head of ICAEW's Financial Services Faculty, said: "It is important to remember that this accounting change will not change the cash flows of underlying loans. However, when combined with tougher regulatory capital requirements, it may force banks to hold more capital for the same risks. This may make banks safer but may also make them more costly to run."

Chen Voon Hoe, Accounting Advisory, Reporting and Corporate Treasury leader, PwC Singapore, adds: "In Singapore, while the local banks have fairly advanced models to meet the requirements of Basel, they will need to build or make significant adjustments to leverage on their current credit models to comply with these new accounting requirements. This is due to differences between IFRS 9 and Basel despite both being an expected loss credit model."

The new standard, taking effect in 2018, will not affect just banks; all companies holding financial assets like loans and bonds, trade debtors and lease receivables - such as insurers - will have to consider the new requirements.

Experts agree the new standard provides greater transparency on a company's risk management practices, but the increased amount of estimation needed also means more judgment will be involved.

KPMG's Mr Ong points out: "Estimating impairment is an art, rather than a science. It involves difficult judgements about whether loans will be paid as due - and, if not, how much will be recovered and when . . . Preparers will have to make new judgements, auditors will have to review them, and users of financial statements, including prudential and securities regulators, will have to understand them."


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In praise of failure: Professor Simon Chesterman

Straits Times
19 Jul 2014
Simon Chesterman

IT IS graduation season in Singapore and many other parts of the world, as enthusiastic young men and women celebrate the completion of their degrees and diplomas. As is customary, we send these students out into the world with parting words of advice and, hopefully, wisdom.

Much of this advice can seem generic, but last month a New York high school principal took that view to a new extreme. He not only borrowed text from another principal's graduation message - but he also inadvertently concluded his own message by congratulating the graduating class of the other principal's school.

Last week, I had the honour of speaking to some of our own graduates from the Faculty of Law at their ceremony. With the example of that high school principal in mind, I tried to think of something new to say. So what message did I choose to send these exceptional young men and women out into the world?

I chose failure.

Coincidentally, this was the morning after Brazil's stunning 7-1 defeat by Germany. So I imagined, on the other side of the planet, Brazil's coach giving a similar speech to his team.

A graduation ceremony, by contrast, might seem an odd time to focus on failure. The men and women graduating had, by any measure, succeeded thus far in their lives - navigating Singapore's rigorous educational system, often with time to excel also in extra-curricular activities varying from sports to the arts, from community involvement to charity work.

But the greatest liability of this group of graduates is precisely their history of success. It might seem churlish to point this out at a graduation ceremony, but the ability to do well in exams is a poor predictor for achievement in anything else.

Doing well academically certainly helps.

But to succeed in life, raw intellectual ability needs to be coupled with other life skills such as the ability to communicate effectively, to cope with change, to overcome setbacks, and to work with and mobilise a team.

A second key message that I tried to share was linked to the first: that we learn more from our failures than from our successes. As high-achieving people who have succeeded for most of their lives, these graduates might now be tempted to be conservative, to avoid risks, to stick to the safe, well-travelled path.

I urged them to resist that temptation. For as young men and women entering the workforce, now is the time when they can - and should, and almost certainly will - make mistakes. You will, I warned them, fail.

And that's okay. Because all of us fail.

For the true measure of a man or woman is not how often you succeed, but how you cope when you fail. Do you give up, walk away, think less of yourself? Or do you pause, dust yourself off, learn from what went wrong, and keep going?

Most great people are great precisely because they failed and yet kept going. Indeed, if you look at anyone who achieved greatness, you can usually find the experience of failure.

Thomas Edison's teachers, for example, told him he was "too stupid to learn anything". Oprah Winfrey was fired as a television reporter because she was considered not fit to be on TV. Walt Disney was sacked from a newspaper because he "lacked imagination and had no good ideas". Steven Spielberg was rejected - twice - by the University of California School of Cinema Arts.

J.K. Rowling was a single mother living on welfare when she wrote the first Harry Potter novel. It was rejected by 12 publishers - and only accepted by a 13th because the eight-year-old daughter of the chairman begged him to publish it.

The total number of paintings sold by Vincent Van Gogh in his lifetime? One: The Red Vineyard, for little more than $1,000 in today's currency.

We learn more from our failures than from our successes because that's when we learn what kind of person we are.

My concern for the young men and women graduating was that their success up until now might translate into a fear of failure. But unless we are prepared to fail, we will never know how much we might achieve. So I warned them that if, some years from now, they found that they were not failing at anything, if they were achieving all of their goals - then it was probably because those goals were not ambitious enough.

Now if I had not been giving a commencement address but teaching a class in the Faculty of Law, I can imagine the student feedback. "The prof didn't clearly set out the aims and objectives of the course." "He didn't say what would be on the exam." That was, of course, my point: From now on, our former students must set their own exams.

So I wished them luck. I wished them success, but I also wished them failure. And above all, I wished them happiness.


The writer is the dean of the National University of Singapore's Faculty of Law.

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Blogger suit: PM seeks judgment in his favour without trial

Straits Times
12 Jul 2014
Tham Yuen-C

PRIME Minister Lee Hsien Loong has applied to the High Court to rule in his favour in his defamation suit against blogger Roy Ngerng, without going through a trial.

The application for summary judgment was released to the media yesterday by Mr Ngerng's lawyer, Mr M. Ravi.

PM Lee's lawyer, Senior Counsel Davinder Singh, argued in the application that Mr Ngerng, 33, has "no defence" against the claim of defamation.

Mr Singh said: "The defendant has no defence to the plaintiff's claims and the only issue to be determined is damages."

He asked the court to decide how much damages Mr Lee should receive, and asked for a ban on the continued publication or dissemination of the offending blog post and "other allegation to the same effect".

In a May 15 blog post, Mr Ngerng alleged that Mr Lee had misappropriated the Central Provident Fund (CPF) savings of Singaporeans.

The blogger had compared a Channel NewsAsia chart detailing the relationship between City Harvest Church leaders, prosecuted for misusing about $50 million in church funds, to another chart he had created.

His chart set out the relationships between the CPF Board, Mr Lee, the Monetary Authority of Singapore, Temasek Holdings, GIC and other Singapore companies.

He later removed the post and apologised for it, after receiving a letter from Mr Lee's lawyer, but demurred on the issue of damages. He then offered to pay Mr Lee $5,000, which Mr Singh had said was derisory.

Mr Ngerng also followed up his first blog post with a few other posts and videos on the same topic.

Mr Ravi told the media that he would be making "submissions to vigorously resist the Prime Minister's application for summary judgment".

A summary judgment is a procedure whereby a plaintiff claims the defendant has no case and seeks judgment in his favour without a trial.

Mr Ngerng, in a defence filed in court last month, said he never intended to accuse Mr Lee of misappropriating CPF savings.

He also said the key concerns raised in his blog post, which is at the centre of the suit, were the lack of transparency with which CPF funds are managed and the question of interest on these savings, among other things.

A hearing has been scheduled for Sept 18 for the court to decide if it would grant a summary judgment.

Meanwhile, the case will proceed with a pre-trial conference next Thursday.


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Changes afoot to improve disciplinary regime of doctors: Pre-inquiry conferences now compulsory

25 Jul 2014
Neo Chai Chin

Secondment of legal officer to SMC among measures welcomed by doctors, lawyers

SINGAPORE — Laws that govern the disciplinary regime of doctors could be changed, to increase the transparency and robustness of proceedings.

The Singapore Medical Council (SMC) today (July 24) responded to wide-ranging recommendations made by a committee formed in December 2012 to improve the disciplinary process of doctors. The medical watchdog said some measures — such as the secondment of a legal service officer to the SMC — have been rolled out, and that it would work with its parent Ministry of Health to explore legislative changes.

The 11-member committee chaired by a senior doctor, Professor Raj Nambiar, was formed after the Court of Appeal dismissed charges against aesthetic doctor Low Chai Ling in September 2012, with stinging comments by the judges on the SMC’s disciplinary proceedings.

The judges had said the framing of Dr Low’s charges for practising non-evidence-based treatments “raises troubling questions as to what she was really being punished for”. She faced charges for treatments performed before guidelines on the practice of aesthetic medicine kicked in, and the judges also found the SMC unjust for singling out doctors to prosecute when others were offering similar treatments.

The committee submitted its recommendations last November, and the SMC finished studying the 142-page report last month.

The SMC said some measures to speed up the complaints workflow have been rolled out. Complaints committee meetings are now scheduled weekly where, previously, five cases were accumulated before convening such a committee. Pre-inquiry conferences are now compulsory, with parties agreeing to timelines.

Should laws governing the medical profession change, every disciplinary tribunal — which is formed when a complaint against a doctor is elevated to a quasi-criminal case — will have a lawyer appointed to make proceedings more efficient.

Committees will be in place to improve transparency at two junctures: To hear appeals when a complaints committee decides not to elevate a matter to a disciplinary tribunal, and after decisions are made by disciplinary tribunals. For the latter, a review committee will audit the outcome of every tribunal inquiry and appeal on behalf of the complainant where appropriate. The complainant may also write in to the SMC to “lobby” for an appeal.

Members of the medical fraternity welcomed the announcements. The Singapore Medical Association, which counts the majority of doctors here as members, said the changes would benefit the profession.

 “Many of the changes reflect the principles of greater transparency, natural justice, and a more efficient system to (reduce) the time required to clear individual complaint cases,” said Dr Wong Tien Hua, 1st vice-president of the SMA.

The recommendations will make the disciplinary process more “robust and defensible”, said Dr Chia Shi-lu, Member of Parliament and chairman of the Health Government Parliamentary Committee.

Lawyers said the database of cases dating from 2008 — set to be available on SMC’s website from the fourth quarter of this year — would allow them to better advise doctors involved in disciplinary proceedings.

Mr Eric Tin Keng Seng, who heads the medico-legal practice group at Donaldson and Burkinshaw, welcomed the secondment of a legal service officer to SMC, which began last December. The officer works with both complaints committees and prosecution counsel on draft Notices of Inquiry, which contain the charges. This added rigour will help “weed out unmeritorious cases”.

For cases deserving of a disciplinary tribunal’s attention, the legal service officer’s input should “improve precision in the framing of the charge”, Mr Tin added.

One recommendation the SMC said would take “a few years” to implement, is for its members not to be appointed to Complaints Committees -- a call made by many to avoid any perceived conflict of interest. The SMC said it understands the concerns, but that it would take time to train non-Council members.

Since 2013, SMC members have not been appointed to disciplinary tribunals.

Dr Chia acknowledged the challenges in getting doctors to volunteer for such work, especially in the wake of negative publicity.

The Ministry of Health yesterday welcomed recommendations by the committee and said they would enable the SMC to “more effectively uphold the high professional standards of the Singapore medical profession”, ensuring the public continues to enjoy quality care.

Inquisitorial system offers ‘advantage of seeking truth’

SINGAPORE — Can the current adversarial process when charges are levelled against a doctor shift to become more inquiry-based?

The issue has been raised by the committee tasked to strengthen the disciplinary process for doctors, which noted in its report that the current process can be time-consuming and expensive, with the potential for a “hotly contested hearing before the High Court” for appeals.

It received suggestions for an inquisitorial framework, which would give disciplinary tribunals more control over proceedings. For instance, the tribunal would be able to direct how much evidence needs to be produced, instead of simply receiving what parties choose to show.

The committee received feedback that the adversarial process tends to be legally complex and could become “a fight between lawyers as much as it is a determination of fault or lack thereof”.

The Singapore Medical Council could be guided by the inquisitorial framework that the Family Court here is shifting to, the committee said, to which the SMC agreed.

The Singapore Medical Association, which represents the majority of doctors here, welcomed the committee’s recommendation.

 “The inquisitorial system offers the advantage of seeking the truth as opposed to taking sides,” said Dr Wong Tien Hua, the association’s 1st vice-president.

But lawyer Palaniappan S, who specialises in medico-legal matters, said an adversarial system is “wholly understandable when one appreciates the competing interest of parties”. “The fact that a professional should be given all opportunity to respond charges levelled against him would definitely involve an element of zealousness in wanting to prove his innocence ... in such situations, an adversarial system would be most appropriate,” he said.

Number of complaints against doctors holds steady

The number of complaints against doctors last year held steady from the previous year, despite the rise in number of practitioners.

The Singapore Medical Council (SMC) received 172 complaints in 2013, one fewer than in 2012 — a marginal decrease in number of complaints per 1,000 doctors from 15.9 to 15.7.

The bulk of complaints was about the quality of services not being of the quality that had been expected, which was also the case in 2012.

A total of 352 cases were considered last year, the SMC stated in its 2013 annual report, released yesterday on its website. These included unresolved complaints made in previous years. Of the 352 cases, 14 were referred for disciplinary inquiries. Of the remainder, 10 doctors were issued letters of warning, 54 were issued letters of advice, one was referred for mediation, three were withdrawn, 106 were dismissed and 164 were adjourned to this year.

The number of doctors increased to 11,433 last year, a 7.2 per cent rise from 2012. In his foreword, SMC president Tan Ser Kiat noted the increase in number of Singaporeans trained abroad who returned to work here — 121 of them did so last year, about 18 per cent more than the 102 in 2012.

There were 4,124 specialists here, with statistics over the past five years showing the biggest percentage growth in renal medicine, rheumatology and geriatric medicine specialists.


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Body in suitcase: Two suspects fit to plead

Straits Times
19 Jul 2014

THE second Pakistan national accused of murdering a compatriot - whose legless body was found in a suitcase - has been found fit to plead.

Ramzan Rizwan, 25, was found fit to plead by a prison psychiatrist after a further week's remand at Complex Medical Centre in Changi.

The other accused, Rasheed Muhammad, 43, was also found fit to plead when his case came up for mention last Friday.

The pair are alleged to have caused the death of Mr Muhammad Noor, 59, at a lodging house in Rowell Road in Little India between June 10 and 11.

The victim's legless body was found in a blood-soaked suitcase at Syed Alwi Road near Jalan Besar.

His legs were recovered later from a Muslim cemetery in Jalan Kubor off Victoria Street.

