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Saturday, June 30, 2012

Four British banks to pay for scandal!

LONDON: Britain's four biggest banks have agreed to pay compensation to customers they misled about interest rate hedging products, following an investigation by Britain's financial regulator.

The Financial Services Authority (FSA) said yesterday it had reached an agreement with Barclays, HSBC, Lloyds and RBS to provide appropriate compensation following an investigation into the misselling of the products.

The FSA said it found evidence of “serious failings” by the banks and added: “We believe that this has resulted in a severe impact on a large number of these businesses.”

The finding by the FSA of misselling could lead to compensation claims ranging from many millions to several billion pounds from small companies which bought them.

It is the latest in a string of misselling cases that have plagued the financial services industry for over two decades. Banks are already set to pay upwards of £9bil (US$13.96bil) in compensation to customers for misselling loan insurance.

The news will compound problems for a sector that was hit hard on Thursday by news of a record US$450mil fine levied on Barclays for rigging interest rates.

The FSA said the banks had agreed to compensate directly those customers that brought the most complex products.

The products range in complexity from caps that fix an upper limit to the interest rate on a loan, through to complex derivatives known as “structured collars” which fixed interest rates with a bank but introduced a degree of interest rate speculation.

The banks have agreed to stop marketing “structured collars” to retail customers.

The size of the likely compensation was not disclosed but Lloyds issued a separate statement saying it did not expect the financial impact from the settlement to be material. - Reuters

Myanmar warns Suu Kyi to stop calling nation Burma, a British colonialism legacy

 YANGON: Myanmar’s authorities have ordered opposition leader Aung San Suu Kyi to stop calling the country “Burma”, its colonial-era name widely used to defy the former junta.

Myanmar pro-democracy leader Aung San Suu Kyi visits the Louvre Museum on Friday, June 29, 2012 in Paris. Myanmar authorities sternly urged Suu Kyi to stop calling the country 'Burma' and start using the name 'Myanmar.' (AFP Photo/Fred Dufour)

The old regime changed the country’s official name two decades ago to  Myanmar, saying the term Burma was a legacy of British colonialism and implied  the ethnically diverse land belonged only to the Burman majority.

Suu Kyi and her National League for Democracy (NLD) party vigorously  opposed the change, decrying it as a symbolic step by the generals towards  creating a new country.

Berating her for using the name “Burma” during landmark recent visits to  Thailand and Europe, the Election Commission accused Suu Kyi and party members  of flouting a constitution they have vowed to uphold.

“As it is prescribed in the constitution that ’The state shall be known as  The Republic of the Union of Myanmar’, no one has the right to call (the  country) Burma,” it said in a statement, published in state mouthpiece The New  Light of Myanmar.

Daw Aung San Suu Kyi called Myanmar ’Burma’ in her speech to the World  Economic Forum in Thailand on 1 June, 2012,” it noted.

“Again, Daw Aung San Suu  Kyi called Myanmar ’Burma’ in her speeches during her Europe tour.”

“Daw” is a term of respect in Myanmar.

Global leaders also face a dilemma of what to call the country, which is  emerging from decades of army rule under the guidance of reform-minded Prime  Minister Thein Sein.

Britain’s David Cameron calls it “Burma” while recent speeches by US  President Barack Obama also referred to its colonial name.

But his Secretary of State Hillary Clinton chose a more diplomatic path on  a trip to the nation in December, employing the term Burma but saying it  sparingly, generally preferring to dodge controversy by saying “this country.” -- AFP NST

Hong Kong 15th aniversary on return to China

 Maintaining a China identity

Hong Kong SAR chief executive-elect Leung Chun-ying takes over the reins of government tomorrow and throws a challenge to the city to really call China its home.

TOMORROW, the people of Hong Kong and the mainland Chinese will celebrate the 15th anniversary of the return of Hong Kong to China.

Days ahead of the momentous celebration that will be attended by Chinese President Hu Jintao and featuring fireworks, military parade and parachute jumps, Hong Kong Special Administrative Region (HKSAR) chief executive-elect Leung Chun-ying threw a challenge to the city to really call China its home.