Last week, Ramzan had complained about the condition of his cell, saying he could not stand it. He asked the court to send him home or to the gallows.

A pre-trial conference has been scheduled for Aug 26 in the High Court.

Ramzan and Rasheed will appear in the State Courts via video link again on Sept 9.

If convicted of murder, they will be hanged.


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Raise the bar for constitutional amendments: Voices

12 Jul 2014

Law and Foreign Affairs Minister K Shanmugam has cited the need for the Government to preserve its ability to make “necessary adjustments” to the Constitution to strengthen the revenue base and pay for extra spending.

This was offered as a justification for not putting into force Article 5(2A) of the Constitution. (“Govt to keep ability to amend Constitution without vote: Shanmugam”; July 10)

This is a curious explanation, given that Article 5(2A) calls for a national referendum for amendments relating to fundamental liberties, the office of the President and its powers, the prorogation and dissolution of Parliament, as well as the requirement that elections must be held within three months of Parliament being dissolved.

Furthermore, we should pause at the idea that Parliament should be allowed the prerogative to amend the Constitution with ease for the sake of policy expedience.

The Constitution, as the highest law of the land, is not merely an instrument of policy.

It is the embodiment of the rule of law, a foundational charter that delimits the proper bounds of state coercion and prevents the arbitrary exercise of executive power.

It establishes the framework of our statehood and citizenship, and — not least — enshrines our rights. Constitutional amendments, particularly in matters of constitutional essentials, should thus not be taken lightly.

American legal scholar Bruce Ackerman has described these amendments as a foray into “higher lawmaking”, which should be more “specially onerous” than the normal lawmaking of passing statutes.

Currently, we require a simple parliamentary majority to pass Bills and a two-third majority to amend the Constitution.

Perhaps it is time to consider bolstering the Constitution’s status and integrity as the highest law of the land by making it more difficult to amend it. Article 5(2A) is a good place to start.

Khairulanwar Zaini

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

The importance of a proper, ironclad handover: Inheritance laws

Business Times
25 Jul 2014
Bob Yap

It's not what you leave behind but how it will be managed and distributed

THE importance of good estate management is often underrated. Most people want to leave their loved ones a substantial financial legacy when they pass away but they often neglect one key aspect: how this legacy is managed and distributed when they are gone.

An estate can easily run into problems. It is not uncommon for the beneficiaries of a will to dispute how assets are distributed, especially if the estate is a large one.

Some examples in Asia are the three-year court battle over the will of billionaire Nina Wang and the 2012 dispute over the assets of late Hong Koon tycoon William Mong Man-Wai.

In the first case, Ms Wang's immediate family contested their exclusion from the will; in the second case, beneficiaries of the will contested the use to which the funds were put. The cost of the legal action was such that some media articles quipped that the lawyers were benefiting at least as much as the families.

Family tussles aside, estate management becomes even more complex if the deceased owns several properties across different jurisdictions.

Many high-profile inheritance disputes arise because family leaders delayed making a will for too long or did not make a will at all.

When someone passes away without a will, or if the will is invalid or cannot be located, the person is considered as having died intestate. His or her assets are immediately frozen until an administrator of the estate, usually the deceased person's next-of-kin, is authorised by the court. The administrator may also be a creditor of the estate.

Under the intestacy law in Singapore, many problems can emerge regarding beneficiaries. Firstly, only certain people will be able to inherit. Spouse and children take priority, meaning that most other beneficiaries, including elderly parents, are excluded from the estate if the deceased leaves a spouse and/or legitimate children behind. Step-children and illegitimate children are excluded, and non-relatives have no chance to inherit at all.

Secondly, the wrong people might gain access to the estate. A separated spouse who is not yet divorced is automatically entitled to half the estate, and an ex-spouse might be named guardian of surviving children. In a worse scenario where a beneficiary is bankrupt, the estate might be given to his or her creditor.

Finally, intestacy law does not provide for special arrangements such as holding assets in trust. Therefore, even if a beneficiary is financially imprudent or immature, the estate will be distributed to him or her as soon as the administrative formalities are complete.

Some people may prefer to name a relative or a friend as an executor to carry out the will, either because they believe that the person is trustworthy or because they feel that engaging a professional executor is too costly.

However, this is a risky move. The appointed executor may be unable to act for health reasons. For example, a spouse appointed as an executor may be too traumatised by grief to handle the burden of estate management. A spouse or child who is the citizen of another country may also be subject to that country's inheritance laws and thereby be unable to execute the will.

There might also be problems with the will itself. A non-professional executor may not be able to ensure the will's safety. The testator's decisions may even be influenced by knowing that their spouse or relative is executing the will, resulting in constraints on terms such as who can be named beneficiaries.

In the case of a sizeable or disorganised estate with assets located across several different countries, a non-professional may not have the skills or resources to handle cross-jurisdiction complexities.

Cross-jurisdiction challenges

When someone in Singapore wills a house in China or Europe to his or her spouse, or bequeaths shares in a private company established in the Cayman Islands to their grandchildren, how can we verify that these assets exist in the first place? And how can we verify that the assets actually belonged to the deceased?

Determining the existence and ownership of overseas assets can be costly and time-consuming. On top of this, the will must be authenticated in each of the countries where the deceased had assets, before ownership of those assets can be transferred to beneficiaries.

Inheritance laws also differ between countries. In Singapore, for example, there is no estate duty, but some other countries - including France, Germany and the US - still impose inheritance or estate taxes which are applicable to the assets in those countries.

For high net worth individuals, the percentage levied can be very significant, requiring estate tax planning.

Overall, the complications involved with assets located across several countries, especially with a large estate, are such that seeking a professional executor may be advisable.

An executor has many duties: he or she must be able to identify and value all assets in the estate, judge among various claims on the assets and be responsible for the paperwork - drawing up accounts and filing tax returns among other tasks - for the estate.

All these responsibilities require considerable expertise. In choosing an executor, one should look out for:

• Experience in managing assets, working with financial institutions and handling legal matters
• Familiarity with tax matters, especially when the estate includes assets in different countries
• An ability to communicate with government agencies
• Objectivity when it comes to dealing with relatives and other beneficiaries, particularly if they are likely to contest the will

The executor should also have the capacity to manage the estate, no matter the condition or location of the assets. For example, the executor should be capable of assuming directorship of any company in the estate, so as to safeguard all assets.

All in, proper estate management can make a big difference to the legacy that a person leaves his or her loved ones - it should not be left to chance.

The writer is head of advisory, KPMG in Singapore. The views expressed are his own

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Developer loses suit against couple over building of lofts

Straits Times
18 Jul 2014
Selina Lum

A CONDOMINIUM developer has lost a bid for damages of about $760,000 from a couple whom it claimed had built two unauthorised lofts in their penthouse apartment.

The High Court, in a written judgment published yesterday, found that developer Macly Assets had given written permission for the timber lofts to be built.

Justice Lee Seiu Kin threw out Macly's claim that Mr and Mrs Andrew Loke had breached the sale and purchase agreement of their flat by building the lofts without written consent.

The developer had blamed the couple for its delay in obtaining the certificate of statutory completion from the Building and Construction Authority (BCA).

This meant that a sum of $5 million, paid by the flat buyers and held in a stakeholding account, was tied up longer than it should have been when it could have been used for other purposes, Macly alleged.

Mr Loke, 42, a financial controller, and his 37-year-old teacher wife bought the 60 sq m flat at Thomson V Two in Sin Ming Road in May 2007.

After the temporary occupation permit for the project was granted in May 2012, Mr Loke applied to renovate their unit and was issued a permit by the developer.

The works included the building of two 7 sq m decks, one above the hall and the other over a bedroom.

In January last year, BCA officers visiting the unit to check other defects noticed the lofts and told Mr Loke that the structures did not comply with regulations.

In March last year, Macly's lawyers wrote to the couple saying that the issuance of the certificate was held up due to the lofts and gave them 30 days to take necessary measures.

Mr Loke met representatives from Macly and BCA but the matter could not be resolved.

Months later, in May, Macly sued the couple and sought an injunction to remove the lofts.

A series of communications followed between the couple and the Urban Redevelopment Authority and the BCA, which ordered the lofts to be demolished.

Finally, in September last year, after the couple carried out some works to the decks, BCA found that they complied with regulations and lifted the demolition order.

Macly got the certificate for the project in November. In its lawsuit, it sought losses arising from the delay in the funds being released.

Mr Loke testified that he had submitted plans to build the lofts but was told by an employee of the developer's managing agent to change the words "loft floors" to "storage area". Mr Loke said he did so and was given the renovation permit, which led him to believe that permission had been granted.

Justice Lee said in his judgment that Mr Loke's account was supported by the documents. He found that Mr Loke submitted clear plans for the lofts and in accepting them, the developer had given written consent under the agreement.


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To view the judgment, click <here>.

Legless body case: Pretrial conference set for Aug 26

12 Jul 2014
Amanda Lee

SINGAPORE — A High Court pretrial conference date has been fixed next month for the two Pakistani suspects in the high-profile legless body case.

Yesterday, Rasheed Muhammad, 43, and Ramzan Rizwan, 25 — who are charged with murder for allegedly killing Pakistani Muhammad Noor, 59 — spoke for the first time in court through a video link.

Speaking through an interpreter, a tearful Rasheed told the court that “whatever happened (was) wrong” and that it was his “wrongdoing”. He also revealed that he was married with eight children — six girls and two boys. “All my children are not working. It’s very difficult,” he said.

Rasheed, who will be brought back to the remand centre, will return to State Courts on Sep 9.

An anxious-looking Ramzan said through the interpreter that he was “not able to tolerate the conditions in (his) cell” and asked to be sent to the “gallows” or back to his country. “I actually … don’t know what’s going to happen … I don’t know the outcome of the case. All these are tormenting (me),” he said.

Ramzan will be remanded for another week at Complex Medical Centre in Changi Prison for psychiatric evaluation and will return to court next Friday.

The pretrial conference at the High Court is on Aug 26.

The duo was charged in the State Courts on June 14 for the murder of Muhammad Noor. If convicted, they will face the death penalty.

The upper body of Muhammad was found in a bloodied suitcase at Syed Alwi Road by a rag-and-bone man on June 11, sparking off a search for the rest of the body and the perpetrators. The victim’s legs, which had been cut off at the thighs, were found the next day in another suitcase at a Muslim cemetery at Jalan Kubor, a short distance from Syed Alwi Road. The duo was arrested on the same day at about 3pm along Rowell Road.

They are alleged to have committed the murder some time between June 10 and the evening of June 11 in a tourist lodge at 6B Rowell Road.

The body of Muhammad Noor was reportedly flown back to his family in Lahore on June 19.

Amanda Lee

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

'No' to bail for man who fixed matches

Straits Times
25 Jul 2014
Walter Sim

He is considered flight risk; starts jail term immediately

BUSINESSMAN Eric Ding Si Yang, who was sentenced to three years in jail yesterday for bribing football officials, began serving his prison term immediately despite intending to appeal against his conviction and sentence.

District Judge Toh Yung Cheong refused him bail as the 32-year-old Singaporean - even with his passport impounded - was considered a flight risk.

He pointed at how other football match-fixers had fled the country before. While this did not mean Ding will also go on the run, the judge said "it illustrates that match-fixers are part of a group" with the resources to help suspects abscond.

Judge Toh added that if Ding ran off, it could tarnish Singapore's image. Over the last few years, the country had been reported to be a centre of match-fixing for games around the world, including Europe. "The court is entitled to consider whether the offender absconding... will further harm Singapore's reputation," the judge said.

Ding was found guilty on July 1 of three counts of corruption for arranging prostitutes for a trio of Lebanese officials when they were in Singapore in April last year, in exchange for rigging games.

Prosecutors, who on Tuesday pushed for a prison term of between four and six years, and a fine of between $120,000 and $300,000, intend to appeal against his three-year jail sentence.

Meanwhile, defence counsel Hamidul Haq revealed that Ding also plans to contest the denial of bail, something that the prosecution robustly pushed for.

Deputy Public Prosecutor Alan Loh pointed out yesterday that Ding's roots were "not fully embedded" in Singapore as his Thai wife and daughter live in Bangkok. He added that Ding, as a match-fixer, has the "resources and network" to flee.

The court also heard yesterday that Ding's ill father had paid $230,000 and his uncle, $120,000, towards the accused's $400,000 bail. The remaining $50,000, however, came from "one Mr Lee".

Ding's father told the authorities he did not know the full name of this mystery man or have his contact number. "These circumstances show that the $50,000 is highly suspect," said DPP Loh.

Given how the rise of online betting has made match-fixing harder to detect, there is "no guarantee" that Ding has not already re-offended over the course of the trial, he added.

Defence counsel Hamidul Haq described the prosecution's allegations as being "in the realm of speculation".

He argued that Ding's offences were "of no different category in terms of seriousness and gravity" to other corruption cases, like the sex-for-grades case against former law don Tey Tsun Hang and and the sex-for-contracts case against former civil defence chief Peter Lim Sin Pang. Both were granted bail pending appeals.

Mr Tey was later acquitted.

In sentencing Ding to three years in jail yesterday, the judge said his crimes were "premeditated and no doubt swayed by potential profits coupled with the difficulty in detecting such (match-fixing) offences" due to the use of the Internet.

But while agreeing that Ding was part of "an organised group", the judge, citing a lack of evidence, rejected the prosecution's contention that he was part of an international match-fixing syndicate masterminded by Dan Tan Seet Eng, who is under detention here. That was "one of the reasons why my sentence is below the sentencing range suggested by the prosecution", the judge said.

As to why he did not impose any fine, he explained: "No match was actually fixed and there was no evidence that the accused had benefited financially as a result of the offences."

Ding's lawyer Thong Chee Kun told reporters after the hearing: "He looks forward to clearing his name at the High Court."


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Blogger suit: Hearing on summary judgment plea in Sept

Straits Times
18 Jul 2014
Nur Asyiqin Mohamad Salleh

THE hearing to decide if Prime Minister Lee Hsien Loong should be granted summary judgment in his defamation suit against blogger Roy Ngerng has been set for Sept 18 before a High Court judge.