During an interview with the Chinese media late last month, Leung said that since the handover in 1997, the city dwellers had developed a sense of belonging with their motherland but it would take a little longer before remnants of the British influence disappear entirely.

New leader: Leung speaking to a group of low-income families at the rooftop of an old residential building in Sham Shui Po District, Hong Kong, in this file photo.
“There are two meanings of the handover. First, Hong Kong was legally returned to China and the Chinese government retained the administrative power of Hong Kong by establishing the HKSAR and passing the Basic Law for the ‘one country, two systems’ and ‘Hong Kong run by Hong Kong people’ model,” the People’s Daily quoted Leung.

“On the other hand, Hong Kong was under British control for 100 years. More needs to be done to rid that influence on people.”

For instance, he said, some Hong Kong people would still say that they were “leaving for China” instead of “going to the mainland”.

He cited an example where a Hong Kong saleswoman told her friend on the mainland that she had visited Beijing on her friend’s National Day, instead of referring to the celebration as hers, too.

“These people may not have any political stance when they speak that way. This is probably due to decades of British rule. We will keep on educating our people so that they can better understand the country. But we cannot rush it; it has to be done step by step,” he said.

Leung will begin his tenure as the new boss of the city for a five-year term starting tomorrow, along with his government line-up of Carrie Lam Cheng Yuet-ngor, John Tsang and 18 others.

Besides working on better interaction between Hong Kong and mainland Chinese people, the new HKSAR government has to tackle social problems such as the influx of mainlanders which puts a strain on the city’s healthcare and housing resources.

On the economy, Hong Kong will have to work around the central government’s supporting policies to maintain its competitiveness and improve its people’s livelihood.

In its editorial, the Hong Kong-based Sing Pao daily said the people of Hong Kong had mixed emotions and experienced ups and downs in the last 15 years, but the city was heading in the right direction under the “one country, two systems” policy.

“It was unavoidable that we had to ‘cross the river by touching the stones’. In the past 15 years, we have seen numerous conflict of opinions, political hostility and delayed reforms. No matter how many protests and demonstrations were staged, the majority of residents remain united in steering this boat named Hong Kong forward,” it said.

Oriental Daily hoped that Leung would “clean up the mess” left behind by his predecessors Tung Chee-hwa and Donald Tsang, and, turn around the economy and stabilise the social situation.

“During elections, Leung Chun-ying pledged to introduce a financial development unit if he was elected. Now he has walked the talk by setting up a committee headed by executive council member Laura M. Cha to form the objectives, functions and operations of the unit.

“Leung should invite financial advisers and economics experts to give their input on how to solidify Hong Kong’s status as the world financial centre and to counter future financial crises. Let us see if the Leung administration can lead Hong Kong on a new path of development,” the newspaper said.

Recently, Beijing announced a package of supporting policies such as issuing bourse-traded funds listed on both the Hong Kong and mainland stock markets, encouraging foreign investors to use the yuan for trade settlement in the city and easing restrictions on small businesses run by Hong Kong residents in the mainland.

Peng Qinghua, director of the liaison office of the central government in HKSAR, told China Daily that Beijing had played a key role in maintaining Hong Kong’s prosperity by keeping its promise of autonomy for the HKSAR government.

“The economic achievement in Hong Kong today is the result of its people’s ability to take the opportunities, and their flexibility and diligence. However, it could not have happened without the support of its motherland,” he said.

Peng hoped that the people from both sides would continue to respect their differences, improve communications and deepen cooperation in order to achieve real unity.


PLA gaining trust in HK

Shortly after being stationed in Hong Kong, Brigadier Zhang Jie said he was asked by a city official why were his soldiers "so invisible".
PLA gaining trust in HK
Soldiers of People's liberation Army pose for photograghs at teh Stanley barracks in Hong Kong earlier this month. Edmong Tang/China Daily

The People's Liberation Army troops had been at the garrison for a month, following the return of Hong Kong to China on July 1, 1997, and many residents expected them to have a high-profile presence.

"I told the official that the reason we were invisible was because we only leave the base when necessary, to not disturb residents," Zhang said ahead of the 15th anniversary of the handover.

This is a policy that stayed unchanged for 15 years.

The garrison, which has roughly 8,000 troops spread over battalions of infantry, engineers, airborne staff and navy personnel, is housed in several bases across the special administrative region.

Due to some differences between the mainland and Hong Kong, which the United Kingdom controlled for more than a century, and the "one country, two systems" policy, PLA troops stationed adhere to stricter rules than those in other parts of China.

"We have to be committed to strict discipline to gain the trust of Hong Kong citizens," said Zhang, who heads the garrison's infantry division.

Liang Yuejia, deputy director of the garrison's political department, explained that there was a lot of suspicion among residents at first that soldiers would get involved in local affairs, such as reacting to street protests.

"But we didn't. Unless the protesters illegally entered our barracks or threatened our lives, we did not resort to contacting the police," he said, adding that they respected such activities according to local regulations.

Even when anti-communist literature was thrown over the walls or staff received harassing calls from political groups, officials said they did not react.

That policy of noninterference has over the years helped the garrison gain a good image among residents.

A poll of 1,006 people by the University of Hong Kong last year found that only about 2 percent of those polled had a negative opinion about the garrison.

"Developing a good relationship with citizens has been the key," said Lieutenant General Zhang Shibo, commander of the garrison. "I think that mission has been accomplished."

Major Wu Qiong, a battalion commander with the garrison's communication station, added: "Before 2000, Hong Kong citizens usually kept their distance. But after years of interaction, many now often say hello. I guess that's because they are aware of our decent style of working and strict discipline."

Increasing openness

Compared with the "invisibility" of the early years, the garrison has greatly increased its openness to the outside world in recent years.

Besides regular training and exercises for army personnel, officials have also been promoting links between Hong Kong and the mainland through various activities, said Lieutenant General Zhang Shibo.

The troops have actively participated in public activities, such as planting more than 50,000 trees, donating 2.5 million milliliters of blood and helping more than 2,600 elderly people and children in care homes.

The garrison has also opened its barracks 23 times to visitors, receiving around 469,000 local people, and held summer camps for children.

The last open day, on May 1, attracted 37,000 visitors, far more than the 28,000 expected and extra free admission tickets had to be distributed. Some people waited in line overnight to get a ticket.

During the open days, guests can view the military facilities and watch soldiers perform combat skills and motorcycling stunts, including drills by the first female special forces of the PLA army.

"One of the reasons why we are gaining increasing recognition in Hong Kong is that the openness of the barracks provides local people with an opportunity to know more about us, as well as a platform for us to serve them," said Lieutenant General Wang Zengbo, political commissar of the garrison.

The activities organized by the garrison also present the PLA, the Communist Party of China and the mainland to Hong Kong residents in a proper way, Wang said. "Their national identity and patriotism have greatly increased," he said.

The garrison has organized seven military summer camps for around 1,200 local teenagers, six exchange activities with 1,600 students from 12 local universities and a military camp for college students. The troops also visited the University of Hong Kong for the first time in 2011 and talked with students.
A total of 215 teenagers participated in the military summer camp in 2011, and the number is expected to reach 260 this year.

"Despite the increase, every school can only send one student, while dozens of others actually want to come, so we'll continue enlarging the camp's scale in future," said Wang.

Tung Chee-hwa, former chief executive of Hong Kong, said the camps influence many families and hundreds of people even though there are only about 200 participants every year, and they also would influence the participants' whole life even they only last for 15 days. 
In 2010, Hong Kong saw an upsurge of young people wanting to enlist in the military. Most of the 4,000 local young people who signed up for enlisting participated in the garrison's exchange activities and military camps.

The summaries written by military camp participants revealed that the 15-day interaction with the garrison provided them with a chance to learn more about the troops, socialism, the Communist Party of China, as well as the strength of the PLA and China, Wang said.