It is to decide if Mr Lee should be awarded damages without the need for a full-blown trial.

The full-day hearing will be presided over by a High Court judge, rather than a registrar as is normally the case, Mr Ngerng's lawyer M. Ravi told reporters after yesterday's pre-trial conference. This, said Mr Ravi, is because "both halves have indicated they will appeal" if the court rules against them.

Mr Ngerng, 33, is being sued for a May 15 blog post alleging that PM Lee "criminally misappropriated" Central Provident Fund (CPF) savings.

A timeline was also laid out during the pre-trial conference. Mr Ngerng's affidavit in reply to the request for summary judgment must be filed by Aug 1. If Mr Lee has a reply, he must submit it by Aug 22. Both sides then file and exchange their arguments on Sept 4, and then on Sept 11, exchange their replies.

Mr Lee applied to the High Court for summary judgment last Thursday.

Yesterday, Mr Ngerng posted on his blog the 28-page affidavit Mr Lee had submitted then to support his application for summary judgment.

"The Defendant has defamed me and I have been advised by my solicitors and verily believe that there is no defence to my claim," wrote Mr Lee.

The only issue that remains, he said, is damages.

In response to media queries, Mr Lee's press secretary Chang Li Lin said yesterday that Mr Ngerng had admitted to falsely defaming the Prime Minister. As the legal process has commenced, the courts will decide on the matter, she said.

Mr Ravi had last week told the media that he would be making "submissions to vigorously resist (Mr Lee's) application for summary judgment".

The Singapore Mediation Centre has, as a standard procedure, sent a letter to both parties inviting them to resolve the matter amicably.

Mr Ravi said yesterday: "I don't think either of us is interested."

Mr Ngerng, who was waiting outside the chambers in the Supreme Court yesterday, said: "I will continue writing about CPF in the meantime, and (Mr Ravi and I) will fight against summary judgment, to have a full-blown trial."

He is now working part-time at his father's carrot cake stall in Ang Mo Kio. Last month, he was fired from his job as patient coordinator at Tan Tock Seng Hospital.


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Court dismisses appeal of former Chinese official who received stolen funds

11 Jul 2014
Ashley Chia

SINGAPORE — A former Chinese local government official residing in Singapore had his appeal against his conviction — for dishonestly receiving stolen funds from the Chinese government — dismissed yesterday and will have to serve his 15-month jail term.

A restraining order was also made on Li Huabo’s assets comprising cash and real estate. The 52-year-old, a permanent resident here, is also not allowed to handle the money in the seized accounts where the stolen funds are said to be placed. The Attorney-General’s Chambers said the order was served on July 4 and had come from China.

Li was accused of embezzling about 94 million yuan (S$18.8 million) and arranging for these monies to be transferred to him in Singapore, through various intermediaries, into a local bank account.

One of Li’s statements to the Commercial Affairs Department in 2011 when he was caught showed he had been embezzling the funds from the Poyang County Finance Bureau in Jiangxi province in China, where he served as a section director, since December 2006.

Li later denied this and insisted that the monies in the bank account were from legitimate sources, but was unable to provide evidence to prove his claim. He also claimed that he had been framed by his co-workers.

He was found guilty of all three charges of receiving the stolen funds and sentenced to 15 months’ jail in April last year.

In April this year, Li filed a criminal motion seeking to admit further evidence. At the same time, the prosecution also sought to admit six statements from various parties and a clarification from the Poyang County People’s Procuratorate. Both applications were dismissed by Justice Choo Han Teck.

In his grounds of decision, Justice Choo said he did not find any injustice in convicting and sentencing Li because he satisfied the elements of the offence he was charged under — that he must have dishonestly received or retained the property, that he had knowledge or reason to believe the property was stolen and that it must be stolen property.

Copyright 2014 MediaCorp Pte Ltd | All Rights Reserved

Proposal to tweak gender bias in Women's Charter

Straits Times
24 Jul 2014
Janice Tai & Priscilla Goy

Maintenance could be awarded based on need and not just gender

MEN who are incapacitated may soon be able to claim maintenance from the wives they are divorcing.

The idea of awarding maintenance based on need and not only gender is one of the proposed amendments to the Women's Charter that may be tabled in Parliament after public consultation ends early next year.

Minister for Social and Family Development Chan Chun Sing revealed this yesterday after he joined a women's group dialogue at the Singapore Council of Women's Organisations (SCWO).

The possible changes to the Women's Charter are based on recommendations released recently by the Family Justice Review Committee, which is reviewing the family justice system, and consultations with people.

They could also include greater support for wives whose former spouses default on maintenance payments.

For much of the last two decades, social activists and lawyers have pushed for the 1961 Women's Charter, which was designed to protect women's and children's rights, to be updated.

Currently, only women can claim alimony from their former spouses, regardless of their financial status.

Many people have argued that the times have changed, with more women able to work and support themselves. Some earn as much as, if not more, than their former spouses.

The debate to make maintenance laws gender-neutral resurfaced recently when High Court Judge Choo Han Teck rejected a woman's demand of $120,000 in maintenance from her former husband. She earned more than him, over $200,000 a year, and owned more than twice the assets he did.

The new provision should apply only if the men are incapacitated in some way, such as having severe disability, said Mr Chan.

Women who have not been getting money from former husbands, who have defaulted on payments, may get more help with housing and employment.

Family lawyer Malathi Das, first vice-president of the SCWO, said such support is necessary because some wives do not want to use the law to penalise their former spouses in case it has a negative effect on their children.

She said: "The stick is there but do you wield the stick? You have to bear in mind that whatever behaviour or options you choose will have an impact on the child."

The last time the Charter was amended was in 2011. New sanctions were introduced, beyond fines and imprisonment. These included financial counselling, community service and attachment of earnings orders, which make the person's employer pay the maintenance money from his monthly wage.

Yet, many divorcees still have to apply repeatedly for enforcement orders each time a former spouse fails to pay up.

From 2008 to 2011, about half of those granted enforcement orders had to apply for at least another order within two years.

Over the past two years, the Family Court has received 3,000 applications a year for enforcement of maintenance orders. About 60 per cent came from low-income families.

Mr Chan played down suggestions that the Charter should be renamed the "Family Charter" or "Marriage Charter" to reflect its modernisation.

He said: "The Women's Charter was started because it enshrines our posture towards the protection of women. Many of the things there remain as valid as when it was first conceived."

Centre for Fathering chief executive Peter Quek said it is "the right time" for the Charter to be updated, adding: "There are expectations of fathers to take on equal household responsibilities so they should be accorded the same rights."



Background Story


The Women's Charter was started because it enshrines our posture towards the protection of women. Many of the things there remain as valid as when it was first conceived.

- Minister for Social and Family Development Chan Chun Sing

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Chew again grills Lam on 'false' evidence: City Harvest trial

Business Times
18 Jul 2014
Michelle Quah

He challenges Lam's assertions about key investment decisions

[SINGAPORE] Former fellow City Harvest Church (CHC) mates locked horns in court yet again yesterday, as former CHC board member and church-goer Chew Eng Han continued his cross-examination of current CHC board member and church-goer John Lam.

Chew again sought to cast doubt on Lam's testimony - including that of Chew having played a key role in CHC's major investments - by suggesting that evidence tendered by Lam was "totally false" on a number of occasions.

Chew and Lam are among the six accused of having "dishonestly misappropriated" some $24 million of CHC's Building Fund to finance Sun Ho's music career and then "round-tripping" another $26.6 million to cover the alleged misappropriation. The others on trial are Ms Ho's husband, senior pastor and co-founder Kong Hee, deputy senior pastor Tan Ye Peng, finance manager Sharon Tan and former finance manager and board member Serina Wee.

Chew, in a break from the others, quit the church in June last year; he also discharged his lawyer, Senior Counsel Michael Khoo, and is now defending himself.

In continuing his cross-examination of Lam, who is on the stand this week, Chew challenged Lam's assertions that Chew had directed several key investments made by the church - including a $21.5 million investment into bonds issued by Xtron Productions, which managed Ms Ho's career and the church's evangelical effort, the Crossover Project.

Chew pointed out that Lam had testified in court earlier this week that it was Chew who suggested to Lam that CHC take up the Xtron bonds, and that it was AMAC - the investment vehicle run by Chew that managed the church's investments - that made the ultimate investment decision.

"In your testimony, you said . . . I showed you (the Xtron bonds) were a good investment because they were principal-protected and the album sales (of Ms Ho's music albums) were expected to be good, and your testimony now (is that) you left it to my discretion to decide on whether to buy Xtron bonds or not. Is that correct?" Chew asked.

"Yes, correct," said Lam.

Chew then called up a statement made by Lam to the Commercial Affairs Department (CAD) on June 16, 2010, when Lam was interviewed by an investigation officer (IO) of the CAD. In that statement, Lam said the board of City Harvest "was involved in the evaluation of the investment"; as for the "performance appraisal for the investments, it would be just a direct meeting with the main board (of CHC) where the fund manager will present to the board for appraisal".

Chew said: "Mr Lam, I'm submitting to you that your CAD statement is totally inconsistent with the testimony that you have given in court over the past few days.

"Your testimony that it was left to AMAC to decide on purchase of Xtron bonds is totally false," Chew added.

Lam said he disagreed with Chew; he said that, at the time he was questioned by the IO, he had no access to emails or other documentation on these investments and was not totally sure of the facts, nor could he recall exactly what CHC's arrangement had been. "I had no documents before me, I was basing (my statement) purely on recollection of my memory at that time."

"So, your state of mind has changed since then?" Chew asked.

"Because now I've a chance to look at the documents and the emails and I understood what really happened," Lam replied.

The hearing continues with the prosecution's cross-examination of Lam today.


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Bankrupt jailed for filing false statements

Straits Times
11 Jul 2014
Selina Lum

FOR four years, a bankrupt filed false statements to the Official Assignee (OA), declaring that he was spending $1,200 a month on his mother's medical expenses.

It was only after the OA asked Tan Beng Chua, 55, for documentary proof in 2010 that he came clean - his mother had in fact died in 2006.

Tan's four-week jail term for making false statements to the OA was upheld in May by the High Court, which turned down his appeal for a lighter sentence.

Judicial Commissioner See Kee Oon, in his written grounds published this week on why he dismissed Tan's appeal, said Tan's conduct showed a lack of a genuine desire to cooperate fully with the OA. The OA is a public servant who manages a bankrupt's assets and distributes them to his creditors.

Tan, an operations supervisor in an oil refinery company, was made bankrupt in January 2004.

As a bankrupt, he was legally obliged to submit periodic accounts of his income and expenses to the OA. Income not spent on necessary expenses for himself and his family was required to be handed over to the OA.

Tan said in his mitigation plea to the district court that his accounts had been submitted by a third party.

After he was declared bankrupt, he received fliers in his mailbox offering services to file income and expenditure statements on his behalf. He said he hired one "Eddie" from Guardian Consultants to file his statements electronically using his SingPass.

Tan said he did not receive copies of his statements from Eddie. When his mother died in January 2006, Tan claimed he had told Eddie about her death. Between May 2006 and February 2010, Tan - through Eddie - submitted 14 income and expenditure statements to the OA, falsely declaring that he spent $1,200 a month on her medical expenses.

He pleaded guilty last year to four charges of making false statements to the OA. Another 10 charges were taken into consideration.


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Xpress shares take hit over legal tangle

Straits Times
24 Jul 2014
Grace Leong

Printing firm discloses it is fighting creditors over alleged unpaid debts

SHARES in mainboard-listed Xpress Holdings plunged nearly 10 per cent yesterday after the company announced it was embroiled in legal proceedings with creditors.

Xpress shares shed 0.2 cent to 1.9 cents after the printing company told the Singapore Exchange (SGX) that it and its unit, Xpress Print, are fighting creditors over a total of $4 million in alleged unpaid debt, and facing two winding-up applications.

In one case, several creditors have sued Xpress and its unit over $2.4 million owed, while in another case, a bank has filed a winding-up application against Xpress Print over $1.2 million in alleged loans owed.

Xpress said it is in discussion with the bank to restructure repayment terms.

When contacted, the company declined to provide further details on the legal proceedings. Business will continue as usual, it said.

One other creditor has filed a winding-up application against Xpress over $400,000 in alleged unpaid rental arrears. The company said in the SGX statement that there are "good arguments" that the creditor has "no standing to bring such an application".

Xpress, represented by lawyer Steven Lim, also applied for an injunction to fend off the creditor's winding up application.

A hearing is scheduled next Tuesday to determine if the court will approve Xpress' application, Mr K. K. Fong, founder and chief executive, told The Straits Times yesterday.

The company said it has appointed Stone Forest Corporate Advisory as financial consultant to help broker a settlement with the creditors.

Meanwhile, Xpress has entered into subscription agreements on Tuesday to place a total of 480 million new shares to raise funds to augment its cashflow and working capital.

It said two subscribers, Strong Core Global and Ma Jing, have agreed to subscribe for 240 million new shares each in the capital of the company at an issue price of 2.1 cents per placement share.

The placement, after deducting estimated expenses of about $600,000, will raise net proceeds of $9.48 million.

About 55 per cent of proceeds will be used to repay the company's creditors and the rest for general working capital purposes.

Xpress said it will pay an arrangement fee of $504,000 to Teranova Group, which introduced the subscribers to the company.

The placement shares represent about 19.6 per cent of the existing issued and paid-up share capital of the company as of Tuesday, and represent about 16.39 per cent of the enlarged share capital after the placement is completed.


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Bailor ordered to pay $10k for friend who jumped bail

Straits Times
18 Jul 2014
Elena Chong

A WOMAN who put up a $10,000 bond for a friend facing sex offence charges was ordered to pay the entire amount yesterday after he disappeared.

Freelance TV producer Lau Wei Yin, in her 30s, was a close friend of Gerard Fang Tian Huat, 42, who had claimed trial to 13 charges.

The businessman and former dance instructor allegedly had sex with three underage girls and committed indecent acts with a fourth.