Boosting defenses
With the garrison enjoying a good image in Hong Kong, Zhang Shibo said the focus has shifted from public relations to bolstering military defense.

The mission of the garrison is mainly to exercise China's sovereignty over Hong Kong, safeguard social stability and provide disaster relief and defense campaigns. However, military training is also a priority.

"Since 2007, we have invested millions to upgrade our army's equipment, navy and air force," said the garrison's commander.

Based on Hong Kong's strategic features, the PLA garrison added a special forces unit, an armored battalion and a chemical defense battalion. It has also been equipped with reconnaissance planes, armed helicopters and air defense missiles.

Soldiers receive regular training. More than 20 drills were held in Hong Kong over the past 15 years.
"We aim to test our basic military strength, commanding and organizing capabilities through joint drills," Zhang Shibo said.

The infantry brigade, the garrison's pillar force, has ranked at the top for three years in the military competitions in the adjacent PLA Guangzhou Military Area Command, which has the administrative control of the garrison.

Speaking of the possible challenges the garrison faces, Brigadier Zhang Jie said the garrison "needs to be prepared to tackle possible regional conflicts at all times".

Contact the writer at

Yu Daimin in Hong Kong contributed to this story.

Friday, June 29, 2012

Chinese Astronauts return to Earth safely; Success on road to deep space!

Module re-entry process: Shenzhou-9’s journey back to earth CCTV News - CNTV English.

After thirteen days in space, the astronauts aboard the Shenzhou-9 spaceship will return to the Earth.

The first stage of the process is for the re-entry module to separate from the orbital capsule.

The propulsion module will later separate from the re-entry module, after it’s propelled it to a lower altitude of 140 kilometers. The re-entry module will then adjust its position before making its entry into the atmosphere. Well, as we can see, according to accurate calculation, the module is to land at Siziwang Banner, in central Inner Mongolia Autonomous Region.

Let's see this simple illustration. The module will pass through the so-called "black out area". At this stage, communication is impossible, due to high levels of friction with the atmosphere, causing extreme temperatures. When the capsule is out of the black-out area, several parachutes will be released one by one, to gradually slow the module's descent. When the vehicle gets below 10km, the heat shield will be jettisoned. At 1 meter above the ground, 4 small engines will ignite to reduce the speed to a safe range for landing. Once on the ground; the re-entry module will communicate with the control center to show its location, so rescue teams find it as soon as possible.

The completion of the Shenzhou-9 mission will bring China one step closer to building its own fully-fledged space station by 2020. China's permanent space station is expected to weigh about 60 tons, so it require rockets such as Long March 5 rockets to send different parts into space. At the hub of China's future space station will be the Core Module. It will control the station's altitude, propulsion, and life support systems for the astronauts.

At one end of the core module is a small connecting chamber. On each side of this are the two Laboratory Modules. Experiments can be carried out both inside and outside these modules, testing such things as exposure to cosmic rays, a vacuum environment, and solar winds. On the other end of the space station is the cargo delivery module, which will carry supplies, equipment and energy stocks. Back on the other side, attached to the connecting chamber will be the Shenzhou spacecraft which will travel between the space station and the earth. China's space station is an ambitious and complicated structure but it’s still only about one-sixth the size of the International Space Station.

Currently flying at an orbit of around 400 kilometers above the earth is the International Space Station. The US and Russia have led the design and construction of the ISS, with 16 other countries also contributing to the project. China's main contribution to the ISS is the Alpha Magnetic Spectrometer. It is a particle physics experimental instrument designed to search for anti-matter and dark matter. These two mysteries have been puzzling scientists for decades according to theory, they should exist.  But so far, no direct evidence has been found. It's planned that the ISS will plunge back into the ocean in 2028.

By that time, if China's space program goes according to plan, China's space complex will then be the only space station orbiting the earth.

The Success on road to space!

BEIJING, June 29 (Xinhua) -- The return of the Shenzhou-9 spacecraft to Earth Friday morning marked the end of a 13-day journey through space for three Chinese astronauts.