The alleged offences occurred at various places, including Amara Hotel, over a year-long period from 2009 to 2010.

The trial commenced last December and continued in a few tranches until April.

The defence had closed its case when Fang successfully applied on April 4 to travel to New York for business, to pick up furniture and other items.

He was supposed to return on April 16 but failed to do so.

A warrant for his arrest was issued by trial judge Hamidah Ibrahim on April 23.

At yesterday's show cause action, Ms Lau's lawyer, Mr Alain Johns - who also defended Fang - said in mitigation that Ms Lau had made numerous efforts to locate Fang.

He said $10,000 was not a "small sum" for Ms Lau - who was a co-executive producer for Asia's Next Top Model - and submitted that only half of that should be forfeited.

Deputy Public Prosecutor Christine Liu argued that the duty of a bailor was an onerous one - all the more so given the number of charges and the serious nature of Fang's offences.

She said most of Ms Lau's efforts were made after Fang disappeared.

She was not even present when Fang applied to leave the jurisdiction as she had given a "blanket" approval for him to travel.

"(It was) only when the accused failed to return on April 16 (that) she panicked and started to ask around," said Ms Liu.

"The 15 days of trial spent is currently without a conclusion."

A police gazette has been issued to arrest Fang, who was last known to be in the United States.

District Judge Hamidah told Ms Lau that she was not even a family member but just a friend who chose to stand bail for the accused.

"You must accept the fact that if he chooses to abscond, the entire amount will be forfeited. I do not see any reason for any remission."


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Goodbye, illegal downloads?

Straits Times
11 Jul 2014
Irene Tham

Websites offering pirated music or movies could be blocked as soon as end-October

INTERNET users in Singapore who download pirated digital content like music or movies may soon lose access to sites like The Pirate Bay and KickassTorrents.

Such websites could be blocked in as early as three months, after a law was beefed up this week to protect intellectual property.

The amended Copyright Act, which is expected to come into force at the end of next month, allows content owners like cable TV networks to seek High Court orders to get Internet service providers (ISPs) to block websites that "clearly and flagrantly infringe" copyright.

Lawyers said if website owners do not contest the applications, the courts could take just two months to order the likes of SingTel and StarHub to block the objectionable sites. The ISPs are required to comply immediately.

The opening salvo could come from the International Federation of the Phonographic Industry, which represents more than 1,000 producers and distributors of sound recordings.

Its regional director for Asia, Mr Ang Kwee Tiang, said: "Given that the legal and economic interests of our members have been adversely affected for the longest time, we do intend to commence the application as soon as the law and the accompanying implementing rules are brought into force."

He would not disclose the targeted websites but said they will be limited to those engaging in "blatant infringement activities".

The Straits Times understands that industry groups are also preparing court applications on behalf of motion picture firms and cable TV networks.

No timeline has been given.

Before the revised law, content owners can request only that ISPs block pirated content. They can sue the providers for copyright infringement if they do not comply. But this could mean months of litigation, so no content rights holders have tried it.

Some ISPs wonder about the implementation of the new law. For one thing, it is not known if the courts would specify the blocking mechanism by domain names such as piratebay.se, or Internet protocol (IP) addresses, which are numerical labels that determine a website's location.

Blocking domain names is seen by some providers to be less of an administrative hassle compared with blocking IP addresses.

This is because piracy websites may be hosted at several locations, and as such, have several IP addresses. Some piracy websites also constantly change these addresses or locations as new mirror sites pop up.

"Domain name blocking requires less network resources and has a less likely chance of over blocking," said chief executive officer Malcolm Rodrigues of broadband service provider MyRepublic. "Over blocking" occurs when legitimate websites using the same IP addresses as piracy sites are also blocked.

SuperInternet managing director Benjamin Tan agreed. "Some websites constantly change their IP addresses. Must ISPs monitor them hourly or monthly?" he wondered, adding that it would be "extremely onerous" to do so.

Lawyers said ISPs are unlikely to recover the cost of blocking piracy websites under the new law.

Meanwhile, StarHub and M1 have said they will comply with "any valid court order". While supporting the fight against piracy, SingTel said it will also ensure that access to legitimate sites is not affected and "there is no degradation in service quality".

Some people remain unfazed by the tougher action against digital piracy. Said an engineer, 38, who wants to be known only as Mr Low: "Torrent sites that let users share files easily always move their locations: they can be in Europe this month and another location the next. Mirror sites always appear to host the torrent files. An ISP cannot block and keep track of these changes."


Background Story


Given that the legal and economic interests of our members have been adversely affected for the longest time, we do intend to commence the application as soon as the law and the accompanying implementing rules are brought into force.

- International Federation of the Phonographic Industry's Ang Kwee Tiang


Torrent sites that let users share files easily always move their locations: they can be in Europe this month and in another location the next. Mirror sites always appear to host the torrent files. An ISP cannot block and keep track of these changes.

- Mr Low, a 38-year-old engineer

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The creeping invasion of Big Data

Straits Times
24 Jul 2014
Andy Ho

FACEBOOK isn't just a platform for catching up on what your friends are doing. It is also a research set-up where every user, unbeknown to him or her, may potentially be a test subject.

A Facebook worker recently published a study in a top journal, Proceedings Of The National Academy Of Sciences (PNAS). His co-authors are two Cornell dons. The study was an experiment to alter the mood of Facebook users, which upset some people as no one was explicitly asked for their consent.

The fear was that vulnerable populations such as the depressed or the young (kids aged 13 and above can have Facebook accounts) may have been included.

The experiment on 689,003 users was conducted for a week in January 2012. Facebook tweaked its news feeds to highlight happy posts and stories (for one group) versus unhappy ones (for another group).

It found that feeding users happy posts inspired them to post happy ones themselves. Conversely, feeding them unhappy posts led them to make unhappy ones themselves. So user moods were contagious online, Facebook concluded.

As this was human experimentation done without consent, Cornell's ethics panel should not have approved it, some argue.

They ask: What if the group fed with unhappy posts included users with major depressive illness, who might have been contemplating suicide that week?

Apparently, Cornell's ethics panel exempted the study from its oversight as Facebook had collected the data before its professors got on board. But the paper itself says the Cornell dons were involved in designing the experiment, which must have come before any data collection.

While Facebook's private sector research is not subject to any ethics panel oversight, the PNAS journal's editorial policy itself requires informed consent for any human experimentation study that it publishes. It also inexcusably exempted Facebook.

Facebook argues it had subject consent as users must click "agree" on its 9,405-word terms of service page when signing up for an account. Still, most people don't read the fine print when clicking on "agree" to use almost any online service. So that claim may well be ethically untenable.

Perhaps it was not even legal since, at the material time, the word "research" was not included in one of the purposes for which clicking "agree" permits Facebook to use one's data. The term "research" was only added four months afterwards, as Forbes.com research showed.

At any rate, informed consent always includes the right to withdraw from a study. But no Facebook subject could have withdrawn since no one knew they were being studied. The way to opt out of a study is always to be explained on the consent form too, which Facebook's terms of service page does not do.

Moreover, in November 2011, the US Federal Trade Commission (FTC) had just slapped Facebook on the wrist for its "unfair and deceptive" practices with regard to user data. Facebook had agreed to abide by detailed practices which the industry regulator imposed, so Facebook would have been sensitised to possible ethical issues with its experiment at that time.

The reactions to the Facebook study fall into four groups. First are the nonchalant who ask "What's the big deal?" They just don't care.

The second group thinks that Facebook did nothing wrong at all. After all, it manipulates what it feeds its users all the time anyway. This practice is called "interface A/B testing", which online firms routinely do. This involves sending half of users to one version of a page, and the other half to another to see which one gets more users in terms of what they click on, respond to or share with others.

This group argues that if the A/B test is acceptable in market research, it should be equally accepted in scientific research.

Every A/B test is a psychological experiment as it tries to create positive or surprising effects in the user to make him or her more likely to buy this or that product or service. But the Facebook test was aimed instead at also eliciting an adverse effect on one group of users, to change not their consumer behaviour but their daily mood.

With over 1.3 billion users of every emotional disposition, there are bound to be some with major depression.

If the Facebook experiment did tip just one patient over into suicide, the study would have been unethical, if not criminal.

The third group involves those who are upset because they fear that giant corporations like Facebook and Twitter are invading user privacy. Indeed, an advocacy group called Electronic Privacy Information Centre has asked the FTC to investigate Facebook for this.

Regulators may also take this view: Senator Mark Werner (Virginia) is pushing for the same. The Information Commissioner's Office in Britain and the Office of Data Protection in Ireland are already studying if Facebook broke their data protection laws.

Facebook argues that none of the user data it collected could be linked back to any specific account, so no privacy rights were breached.

The fourth group, comprising social scientists and medical researchers, is concerned about the lack of informed consent and potential harm. This is because, in their training, they were socialised into the horrors of unchecked human experimentation and the need to be ever looking out for the well-being of the research subject.

This is why universities and other publicly funded research set-ups have ethics panels to review all proposed research to winnow out projects that may lead to the abuse of human subjects.

But Facebook is not subject to such oversight. Previously, in the offline world, only academicians in research institutions - or industry researchers who came out of academe - could carry out psychological experiments on users. And they factored in subject welfare.

But now the huge digital networks which giant firms like Facebook run enable their employees who are not acculturated into academic research norms to carry out online psychological experiments on users without informed consent.

These academic research norms and rules that are meant to protect research subjects represent very costly lessons learned from the horrific human experimentation the Nazis carried out on Jews during World War II.

But in its own research, Big Data is ignoring these rules. Now that this has become known, society needs to debate and decide what rules it wants Big Data to play by in its psychological research into and manipulation of user mood and behaviour.


Background Story

But now the huge digital networks which giant firms like Facebook run enable their employees who are not acculturated into academic research norms to carry out online psychological experiments on users without informed consent.

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Former 'super principal' charged with giving false info over affair

Straits Times
18 Jul 2014
Elena Chong

A FORMER school principal who allegedly lied to an Education Ministry official, and an anti-graft investigator about his affair with a vendor, was yesterday charged in court with giving false information.

Steven Koh Yong Chiah, who used to helm top schools such as River Valley High School and Chinese High School, had allegedly committed the two offences more than seven years apart, according to court papers.

The 59-year-old is accused of giving false information, while he was principal of Jurong Junior College, to Education Ministry cluster superintendent Chia Ban Tin on Nov 24, 2005. At the time, Mrs Chia was looking into an anonymous complaint accusing Koh of having an affair with Madam Loke Wai Lin, 54, a vendor of the JC.

Koh apparently denied the affair then but later admitted during a graft probe by the Corrupt Practices Investigation Bureau (CPIB) in 2012 to having "sexual contact" with Madam Loke.

The father of two, however, allegedly lied in his statement to the CPIB officer on Dec 18 that year, saying that his "first sexual contact" with Madam Loke had taken place in 2006, in his Hyundai Trajet "likely in the vicinity of Tamah (sic) Merah Ferry Terminal".

Madam Loke is the director of Education Architects 21, a service provider of Jurong Junior College when Koh was heading the school.

Koh, who was the principal of River Valley High School at the time of the second offence in 2012, has denied both the charges.

Defence counsel Derek Kang yesterday asked for a pre-trial conference to write to the Attorney-General's Chambers and take instructions from his client. The case has been fixed for a pre-trial conference on Aug 26. Koh's bail of $10,000 has been extended and his passport impounded.

Koh was principal of Jurong Junior College from 2003 until 2009, when he became principal of River Valley High School.

Dubbed one of the "super principals" when appointed cluster superintendent in 1999, Koh was, at one point in his career with the education service, overseeing 11 schools in the south zone.

The Nantah graduate began his teaching career at Catholic High School in 1981 and rose through the ranks to become principal of Kranji Secondary School.

He made the news in 1999 when he was appointed head of Hwa Chong Institution, then known as Chinese High.

When the CPIB investigations started in 2012, he was redeployed to the Ministry of Education to assist in curriculum development.

A ministry spokesman said last night that Koh has been suspended.

If convicted of giving a false statement to a public servant, Koh could be jailed for up to six months and/or fined up to $1,000. For knowingly giving false information to the CPIB, the maximum penalty is a $10,000 fine and one year's jail.


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Making haze crimes pay

11 Jul 2014
Chua Chin Wei & Cheong Poh Kwan

The newly-proposed fine for haze crimes is a crystal-clear sign of the Government’s determination to stop slash-and-burn tactics used by the agroforestry resource sector in land clearing. Announced in Parliament on Monday after a month-long public consultation, the toughened Transboundary Haze Pollution Bill penalises companies up to S$2 million if they subject residents in Singapore to choking haze through their commercial activities. This is an almost seven-fold jump from the earlier proposed fine of S$300,000.

However, it is unclear if the stiffer fine would be an effective deterrent. The maximum penalty of S$2 million — to be imposed on companies guilty of causing haze for a continuous period of 20 days or more — may seem punitive, but it is, in fact, a paltry sum to agroforestry firms, which make hundreds of millions, if not billions, in profits every year. If we take the net profit of seven key agroforestry companies last year, a back-of-the-envelope calculation shows that S$2 million represents less than 1 per cent of their average earnings.

Still, even if the fine is not sufficiently high to hurt the bottom lines of bigger players, a conviction should be a strong-enough damper as companies would not want to put their reputations at risk. Any conviction in a Singapore court will affect their financial standing and threaten their access to bank loans and government tax incentive programmes.

What else can Singapore do to strengthen the legislation and prevent a recurrence of the choking haze last year?


First, while the amended Bill makes it possible for individuals to file civil suits against errant firms, most members of the public are unlikely to be able to afford a legal fight. It would be good if an additional provision can be introduced to allow third-party groups, such as a public hospital or non-governmental organisation, to act on their behalf.

Overlapping land concessions in Indonesia are another nagging problem. In Indonesia, which is home to around 70 per cent of the peatlands in South-east Asia, it is not uncommon for the central government, state government agencies or even community leaders to issue permits for the same plot of land to different parties. Worse, such information is not always consolidated and updated at the national level.

While the amended Bill has cast the judicial net wider to make sure all parties involved can be hauled to court, the Government should explore whether to make it explicit that overlapping concessions cannot be accepted as a defence. If such a provision is included in the revised Bill, it would strengthen the deterrence against slash-and-burn or, at least, nudge companies operating on the ground to start working on fire management plans collectively.

Also, Singapore’s collection of fines should not be seen as self-serving. If the court-imposed fines can be partially channelled to the ASEAN Transboundary Haze Pollution Control Fund to help finance haze-fighting efforts in neighbouring countries, it will help boost regional leaders’ receptivity towards the Bill, since their citizens living closest to the hot spots are most likely to benefit from the fund.


Lastly, it is also imperative to secure the cooperation of all Association of South-east Asian Nations governments to operationalise the haze monitoring system (HMS). The system can then host information on hot spot locations and concession maps, so such data can be used as evidence in court.

Leaders from Indonesia, Malaysia and Singapore, in principle, endorsed the HMS last year, when all three countries experienced one of the worst episodes of haze in recent years, but concession maps have yet to be submitted. Without credible evidence on exactly who owns the land where the fires occurred, legal action specified in Singapore’s Transboundary Haze Pollution Bill cannot be taken further.

It is a pity that Indonesia’s outgoing President Susilo Bambang Yudhoyono would probably be unable to see through the implementation of the HMS during the remaining months of his term. With the imminent swearing-in of a new administration, it is important for Singapore to start engaging the next batch of leaders and officials.

Although environmental concerns did not feature prominently in the just-concluded Indonesian presidential election, candidate Joko Widodo — a forestry graduate — had made clear his resolve to tackle overlapping land permits in his team’s manifesto. Mr Prabowo Subianto, who had lived in Singapore when his economist father was forced into exile, also had frequent contact with leaders here during his days in the military.

Not a bad start, it seems, for our leaders and officials to register Singapore’s concerns on Indonesia’s agenda.


Chua Chin Wei is deputy director and fellow for the environment and resources and Cheong Poh Kwan is a policy research analyst at the Singapore Institute of International Affairs.

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Study shows worsening fraud at S'pore companies

Business Times
24 Jul 2014
Michelle Quah

58% of frauds committed by staff; according to KPMG-SMU survey

[SINGAPORE] The incidence of fraud has grown at Singapore companies in recent years, with internal fraud - often the result of inadequate internal controls - being the most prevalent type.

These were the key findings gleaned from a survey conducted jointly by KPMG and the Singapore Management University in the last quarter of 2013. They surveyed 103 Singapore-listed companies from a range of industries, with about 75 per cent having annual revenues exceeding S$50 million.

Almost a third (29 per cent) of respondents in the KPMG-SMU Singapore Fraud Survey 2014 report out yesterday said that at least one fraud incident had occurred in their company in the past two years, up from 22 per cent when the survey was last published in 2011.

Notably, the survey found that the bulk of fraud was still being perpetrated by insiders - with the proportion of fraud carried out by employees rising to 58 per cent, from 47 per cent in 2011.

There was no change in the percentage of fraud incidents carried out by management, such as board members and senior management (17 per cent).

Overall, internal fraud constituted 75 per cent of fraud in 2014, up from 64 per cent in 2011. The report noted that fraud committed by internal parties was identified as a top concern in the 2011 edition.

Fraud perpetrated by external parties dropped to 25 per cent from 36 per cent.

Bob Yap, head of Advisory at KPMG in Singapore said: "The increase in internal fraud since 2011 suggests that while many companies in Singapore already have anti-fraud controls in place, these controls are often inadequate."

More than half (53 per cent) of respondents said fraud occurred due to weak or overridden internal controls, despite most having fraud risk management measures in place. Collusion was another significant concern - almost half the respondents said collusion between employees and third parties (30 per cent) or collusion among employees (17 per cent) enabled fraud to occur.

"With 58 per cent of fraud being committed by employees, it is important to address this risk by setting a strong tone from the top - an organisation's board of directors plays a critical role in the oversight of programmes to mitigate the risk of fraud and misconduct. The board, together with its management, is responsible for setting a moral tone and ensuring institutional support for ethical and responsible business practices at the highest levels of the organisation, " Mr Yap added.

While more than half (58 per cent) of the respondents said their company management monitors fraud risk indicators to pre-empt fraudulent activity, the survey report said much more can be done to manage fraud risk and proactively boost the effectiveness of existing controls. There is also room to improve how anti-fraud measures are reviewed and adjusted. Only 78 per cent of respondents said their company reviews the effectiveness of its control measures regularly, and just 74 per cent do so after each fraud incident.

"The best time to plan is before a fraud occurs, not afterwards," Mr Yap pointed out.

More than half of fraud incidents were first detected by employees or customers, which suggests the importance of a people-focused approach to fraud risk management. The survey also found that one in 10 respondents said that fraud incidents were first detected by data analytics or other investigative procedures.

In light of this finding, Mr Yap said: "As the power and prevalence of data analytics increase, it is likely that the use of technological solutions to identify fraud will continue to grow."

Expectedly, companies are also increasingly concerned about cyber crime, especially when it comes to employee behaviour. Almost two-thirds (64 per cent) were very concerned about employees misusing sensitive information; more than half were very concerned about falsification and manipulation of company records, master data and/or electronic audit trails; and 50 per cent were very concerned about employees stealing company assets using technology such as e-banking, indicating theft by electronic means is a growing worry (up from 30 per cent in 2011).

Currently, only one in five respondents were completely satisfied with their organisation's e-crime defences.

Mr Yap commented: "E-crime is an emerging area of concern and tackling it is proving challenging in the absence of in-depth understanding of how e-crime occurs and how it can be prevented.

Understanding the trends in external threats and using this insight to formulate policy and strategy is critical to long-term incident prevention.

"Knowledge and awareness among end users is similarly critical. Returns from investing in IT security tools are best provided by staff who understand their responsibilities for keeping their networks safe."


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

Ex-board member: I gave inaccurate evidence - City Harvest trial

Business Times
17 Jul 2014
Michelle Quah

[SINGAPORE] In what was perhaps one of the more highly anticipated moments of this long-running trial, former City Harvest Church (CHC) member Chew Eng Han - representing himself for the first time since the resumption of the hearing - grilled his former fellow church-goer and board member John Lam, who was on the stand.

Among other things, Chew - who has no legal training - had Lam admit that he had given inaccurate evidence at an earlier stage of the trial.

The pair are among the six accused of having "dishonestly misappropriated" some $24 million of CHC's Building Fund to finance Sun Ho's music career and then "round-tripping" another $26.6 million to cover the alleged misappropriation. The others on trial are Ms Ho's husband, senior pastor and co-founder Kong Hee, deputy senior pastor Tan Ye Peng, finance manager Sharon Tan and former finance manager and board member Serina Wee.

Chew, in a clear break from the others, quit the church in June last year; he also discharged his lawyer, Senior Counsel Michael Khoo, and is now defending himself.

When his turn came to cross-examine Lam, he challenged the latter's assertion that it was Chew who came to Lam with the idea of setting up Xtron Productions to manage CHC's evangelical effort, the Crossover Project. Through his line of questioning, Chew accused Lam of submitting false evidence:

"Mr Lam, I'm putting it to you right now: I didn't approach you, I didn't have this grand vision of a media events company. I had a full-time job - State Street Bank at the time. I was not into entertainment, nor into concerts; I wouldn't even have had the time to think about it.

"So I put it to you that the evidence you have given to the court - that it was my idea - is false."

Lam maintained that he had testified that Chew was the originator of the idea because it was Chew who approached him in May 2003 about having Xtron act as the artiste manager for Ms Ho. Chew argued that, since this hearing began, Lam has had sight of e-mails that showed that Chew was not the originator of the idea; the correspondence showed that others - included Kong and Tan Ye Peng - were discussing the idea before Chew came into the picture.

Chew said to Lam: "These two e-mails (exhibits), E-653, E-281, weren't they already in your hands since the trial started? So, you would have read them before you gave your statement."

Lam replied: "My statement was that, at the time, in May 2003, I had no knowledge that someone else was asking (Chew) Eng Han to tell me to set up Xtron . . . because it was Eng Han who approached me about being a director in Xtron."

To which, Chew said: "Mr Lam, I'm not asking for your recollection of May 2003. I'm asking for your recollection since the trial started - you would have access to these two e-mails, and you would have gone through them. And (I'm) asking - (having) read through those e-mails, how could you come up with the statement that it was Chew Eng Han who started Xtron?"

At which point, Chief District Judge See Kee Oon stepped in: "Mr Chew, you are basically saying that Mr Lam has given evidence which is at least inaccurate. So, do you agree with this, Mr Lam?"

At this point, Lam conceded, replying: "Your Honour, yes, I agree."

Senior Counsel N Sreenivasan, who is representing Sharon Tan, pointed out Chew's lack of legal credentials, but this has been a shortfall to which Chew has not been adverse to admitting.

When he opened his cross-examination of Lam, he had quipped: "I would just like to make a bit of a request: when the counsel in front, when you hand out new exhibits, don't forget there's a little junior counsel here. I need some of the documents too."

At another point, following an argument between the prosecution and defence counsel over a point of law, Chew said: "I don't understand what all these counsel are saying."


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Well-run credit co-ops get more leeway in investments

Straits Times
11 Jul 2014
Mok Fei Fei

Registry tweaks rule to allow for higher restricted investment limit

MANY credit co-operatives have increased transparency and governance practices as they seek to increase the level of investments they are allowed to make.

The new approach involves holding annual general meetings and informing members about the co-op's investment plans and portfolio performances.

This increased focus on transparency is one of the criteria co-ops need to meet if they hope to get permission from members to invest more assets in relatively riskier financial instruments.

The revised prudential requirement was instigated by the Registry of Cooperative Societies after co-ops complained that rules imposed in 2010 after the 2008 collapse of investment bank Lehman Brothers were too restrictive.

One rule stipulated that no more than 10 per cent of assets could be in what are termed restricted investments. Co-ops were given until June 2015 to comply. The rule was aimed at better safeguarding members' deposits by reducing a co-op's exposure to risky investments but many told the registry it was making it difficult to generate sufficient returns for members through their loan business alone.

The registry, which regulates co-ops, tweaked the rule last November to allow approved credit co-ops to raise their limit on restricted investments from 10 per cent to 20 per cent or 30 per cent, though the default cap is still 10 per cent.

Credit co-ops hoping to attain that higher limit have to satisfy several conditions to ensure greater transparency and better governance, including seeking members' approval at a general meeting for the higher restricted investment limit and the investment plan as well as having a positive net equity.

Such co-ops must also provide more disclosure to members on their investment performance in their annual reports as well as at an annual general meeting.

A credit co-op will also need the registrar's approval for investing the top end of 30 per cent limit.

Certain high-risk investments such as structured products, derivatives and foreign currencies are still off-limits.

A spokesman for the registry said: "The revised rules allow credit co-ops more flexibility while maintaining a reasonable level of prudence in investing members' funds.

"They will also encourage higher accountability and transparency as credit co-ops will need to seek members' approval and provide more disclosures on their restricted investments to their members."

Credit co-ops encourage thrift by accepting deposits from their members and assisting them with loans on reasonable terms.

They can issue dividends, which are surplus revenues returned to members and proportionate to their ownership shares.

A spokesman for the Singapore National Co-operative Federation (SNCF), the industry body, said it helped to lobby for the higher limits so credit co-ops can have more flexibility in their investments.

"The credit co-operatives are generally glad that their appeal finally gained fruition after more than a year and are appreciative to SNCF for helping them in their appeal process," he said.

Mr Yeo Chun Fing, the vice- chairman of the Amalgamated Union of Public Employees Multi- purpose Co-operative, said the tighter guidelines in the past had had an impact on its earnings.

"From 2010 when the written directions were issued to 2013, our income from investments other than fixed deposits dropped by 33 per cent," he added.

"Also, a large part of our funds had to be kept in fixed deposits at around 1 per cent interest when we could certainly do more."

Ms Chow Fong Leng, who heads The Straits Times Press Co-operative Thrift and Loan Society, noted that co-ops could invest 100 per cent of their assets in the past.

This enabled her co-op to pay out interest of 10 per cent and dividends of up to 6.5 per cent in a bumper year like 2004.

"Thirty per cent is still not ideal, but we can still survive, although we cannot pay high interest and dividends.

"I've already briefed the members that, going forward, we can only afford to give out about 2 per cent dividend unless the market outperforms and we make money from the limited investments," she added.


Background Story

Credit co-ops hoping to attain that higher limit have to satisfy several conditions to ensure greater transparency and better governance, including seeking members' approval at a general meeting for the higher restricted investment limit and the investment plan as well as having a positive net equity.

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A battle to find common ground: Accounting standards

Business Times
24 Jul 2014
Francis Kan

The search for a unified set of accounting standards appears to have stalled, but there is cause for optimism

WHILE global efforts to combine two key accounting standards into a uniform set of rules have made headway in the past decade, the momentum has slowed considerably in recent years as the two sides fail to find common ground on a few contentious issues.

The industry is keen to see the two dominant standards - the International Financial Reporting Standards (IFRS) and the US Generally-Accepted Accounting Principles (US GAAP) - converge, so stakeholders like banks and investors can more effectively compare financial information across different jurisdictions.

Supporters of the move believe that the same economic transaction should be accounted for in the same way, regardless of where it might have occurred.

These efforts took on greater urgency following the great financial crisis. Then, the leaders of the G-20 countries had called for global regulatory cooperation and collaboration, including the adoption of global accounting standards. However, as the crisis has receded and economies are regaining their footing, the momentum has slowed considerably.

Ong Pang Thye, the head of audit at KPMG in Singapore, said: "While there have been ongoing efforts to converge, the two standard setters still face challenges finding common ground in areas such as leases, impairment and insurance contracts projects."

The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) are working on global accounting issues through a platform known as the Accounting Standards Advisory Forum. Progress has been made in various accounting issues such as non-controlling interests, consolidated financial statements, disclosure in interests of other entities and fair-value measurement.