But it also marked the beginning of a new journey for China as it inches closer to its goal of building a space station.

China's space program has accomplished in 20 years' time the same tasks that took developed nations nearly half a century to accomplish, including manned space flights, space walks and a manned space docking procedure.

The recent successful docking of the Shenzhou-9 and Tiangong-1 lab module marks a new height for Chinese space exploration, as well as a new leap forward for national rejuvenation.

China's space exploration took a long time to ramp up. In 1992, 43 years after the founding of the People's Republic of China, the country decided to establish its manned space program.

Scientific policies have facilitated the program and helped it develop comprehensively and sustainably. The aerospace industry was given a larger role in the country's 12th Five-Year Plan (2011-2015) and authorities have taken pains to implement every step of the manned space program with great care.

The success of the Shenzhou-9 has demonstrated the power of China's collective wisdom and capability. About 110 research institutions have directly participated in the manned space program thus far, with more than 3,000 institutions and units coordinating their efforts.

The mission has also demonstrated the success of socialism, showing that it has the political advantage of accumulating wisdom and resources to achieve great things.

Facing limitless space, China's space program is only just beginning. The country will face challenges on its road to rejuvenation, but the success of the mission has boosted national confidence and shown China's people that the country's space program will have a bright future.- Xinhuat

Touchdown! Chinese Space Capsule With 3 Astronauts Returns to Earth 
Date: 28 June 2012 Time: 10:06 PM ET

This photograph of a China CCTV broadcast shows the Shenzhou 9 space capsule lying on its side after landing in an autonomous region of China in Inner Mongolia on June 29, 2012 Beijing time (10 p.m. June 28 EDT) to end a 13-day mission to the Tiangong 1 s
This photograph of a China CCTV broadcast shows the Shenzhou 9 space capsule lying on its side after landing in an autonomous region of China in Inner Mongolia on June 29, 2012 Beijing time (10 p.m. June 28 EDT) to end a 13-day mission to the Tiangong 1 space lab module.

Three Chinese astronauts returned to Earth Thursday (June 28) after 13 days in space on a historic mission that made their country only the third nation ever to successfully dock a manned spacecraft to another in orbit.

China's Shenzhou 9 space capsule landed at about10 p.m. EDT (10 a.m. Friday, June 29 Beijing time) in Inner Mongolia, an autonomous region of the People's Republic of China.  To prepare for their journey home, the space crew — which included China's first female astronaut Liu Yang — separated the Shenzhou 9 capsule its target, the Tiangong 1 prototype space module, on Wednesday (June 27).

Their landing was broadcast live on China's state-run CCTV television network, showing the capsule streaking through the atmosphere like a meteor, deploying its main parachute, then making the final landing and rolling over on its side in a rough touchdown.

"We fulfilled the first manned manual docking," mission commander Jing Haipeng told CCTV reporters after exiting the Shenzhou 9 capsule. His comments in Chinese were translated into English by CCTV. "For the country and people all across the country, thank you for your concerns."  [Photos of China's Shenzhou 9 Mission]

Jing and crewmates Liu Yang and Liu Wang appeared to be in good health after their space mission. The trio wore broad smiles and waved to cameras after leaving their spacecraft, but did sit in reclined chairs to help ease their adaptation back to Earth's gravity after nearly two weeks in weightlessness.

Shortly after the landing, China's Premier Wen Jiabao proclaimed the Shenzhou 9 mission a complete success.

"This manned docking mission of Tiangong 1 and Shenzhou 9 marks a large milestone, a major breakthrough for China to master the space docking technology," Wen said while reading a statement. "And also, it marks a decisive step forward on China's second step on its space strategy."

Chinese astronaut Jing Haipeng, commander of the Shenzhou 9 mission, salutes after exiting the space capsule following landing in Inner Mongolia autonomous mission on June 28, 2012.
CREDIT: China Central Television/CCTV

China's big space leap

China's Shenzhou 9 mission, which included successful displays of manual and automatic dockings, represented an important leap forward for China's space program. In addition to being China's longest space mission to date, it also tested technology vital for the country's goal of building space station in orbit by the year 2020.