But Mr Ong noted that the IASB has realigned its focus to the needs of IFRS adopters until further consensus can be reached with the FASB on remaining convergence issues - which he said was an endeavour which could take years to achieve.

Agree to disagree

To date, there are two remaining convergence projects: accounting for leases and financial instruments. This is down from three, with the two boards deciding to drop insurance contracts from the convergence path.

However, both parties are finding it difficult to converge lessee accounting model and impairment of financial instruments. Last December, FASB announced its decision to move forward and continue refining its own proposed impairment model.

While the two standard setters have reached an agreement that most leases need to be put on the balance sheet, they cannot fully agree on how the lease expenses should be recognised and presented in the income statement of the lessees, said Lim Ai Leen, the executive director of the Technical Knowledge Centre and Quality Assurance at the Institute of Singapore Chartered Accountants (ISCA).

Meanwhile, the idea of impairment of financial instruments by both boards is very different, and convergence would require a change of viewpoint, which proves difficult, she added.

"The boards appreciate that they have come to a standstill on these differences. Hence, they have agreed to disagree for the time being," she said.

IFRS extends its lead

However, there is cause for optimism. The adoption of IFRS by many countries means that it has become the de facto global accounting standard and a universal business language.

Currently, 105 jurisdictions require the use of IFRS for all or most companies, while 14 more permit the use of IFRS in their jurisdiction, noted IASB chairman Hans Hoogervorst at the IFRS Conference Singapore in May.

"The countries where IFRS is used already cover more than half of the world's GDP, and many more have plans to adopt IFRS in the coming years," he said at the IFRS Conference Singapore in May.

In Singapore, the Accounting Standards Council announced in May that Singapore-incorporated companies listed on the Singapore Exchange will adopt a new financial reporting framework identical to the IFRS (SG-IFRS) from 2018.

This growing adoption of IFRS around the world will continue to exert pressure on the US and other non-IFRS countries to either adopt this standard or move their national standards closer to it.

"With so many major economies hopping on the IFRS train, I do not think that FASB can or will ignore international convergence in its future standard-setting activities," said Ms Lim. Indeed, the (SEC) Securities and Exchange Commission in the US already permits non-US companies trading in US markets to report using IFRS, she added.

Indeed, Mr Ong believes that this ability for filers of IFRS statements to access US capital markets without the need to prepare US GAAP financial statements means that the call for convergence is no longer as urgent as it once was.

Déjà vu?

However, there are others who believe that the failure to develop a unified set of accounting standards could prove detrimental again in times of crisis. The International Federation of Accountants (IFAC) recently issued a statement calling for the G-20 to renew its focus on regulatory convergence, noting that too many countries appear to be reverting to national policy-making agendas.

In a recent article on the IFAC website titled D�j� Vu All Over Again, the former global chairman and chief executive of EY, James S Turley wrote: "Putting global convergence on the back burner practically guarantees that the global community won't be ready when the next crisis hits."

Despite the apparent lack of progress, some are still optimistic that the two standards setting can eventually overcome the obstacles in their way.

Ms Lim said: "The two boards have come a long way and therefore, it is not likely that they will abandon the notion of full convergence of their standards."

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Thumbs-up all round for tougher MAS regulations

Straits Times
17 Jul 2014
Mok Fei Fei

Those involved say rules against money laundering, terror funding are crucial

BANKS and political figures support the tough rules being proposed to combat money laundering and terrorism financing, despite being the two groups most likely to be affected.

They told The Straits Times that tighter regulations will help uphold Singapore's reputation as a major financial hub.

The rules, outlined in a Monetary Authority of Singapore (MAS) consultation paper released on Tuesday, propose that financial institutions perform enhanced checks on customers. These include taking a risk-based approach for certain categories of what are termed "politically exposed persons".

This refers to people entrusted with prominent public functions, such as government ministers, senior public servants and top party officials.

Other proposals involve financial institutions formalising the need to screen customers and their connected parties.

The proposals, which are generally being carried out by financial institutions already, are to boost Singapore's status as a clean and safe money harbour. They are based on international best practices and the latest recommendations of the global standard-setter, the Financial Action Task Force (FATF).

Singapore Management University associate law professor Eugene Tan noted that money laundering and terrorism funding practices are becoming more sophisticated and evolve rapidly.

"It is imperative that we do not play catch-up in combating these scourges and that our law enforcement agencies are on top of the game," said Prof Tan. "I see the proposed enhanced measures as building upon the existing know-your-customer regime that we have here. They should not be seen as 'nice to have' but instead treated as 'must-haves'."

Compliance costs for banks are expected to rise but the lenders are taking it all in their stride.

Ms Loretta Yuen, OCBC's head of legal and regulatory compliance, said the bank already has in place a number of the proposed risk assessment practices.

"Over the years, the costs that banks worldwide have to incur to comply with more and increasingly complex anti-money laundering and counter-financing of terrorism regulations have risen," Ms Yuen noted.

"But having in place a rigorous regime is critical in combating the increasingly sophisticated methods used... to conceal the source and use of funds."

A DBS spokesman added: "We take the issue of financial-system integrity seriously, and have robust policies and procedures in place to ensure customers use our facilities only for legitimate purposes."

A UOB spokesman also said the bank has measures to manage the risks of money laundering and terrorist financing.

Non-compliance by financial institutions could be costly. An MAS spokesman said an errant institution can be fined up to $1 million and, in the case of a continuing offence, given a further fine of $100,000 for every day during which the offence continues after conviction.

SMU's Prof Tan, who is also a Nominated MP, is not too concerned about the enhanced checks that could be conducted on political figures like himself.

"It comes with the turf. The key concern is for the checks to be done in a sensitive and efficient manner," he said.

Sembawang GRC MP Ong Teng Koon noted that even though the enhanced checks could lead to an intrusion of privacy, they aim to strike a balance between protecting individual rights and upholding Singapore's financial hub status.

"Security and privacy concerns are not mutually exclusive concepts," he added.

Another proposed rule is that financial institutions must impose additional requirements for cross-border wire transfers exceeding $1,500, down from $2,000 previously. The MAS said this is due to the strengthening of the Singapore dollar, relative to international benchmarks set by the FATF of either US$1,000 (S$1,242) or €1,000.


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Appeal court rules postnuptial agreement binding

10 Jul 2014
Jordan Skadiang

SINGAPORE — The Court of Appeal has ruled that a postnuptial agreement formed under the proper circumstances can carry “significant weight” in determining how matrimonial property is to be divided.

It overturned a High Court ruling in a case involving the division of about S$7.4 million in matrimonial assets, where the judge had decided to split the assets in question equally, having determined that the Settlement Agreement in question was only one of the factors the court needed to take into account in deciding what division was “just and equitable”.

The judge had ruled that the proposed division in the agreement was not so and carried out his own division exercise.

The case dates back to 2011, when Mr Surindar Singh and his former wife Sita Jaswant Kaur reached a Settlement Agreement after mediation. Later that year, however, Ms Kaur changed her mind about being bound by the agreement. Mr Singh then applied for the agreement to be recorded as an order of court. When the matter came before the High Court last year, the judge declined to give the agreement — which would leave Mr Singh with 68 per cent of the assets and Ms Kaur with 32 per cent — “conclusive weight” and awarded an equal share of the assets to each party. Mr Singh then appealed against this decision.

Upholding his appeal, the Court of Appeal, in its grounds of decision published on Monday, said it found the terms of the Settlement Agreement to be binding and should be given conclusive weight.

It also noted that separation agreements “generally carry significant weight”. “The parties to a marriage are in the best position to determine what is a just and equitable division of the matrimonial assets based on their own assessment of each party’s direct and indirect contributions to the marriage and their knowledge of the extent and value of the assets,” said Justice Judith Prakash, delivering the judgment of the court.

She added: “Due to the inherent limitations of fact-finding in the litigation process, the court should not lightly depart from such a separation agreement.”

While the final decision on attributing weight to such an agreement ultimately depends on the precise circumstances of the case, the court also found that where it is “reached after a well-considered process” such as mediation, significant weight will be attached to its terms.

The court also emphasised the importance of the fact that the Settlement Agreement in question resulted from a mediation process.

Marriages, Justice Prakash said, do not end until all outstanding matters are settled and the parties are “free to walk away and rebuild their lives”, but this cannot happen as long as they are disputing the division of assets, a process that often “breeds contention and bitterness”.

Mediation can facilitate solutions, without parties having to resort to determination by the courts, which would resuscitate old complaints and acrimonious feelings, added Justice Prakash. The process also takes time and can be costly.

Justice Prakash added that if the mediation process is properly followed and an agreement results, the court will “attach significant weight to the agreement” unless there are strong grounds for doing otherwise.


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Singapore Law Watch
24 Jul 2014

Lack of quorum: Clerk of Parliament replies: Forum

Straits Times
17 Jul 2014

I REFER to Mr Leong Kok Seng's letter ("Questions over lack of quorum"; Monday).

If Parliament sits without a quorum, it may be adjourned if an MP objects. It will also not be able to pass a Bill.

Subject to these, Parliament can continue to transact other businesses that do not require a decision, such as Question Time.

The sitting on July 7 was attended by 91 MPs and attendances are recorded in the Official Reports and Votes and Proceedings available on the Parliament website.

When the votes on the Bills that were passed on July 7 were taken at the sitting, the quorum was met.

MPs have to seek the Speaker's permission in writing to be absent from a sitting.

They also have to inform the party Whip if they are unable to attend Parliament on time or have to leave early.

Ng Sheau Jiuan (Ms)

Clerk of Parliament

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Tax tweaks in next 5 years can't be ruled out: Shanmugam

Business Times
10 Jul 2014
Lee U-Wen

THE government cannot rule out, over the next five years at least, further refinements to Singapore's tax system and to the basis on which the country draws on net investment returns for current spending.

Law Minister K Shanmugam told Parliament yesterday as he noted how Singapore, given its ageing society, would need to spend more on infrastructure and social services, especially healthcare.

Nearly a million Singaporeans will reach the retirement age within the next 20 years, and healthcare spending alone is likely to triple to about $12 billion by 2020, up from $4 billion in 2011.

"To pay for this increased spending, we will need to strengthen our revenue base," he said.

Therefore, the government cannot rule out the possibility of changing the tax system and the laws that permit it to draw on net investment returns.

"We cannot decide today precisely how this should be done," he said. "We must, therefore, preserve our ability to make necessary adjustments in due course, so that we can maintain Singapore's strong financial position, and our fair and progressive system of taxes and transfers."

Mr Shanmugam made these points in response to a question from Nominated MP Eugene Tan on why the government had yet to bring Article 5(2A) of the Constitution into force, given that the constitutional amendment was passed back in 1991. This article states that Parliament must first seek a national referendum and obtain the support of at least two-thirds of voters if it wants to amend certain parts of the Constitution.

In his reply, Mr Shanmugam noted that the 1991 constitutional amendments that created the institution of the Elected President were unique arrangements. "Given the complex and novel nature of the changes, it was not possible to anticipate all the possible consequences and operational details. The provisions have been amended, revised, fine-tuned along the way, as we gain practical experience working the safeguards.

"The experience of the amendments show that adjustments, modifications and refinements must be put in place, be fully ironed out, before the scheme can safely be entrenched.

"To bring Article 5(2A) into force before that would otherwise potentially trigger a national referendum each time we needed to make a further refinement or adjustment.

"Our view is that we should give ourselves more time, before entrenching the provisions."

He noted that the Constitution was amended in 2008 to introduce a new Net Investment Returns framework, to improve the basis on which the government could use the returns from investing reserves for budgetary spending. Currently, Net Investment Returns Contribution is about 2 per cent of GDP, or $8 billion a year. The government intends to operate these revised spending rules for some years and consider entrenching them after that if no additional major changes are needed.


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Contractor, supplier jointly at fault in crane accident

23 Jul 2014
Neo Chai Chin

Supplier lubricated rope once every 660 hours of operation, not the required every 200 hours

SINGAPORE — The fault for a tower crane’s wire rope snapping, sending a 500kg load crashing onto a container site office in a 2009 accident that killed one and severely injured another, lies equally with the crane supplier and the contractor operating it that day, a High Court has ruled.

Buildmart Industries, which leased out the tower crane for the Sui Generis condominium project at Balmoral Crescent, had failed to properly install, as well as maintain, the wire rope, said Justice Tay Yong Kwang.

But the project’s main contractor, Chiu Teng Enterprises, which employed staff to operate the crane, was negligent in the lifting operation, the judge added.

The two firms are being sued by the two men who held a meeting in the container site office that day — quality control manager Lum Hon Ying, who was badly injured, and the administrator of the estate of structural engineer Lim Boon Tiong, who died.

In his judgment that was made public yesterday, Justice Tay said Chiu Teng and Buildmart owed a duty of care to the two men, who were lawfully at the work site on Sept 29, 2009.

Buildmart had contended that it should not bear any liability, arguing that the wire rope that snapped that day was brand new, and that the cause of the rope’s failure was a mystery.

But the judge ruled that Buildmart’s failure to properly maintain the wire rope of the tower crane could not be disputed, falling “dismally short” of the recommendations made in the manufacturer’s operating manual.

Instead of lubricating the rope at least once every 200 hours of operation, Buildmart had lubricated it only thrice for about 2,000 hours of operation, or about once every 660 hours of operation.

A report commissioned by the Ministry of Manpower before it brought criminal proceedings against the company had included lack of lubrication as a contributing factor to the wire rope’s failure. It also concluded that the wire rope was not properly seized and this was one of the reasons it failed.

Buildmart was fined S$8,000 in the criminal case for breaching workplace safety and health regulations by failing to ensure its wire rope was properly maintained.

As for Chiu Teng, Justice Tay said it was negligent in the lifting operation.

It was the duty of its crane operator to ensure a suspended load was not moved over anyone in the worksite and its lifting supervisor failed to ensure that nobody was inside the site office before beginning the lifting operation.

 “All the circumstances showed that the operation that morning was a highly hazardous one and much more care and thought ought to have gone into it,” the judge wrote, ordering Chiu Teng and Buildmart to each bear half the liability.

The damages to be paid by the two companies will be assessed by a High Court Registrar.


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To view the judgment, click <here>.

Man fined S$12,000 for not paying maid’s salary

17 Jul 2014

He also did not maintain proper salary payment record and defaulted on monthly levy payments

SINGAPORE — A 51-year-old employer has been fined S$12,000 for failing to pay salaries amounting to nearly S$7,500 to his foreign domestic worker (FDW). Razalee Rasdi, a Singaporean, was also convicted of illegal employment for continuing to employ his maid after her work permit was revoked for levy defaults, the Ministry of Manpower (MOM) said yesterday.

The court also found that he did not maintain a proper salary payment record to document salaries paid to his maid, it added.

Razalee faced a total of 23 charges, of which six were for non-payment of salary, one for failure to maintain a proper salary record, and another for illegal employment were proceeded on. The rest were taken into consideration in the sentencing.

He was fined a total of S$21,000 for all charges and barred from hiring foreign domestic workers.

His Indonesian maid, Ms Umi Kholifah, had lodged a complaint with the MOM in June last year. Investigations revealed that Razalee had failed to pay her in full for her employment from February 2010 to May last year, with the arrears amounting to S$7,450.40.

Razalee also defaulted on his monthly FDW levy payments, which led to the revocation of his maid’s work permit on Feb 1, 2012. However, he continued to employ her to perform household chores at his residence until May last year.

Ms Kholifah is now placed with a new employer, the MOM said. Razalee paid the salary arrears in full to her after the case was brought before the State Courts.

In the first half of this year, three employers were convicted of not paying salaries to their FDWs, the MOM said. In 2013 and 2012, five and 12 employers were convicted of the same offence, respectively, and were fined up to S$7,000.

The ministry reiterated that FDW employers must ensure prompt payment of salaries to their workers at least once a month. Employers who fail to do so may be fined up to S$10,000, or jailed up to 12 months, or both. Those who employ foreigners without valid work passes can be fined from S$5,000 up to S$30,000, or imprisoned up to 12 months, or both.

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Other instances when banks move customers' funds without notice: Forum

Straits Times
10 Jul 2014

BANKS must generally comply with the customer's mandate and authorisation regarding funds in an account.

However, as stated in the letters ("Iras can appoint banks to recover overdue taxes" by the Inland Revenue Authority of Singapore and "Banks legally obligated to make deductions in certain cases" by The Association of Banks in Singapore; both published on Tuesday), the Iras can appoint banks as its agents to collect overdue taxes from account holders.

There are other situations where a bank can move funds from a customer's account without notifying him.

When a customer opens an account with a bank, among the documents he executes is consent for the bank to consolidate and combine accounts, and set off a credit balance in one account against a debit in another account.

So, if the customer has some funds in a savings account but is in default with his credit card account, the bank has the right to transfer the funds in the savings account to offset the amount owing in the credit card account.

Indeed, many defaulting customers have had the unpleasant surprise of having salaries banked in their accounts taken by their banks without any notification to them.

Another situation is where a creditor has issued a garnishee order against a bank for funds in a debtor's account. The bank is legally obliged to hold the funds of the debtor and to pay the funds so seized to the creditor.

Kuo How Nam


Credit Counselling Singapore

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Inventor sues HDB over clothes rack design

Straits Times
23 Jul 2014
Selina Lum

A LOCAL inventor has sued the Housing Board, claiming it has infringed his patent for an external clothes drying rack.

But HDB has denied the allegations of Mr Yiap Hang Boon, saying that it had developed its own racks through an internal review in 2000, even before he filed his first patent.

The Housing Board also contends that Mr Yiap, 54, who has alleged patent infringement since 2001 but filed his suit only last year, is barred from bringing the lawsuit as he has passed the statutory time limit.

HDB has counter-sued to revoke Mr Yiap's patent.

Yesterday, the first day of a three-day trial into the suit, Mr Yiap admitted that the concept of the rack - a stainless steel frame with parallel poles supported by two arms - existed before he filed his patent.

But he said his rack was different from previous designs because his was a "structural system" that was "able to accommodate human force".

HDB, represented by Mr Darrell Low, called for a public tender in late 2000 to install external clothes drying racks for some flats in Toa Payoh that were being upgraded.

At the same time, a project team started reviewing the clothes drying system to address safety concerns over bamboo poles falling owing to strong winds on higher floors, said HDB in court papers.

On the other hand, Mr Yiap filed his first patent for a design of a clothes drying rack in January 2001. The next month, he wrote to HDB, proposing that his invention be used in upgrading programmes for its flats. In July 2001, HDB rejected his proposal after finding that his design was unsuitable.

The following month, an internal circular was issued, informing HDB officers of the new drying system that arose from the in-house review. In February 2003, Mr Yiap filed a further patent application.

After he was granted the patent in August 2004, he continued writing to HDB and other authorities to press his case for the use of his design and to allege patent infringement.


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Questions raised on purpose of gay sex law

Straits Times
16 Jul 2014
Selina Lum

Court distributes historical papers to seek views of parties debating law

THE possibility that the law which criminalises sex between men may have been enacted in 1938 to stamp out male prostitution - rather than prosecute the private acts of consenting adults - was raised yesterday in an ongoing court challenge against the provision.

This came after copies of historical documents, the oldest of which dates back to 1901, were circulated by the Court of Appeal to the parties debating the constitutionality of Section 377A of the Penal Code.

However, no conclusion was drawn by the court on whether this was indeed the purpose of the colonial government when it passed the section into law.

The three-judge court reserved judgment on the constitutionality of the provision and will deliver its decision at a later date.

Gay couple Gary Lim, 46, and Kenneth Chee, 38, as well as 51-year-old Tan Eng Hong, are urging the court to strike down or modify the provision, which they argue is discriminatory and a violation of their constitutional rights.

On Monday, the court - comprising Judge of Appeal Andrew Phang, Justice Belinda Ang and Justice Woo Bih Li - distributed the documents to parties and asked for their views.

The five sets of records include correspondence to the Colonial Office on the legal amendments and on prostitution in Singapore and annual reports on the organisation, administration and state of crime in the Straits Settlements.

Yesterday, the respective lawyers for the couple and Mr Tan argued the documents indicated the law may well have been enacted to suppress male prostitution.

Section 377A - which makes it a crime for men, in private or public, to commit acts of gross indecency with other men - was introduced in 1938 by then Attorney-General C.G. Howell.

Mr Howell told the Legislative Council - the lawmakers at the time - that such acts had unfortunately been brought to notice and the law should be strengthened.

Mr Howell said this was because as the law stood, such acts could only be dealt with under the Minor Offences Ordinance and only if committed in public. The ordinance, the appeal court heard on Monday, dealt with acts of "importuning", which means to offer one's services as a prostitute. Also produced was a 1937 annual report, which stated a "widespread existence of male prostitution".

The lawyers argued that these, taken as a whole, indicated that Section 377A was meant to combat male prostitution.

Senior Counsel Deborah Barker, representing the couple, said this inference was in line with the fact that the first reported offence under the section involved a captain prosecuted in 1941 for acts with a young male prostitute at his home.

Mr M. Ravi, representing Mr Tan, argued that Section 377A was never intended to criminalise private, consensual conduct between adult men.

However, Senior Counsel Aedit Abdullah, from the Attorney-General Chambers, strongly cautioned against coming to any conclusion as the documents in question may not give the full picture.

He argued that the law was enacted to combat more than just male prostitution.

Several times in yesterday's hearing, Justice Phang noted that the court cannot express subjective views or act as a mini-legislature to change law.

"We cannot step into the shoes of Parliament. We can only do something if it is within the legal sphere," he said at one point.


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KL has reassured Singapore over reclamation concerns: MFA

Straits Times
10 Jul 2014
Charissa Yong

MALAYSIA has assured Singapore that no reclamation is taking place for its two controversial projects near the Johor Strait, said Senior Minister of State for Foreign Affairs Masagos Zulkifli yesterday.

It remains committed to fulfilling its obligations under international law and will take all necessary measures to avoid any adverse transboundary impact, he said in Parliament.

"Singapore is very concerned about the potential transboundary impact on Singapore from reclamation projects in Malaysia that are in close proximity to Singapore," he said in response to questions from Dr Lim Wee Kiak (Nee Soon GRC) and Mr Ang Wei Neng (Jurong GRC).

The Republic has conveyed its concern on a number of occasions to Malaysia, asking for more information on these reclamation and construction works, he added.

Prime Minister Lee Hsien Loong spoke and wrote to Malaysian Prime Minister Najib Razak on the matter in May.

National Development Minister Khaw Boon Wan, who co-chairs the Malaysia-Singapore Joint Ministerial Committee for Iskandar Malaysia, also wrote to his Malaysian counterpart the same month.

The issue was also discussed in May at a meeting of the Malaysia-Singapore Joint Committee on the Environment in Malaysia.

Malaysia had responded on June 30 to Singapore's request for the projects to be temporarily suspended until the Republic receives and studies information on them. The Straits Times understands that Malaysia's Department of Environment was responding to a letter sent by the National Environment Agency.

The Malaysian Foreign Ministry then sent a diplomatic note to the Ministry of Foreign Affairs (MFA) on July 1.

Malaysia has also given Singapore preliminary general information on the projects and promised to share all other information once ready, Mr Masagos said.

Singapore is seeking further clarifications on some of the information provided, and will study the projects' impact.

"We have proposed to hold consultations with Malaysia so that both sides can further discuss and exchange information on these projects," he added.

The major reclamation works first attracted controversy last month, with concerns over their possible impact on Singapore and the environment.

The first project, a luxury home complex on a man-made island three times the size of Ang Mo Kio, is located near the Second Link. Dubbed Forest City, it is developed by China's Country Garden Holdings and a Johor state company.

The second is a residential project by China developer Guangzhou R&F Properties named Princess Cove.

Singapore was not given prior information on either project, and it is concerned about the effect on the coastal environment and infrastructure, among other problems, said Mr Masagos.

Under international law, Malaysia is obligated to "not permit reclamation activities of this scale and nature to take place so close to Singapore without first conducting an environmental impact assessment", he said.

If damage to the environment has been caused or is imminent, Malaysia has a duty to immediately notify Singapore, he added.

Under a 2005 settlement agreement following a reclamation case, both countries must monitor their environments in the Johor Strait, share information and address any adverse impacts.

According to a Johor official, Forest City developers had voluntarily stopped work for about a week while awaiting approval from the Department of Environment. But a Straits Times check on June 25 found that work on a sandbank was still ongoing, as the developers had asked for more time to wind down operations.


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Change of lawyer again for 5 accused: Little India riot

Straits Times
23 Jul 2014
Walter Sim

FIVE men accused of being involved in the Little India riot are getting new lawyers again - after their previous lawyer M. Ravi dropped them earlier this month.

This will mark their second change of lawyers: the Indian nationals, whose cases are among 11 still pending, had let go of the pro bono lawyers assigned to them by the Law Society's Criminal Legal Aid Scheme (CLAS), to privately engage the activist lawyer.

Mr Ravi told The Straits Times last week that the five men - Ravi Arun Vengatesh, 25, Selvanathan Murugaeson, 28, Periyaiah Ganesan, 25, Arun Kaliamurthy, 28, and Rajendran Mohan, 26 - had in December approached him for pro bono help which he "could not in good conscience deny".

Mr Ravi said he was "reluctant" to discharge the five men, but "evolving circumstances" - such as other cases he has since taken on - led to his decision.

"Client interests are paramount... CLAS are in a better position to aid the accused persons in terms of resources and time," he said, as one lawyer will be assigned to each accused. "I had discussed with the accused persons and they were agreeable to CLAS representing them," he added.

Meanwhile, a spokesman for the Law Society told The Straits Times: "It is problematic when accused persons ask for pro bono lawyers, are given such volunteers, then discharge them, then ask for pro bono lawyers again."

"CLAS believes this will be difficult, given that the five had discharged their first set of pro bono lawyers," he added.

"The five cases are almost at trial stage, which means that the new pro bono lawyers will have very little time to prepare." Still, CLAS said it will try its best to help the five, who are "without means".

Mr Ravi had earlier filed two applications at the High Court - both of which he later withdrew - linked to last December's Little India riot, the worst public disturbance here in 40 years.

He had asked for charges against his five clients to be quashed, alleging that the Committee of Inquiry into the riot was in contempt of court.

In an unprecedented ruling on June 24, the High Court ordered that costs of $1,000 be borne by the five men and Mr Ravi was to reimburse them the cash, after finding he had failed to act as a competent solicitor.

Mr Ravi also filed a judicial review application against daily reporting conditions set by the immigration authorities against Arun, Rajendran and Ravi Arun, who managed to post bail. The trio were ordered on May 7 to pay $3,000 when the application was withdrawn.When asked if they could foot the bill, and if so, whether he would reimburse them the money, Mr Ravi said he was unable to comment.

Among the 25 accused in the Little India case, five have been given jail terms of 18 to 33 months each for rioting.

Another nine, whose rioting charges were amended to ones such as failure to disperse, were each handed jail terms of between 15 and 36 weeks.


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More than just the Companies Act

Business Times
16 Jul 2014
Kala Anandarajah

Directors must also always be up to date with new developments in rules, regulations and laws

MOST directors are already aware that as officers of a company, they have three key fiduciary duties: a duty to act with due skill and care; a duty to act in the best interest of the company; and a duty to disclose and act transparently.

Specifically, a director's duty to act with due skill and care requires an awareness of the considerable number of statutory duties and other legal obligations that apply to the company and consequently the role of a director. What the director does with that awareness is critically important and not the mere fact of the knowledge of the duties and obligations.

Yet, it is not for the director to personally ensure compliance with every rule, regulation or law. Rather, the director must ensure that the management of the company maintains a sound system of risk management and internal controls that will ensure compliance.

This role of the director is not new and has existed for as long as the company has existed. For listed companies, Article 11 of the Corporate Governance Code (CGC) expressly provides for the board of directors to take ownership and responsibility for the governance of risk in a company, and in ensuring that a proper risk management process is put in place.

Of course, in a legal environment which is constantly evolving, it is not easy for a director to ensure that the duty of skill and care is performed properly. Indeed, the changes to the rules and regulations often go beyond the Companies Act, to the many other regulations which can impact the company in which a person is a director.

Let me illustrate this with three such areas which are typically not in the radar of directors.

Employment-related duties

Employment laws and regulations, and along with it, employers' responsibilities to ensure health and safety, have recently become significantly more stringent.

Amendments to the Employment Act, which took effect on April 1, 2014, extended the protection of the Act to more workers, including managers and executives.

Furthermore, from August 2014, companies will have to advertise open positions on the National Jobs Bank before foreigners can be considered for a position in limited instances. Separately, the Tripartite Alliance for Fair and Progress Employment Practices - which is non-statutory and so, non-binding - has nevertheless seen the Ministry of Manpower imposing sanctions against companies for discriminatory employment practices.

On workplace safety and health, more stringent incident reporting regulations came into force in January 2014.

Under both the Employment Act and the Workplace Safety and Health Act, where companies do not comply with these new and other requirements, directors can be liable if it is shown that they had neglected to ensure compliance.

It is important that directors recognise this policy shift towards greater protection of employees to avoid possible violations. In practice, this means that while management designs and implements measures to ensure compliance, it is the board that must, at the very least, query and call for checks that implementation has been effective. Any delegation of authority should be appropriate and practices compliant. A failure by the board to do so may mean that it and its directors have been derelict in their duty to act with due skill and care.

Competition law

Competition law remains an area which is little understood by directors, even though they could personally face severe consequences for breach of fiduciary duties if the company is found guilty of an anti-competitive act.

Guidelines issued by the Competition Commission of Singapore provide that the role of the directors in companies which have engaged in anticompetitive activities could potentially be an aggravating factor to increase the financial penalty imposed on the violating company. The Competition Appeal Board has even held that directors' involvement in a company's infringement would always be inevitable and that it was a factor to be considered.

Fortunately, there are no specific criminal consequences under the Competition Act of Singapore for directors whose companies have breached the Act. It is sobering to know that countries such as Indonesia and Thailand impose personal criminal penalties for directors where the company has violated their respective competition law statutes.

In the UK, directors can face not just criminal penalties for infringements of competition law, but also Competition Disqualification Orders. These Orders can result in the director being disqualified from directorships of any company for between two and 15 years.

Drawing a parallel in Singapore, if a company's anti-competitive behaviour is attributable to mismanagement by directors, then they could be similarly disqualified under the Companies Act.

Personal data protection

Personal data protection is a new concept in Singapore's parlance. Data protection laws govern the collection, use and disclosure of personal data for legitimate and reasonable purposes. One facet of the new law is the establishment of a national Do Not Call (DNC) Registry, which must be checked before a company seeks to engage in activities such as telemarketing.

On both fronts, companies are obligated to ensure that processes are in place to manage personal data, and a failure by a company could, if neglect is found, implicate the directors.

A broader awareness

With large numbers of companies operating across borders, it is imperative that Singaporean directors have a sound understanding of the implications of the non-compliance of statutory obligations in other jurisdictions. In many cases, non-compliance incurs personal liability and potentially the inconvenience of travel restrictions.

In fairness, courts accept that directors cannot bear personal responsibility in all cases of a company failing to comply with its statutory obligations. A sensible and commercially savvy approach will be taken.

Yet, directors have a fundamental and non-compromisable duty to put in place prudent arrangements to properly supervise management. Where he ignores this duty and non-compliance surfaces in the company, he may be in breach of his duties.

As ignorance of the law is no excuse, a director must also always be up to date with new developments in rules, regulations and laws, while ensuring proper control measures are in place in their companies.

The writer is a partner in Rajah & Tann LLP and a member of the Governing Council of the Singapore Institute of Directors

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Driver fined $8k for causing dad's death

Straits Times
10 Jul 2014
Elena Chong

AN ENGINEER who caused the death of his father in a road accident was fined $8,000 and banned from driving for five years yesterday.

James Quek Teck Soon was behind the wheel of his Kia Picanto when he failed to keep a proper lookout and rammed into the back of a tipper truck along Punggol Way on Feb 6. The 24-year-old was driving home with his 71-year-old father, Mr Albert Quek, and elder brother Johnson at the time.

His father was seated in the back of the car, while his 43-year-old brother was in the front passenger seat.

The force of the impact threw the car forward and it side-swiped a stationary car before coming to a halt on the traffic light island at a junction of Punggol Way and Punggol Field.

The father suffered severe bodily injuries and was taken to Khoo Teck Puat Hospital where he died about 2 1/2 hours later.

Quek was warded for two days while his brother had a couple of fractures as well as lung contusion.

A second charge of causing grievous hurt to his brother was taken into consideration.

Quek could have been jailed for up to two years and/or fined for causing death by doing a negligent act.


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Beefed-up rules on exotic investments 'welcome'

Straits Times
23 Jul 2014
Yasmine Yahya

But if not done carefully, they could hurt investors, weaker firms

TOUGHENING up the rules surrounding more unconventional investment schemes will help protect consumers but if the regulation is not done carefully, it risks hurting even more investors, said financial experts.

The beefed-up rules, while welcome, could place a heavy financial burden on companies as they try to comply, and may even force some to go out of business, they said yesterday.

This, in turn, might spell trouble for investors who placed money with these firms.The rules being flagged by the Monetary Authority of Singapore (MAS) come after hundreds of people here have been burned by two types of exotic products - precious metal buybacks and collectively managed investment schemes.

These are very similar to investment products that already come under MAS regulation but are deliberately structured in such a way that they do not fall under the ambit of the Securities and Futures Act, the MAS said.

Under the first, investors can buy gold, silver or platinum with the guarantee that they can sell it back to the operator at a higher, fixed price, regardless of the metal's market price.

There have been scandals over the past year involving such investment products peddled by firms such as Genneva Gold and Virgin Gold Mining Company. Both firms have been accused of financial impropriety.

The MAS said in a paper released on Monday that it plans to regulate these investments as debentures, or a type of bond. This would mean that an operator who wants to launch a precious metal buyback scheme would have to undergo the same processes and comply with the same rules as bond issuers.

Collectively managed investment schemes allow investors to buy a direct stake in an asset, say a unit in an apartment block, and then pool the funds from all the investments in the entire block.

The block is then managed and rented out by the scheme operator. Investors make returns from an income pool that is divided among the whole group rather than from the rents collected at their own unit. EcoHouse and Profitable Plots are among operators of similar schemes. Investors have filed complaints with the Commercial Affairs Department against both firms after they failed to meet payout promises.

Under the new MAS proposals, such schemes would come under the existing code on collective investment schemes.

Investor Haden Hee, who sank $50,000 into Profitable Plots, said it was time the Government stepped in. "When I was making the investment, I was told that even wealthy investors, lawyers and doctors were doing it too. I think they were all deceived," he said.

Fellow Profitable Plots investor Ivan Teo said many consumers likely assumed that such schemes were already regulated. He said: "Many of us thought that since Singapore has very strong property investment rules and this was a British firm, we could be confident investing in it."

Eternal Financial Advisory chief executive Viviena Chin said she has advised several clients over the years to avoid such products. MAS' move would at least get consumers thinking twice before putting their money into such unconventional schemes, she added.

She said: "I know friends and clients who have put their savings into unregulated investments such as wine and lost their money. I think it's high time MAS clamps down on all unregulated investments and makes it difficult for them to market (their products) in Singapore."

Bringing operators of such products under the ambit of the law will likely have a financial impact on them, said financial advisers.

If they are regulated, they would have to obtain a licence from MAS and their sales staff would have to undergo exams to become licensed financial advisers, both of which are lengthy processes. They may also have to maintain a minimum base capital of up to $1 million.

This could put many such firms, most of which are small operators, out of business, said Promiseland financial planner Wildred Ling. "That could be good because fly-by-night operators will have to leave and we'll have only legitimate players left," he said.

One land investment firm with about 20,000 clients here agreed. "Our company is unregulated but we have our own strict internal compliance standards. Being regulated would put us in good stead and it would weed out the undesirable companies," said a spokesman.

However, MAS has to take into consideration the impact regulation might have on people who have already invested in such schemes, he added.

In some cases, the new rules, if passed, would mean some companies may be unable to sell their products to retail investors.

Take land banking firms, which allow investors to collectively buy plots of undeveloped land with the promise that it can be sold to a developer for a profit. Under the law now, property investment firms cannot take retail investors' funds for investments in vacant land that does not generate income.

"Perhaps MAS could allow these firms to service existing customers but not take on new retail clients," Mr Ling said.

And there are many collectively managed investment schemes that have popped up in Singapore in recent years that may realise that their business does not comply with the law.

The existing code on collective investment schemes require them to invest in liquid assets - those that can be bought and sold easily - and many do not.

There are, for example, agricultural schemes where investors can buy trees, cassava or wine grapes, which the operator will cultivate and harvest on their behalf.

There are even farming schemes, where investors pay the operator a fixed amount of money to buy farm animals or birds such as emus. The scheme operator is then responsible for harvesting and selling to distributors. The investors receive payouts from revenues of these activities.


Background Story


• Operators which want to launch a precious metal buyback scheme would have to undergo the same processes and comply with the same rules as bond issuers.
• Collectively managed investment schemes, similar to those offered by EcoHouse and Profitable Plots, would come under the existing code on collective investment schemes under the new MAS proposals.

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Related headlines

Regulator plans new rules to shield investors, BT, 22 Jul

Doubts 'raised over projected US album sales': City Harvest trial

Straits Times
16 Jul 2014
Walter Sim

Ex-board member says he was also against buying Riverwalk property

A FORMER City Harvest board member, facing three counts of criminal breach of trust, yesterday said he had raised doubts about the projected American album sales of church founder Kong Hee's wife Ho Yeow Sun.

John Lam Leng Hung, 46, one of six church officials on trial, said he had told the church's former finance manager there was a need to "justify" the sales projections of Ms Ho's debut US album for 2011 and 2012, given as $16 million and $23 million respectively.

He had cited details, like the number of albums to be launched and copies sold, as well as distribution contracts and the projected sales volume in comparison to that of other pop acts, which were necessary to satisfy auditors that such future assets were realistic.

Ms Ho was the face of the mega church's Crossover Project, launched in 2002 as an "outreach strategy" to evangelise to non- converts through pop music.

The sales projections were to be included on the 2008 balance sheets of music production firm Xtron, run by a long-time church supporter, which was then managing Ms Ho's entry into the US market. For various reasons, the album was never launched.

Fellow accused Serina Wee, 37, who was providing accounting services to Xtron, had sought Lam's advice on the company's assets.

Wee, formerly a finance manager of the church, agreed in an e-mail that Lam had made pertinent points. She added that Kong had "some figures" and album discussions were still ongoing.

This was not the only instance Lam said he had doubts about the church's plans.

The court heard that he also opposed the board's decision to buy the Riverwalk property - ostensibly to expand the church's premises - for $20 million. The price was too high, and he saw no need to rush into the deal, he said in an e-mail to the board which was read out in court yesterday.

For a second day, Lam's lawyer Kenneth Tan cited multiple e-mails to show that Lam, despite being on the church investment committee, knew only bits and pieces of what was going on.

Mainly he was consulted on accounting matters, Lam maintains.

He said the man who proposed the transactions central to the current trial was fellow accused Chew Eng Han, the church's then-investment manager.

Church leaders have been accused of misappropriating millions in church funds to buy sham bonds from Xtron and another church-linked firm to fund Ms Ho's music career. The leaders are said to have used building fund monies to enter a bond subscription agreement with Xtron worth $13 million in July 2007.

This was revised upwards to $18.2 million in August 2008 to allow Xtron to buy Riverwalk, which was at the time valued at $17.55 million.


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ADV: LexisNexis Book of the Month this July!

Singapore Law Watch
10 Jul 2014

Mum who pushed son to death to plead guilty

Straits Times
23 Jul 2014
Hoe Pei Shan

Jobless mum worried over caring for special needs boy, court told

HE STRUGGLED and broke free twice, but nine-year-old special needs child Gabriel Loh was eventually pushed off a fifth floor window ledge to his death - by his mother.

Rebecca Loh, 32, said she would plead guilty to culpable homicide not amounting to murder, the High Court heard yesterday.

The accused was diagnosed by an Institute of Mental Health (IMH) psychiatric assessment as suffering from post-schizophrenic depression at the time though she was "not of unsound mind" and cleared as fit to plead.

Court documents filed by the prosecution said her son suffered from a host of medical conditions, including liver impairments that left him jaundiced and malnourished, and osteoporosis, making his bones brittle.

The court heard that Rebecca Loh, who was jobless, had been worried about providing for her son and thought that by injuring him she could get him taken away from her to a children's home, where he could be better cared for.

On June 1 last year, she picked him up and carried him to their fifth-storey West Coast Road flat's kitchen window.

The boy put up a struggle, wriggling out of his mother's grasp twice, but by the time she caught hold of him a third time, he told her that he did not have any more strength to resist, and began to cry.

Loh placed him on the window ledge where he tried to hold on to clothes poles. However, she pushed his hands away and he fell to the ground. He later succumbed to his injuries in hospital.

Loh was arrested the same day and charged with her son's murder, but the charge was amended last week to culpable homicide not amounting to murder.

The prosecution, in its filings, said Loh's act "was done knowing that it would be likely to cause death, but without any intention to cause death". She could face up to 10 years in jail and/or a fine.

Loh's history of psychiatric conditions dated back to when she was first seen at the IMH in 2006 and diagnosed with schizophrenia.

Between 2011 and last year, she brandished a chopper in a coffee shop, as well as beat and strangled her mother, with whom she lives and who is the sole breadwinner. Loh lost contact with the boy's father before she gave birth.

The IMH report following Loh's arrest said the accused "was at a moderate to high risk of future violence" and has had "a history of relapse of psychotic symptoms due to non-compliance with treatment".

Loh has been scheduled to deliver her guilty plea on Sept 26.


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