"Chinese astronauts have their own home in space now," Jing told China's President Hu Jintao on Tuesday (June 26) during a special call according to the state-run Xinhua news agency. "We are proud of our country!"

And while the orbital linkups are important technological achievements for China, the mission also carried a wider social impact because it included the country's first female astronaut: the 33-year-old Liu Yang.

"It was like a home in Tiangong, and I feel very happy and proud of my country," Liu Yang told reporters after landing.

Jing, the commander, is China's first veteran astronaut to fly in space twice. The third crewmember, Liu Wang, served as the Shenzhou 9 docking pilot.

"It feels really good to feel the ground and to be back home," Liu Wang said.

Shenzhou 9 mission, which launched into space on June 16, accomplished China's first manned space docking, after the spacecraft robotically docked to Tiangong 1 on June 18. Several days later, on June 24, the astronauts backed away from the orbiting module and parked their Shenzhou 9 spacecraft once more, demonstrating manual control over the procedure as well.

The successful linkups made China only the third country, after the United States and Russia, to accomplish manned dockings in orbit.

The Shenzhou 9 mission, as well as experiments performed aboard Tiangong 1 throughout the flight, tested technologies that will help China fulfill its goal of building a 60-ton space station in orbit by 2020.

"The data will help us improve technologies for astronauts' future, long-term stays in a space station," said Chen Shanguang, chief commander of the mission's astronaut system, according to Xinhua

China is not a member nation of the $100 billion International Space Station in low-Earth orbit, a roughly 430-ton orbiting outpost that is jointly operated by more than a dozen countries.

But Chinese officials have outlined an ambitious space program for the nation, which includes collecting samples from the moon and robotically returning them to Earth before landing astronauts on the lunar surface.

The Shenzhou 9 mission is China's fourth manned spaceflight. Previous expeditions were launched in 2003, 2005 and 2008.

The Tiangong 1 test module was launched into orbit in September 2011. In November, a robotic spacecraft, called Shenzhou 8, completed the country's first unmanned space docking. According to Chinese officials, Tiangong 1 has performed well, and could play host to another crew in the near future.

"Based on current conditions, the service of Tiangong 1 can be extended," said He Yu, chief commander of the Shenzhou 9 spacecraft, reported Xinhua. "It has consumed less than one-fourth of its fuel and no back-up systems have been used."

Depending on its condition, the module could remain in orbit as China continues its space station construction efforts.

"If Tiangong 1 was in perfect shape, it could work side by side with Tiangong 2, which will be launched in the future," He said.

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Thursday, June 28, 2012

Misrule worse than no rule!

Can someone be charged for an offence when at the material time there was no offence?

KUALA LUMPUR: The Federal Territory Islamic Religious Department (Jawi) does not need any court order to seize the book ‘Allah Liberty & Love – Courage To Reconcile Faith & Freedom’ by controversial writer, Irshad Manji, following its contents infringing Islamic laws, said Jawi senior enforcement assistant principal director Wan Jaafar Wan Ahmad.Malaysians Must Know the TRUTH: JAWI DOES NOT NEED COURT ...

NIK Raina Nik Abdul Aziz is accused of committing a crime, the “crime” being the distribution of a book which the Federal Territory Islamic Religious Department (Jawi) does not like.

If the sentence above sounds a bit odd, that is because it is.

Nik Raina is a manager in a bookstore. She is not an owner of a bookstore, she is an employee.

Therefore, she does not have any say with regard to what book is being sold. She just manages the shop, as her job title entails.

Now she is being charged in the Syariah Court for distributing a banned book.

But it is a book, it must be said here, that at the time of the supposed offence was not actually banned.

Therefore, it was not illegal to sell the book at the time.

Jawi raided the shop she was working in on May 23. Copies of the book were confiscated during the raid. The book was effectively deem­ed illegal on June 14.

So, on what grounds was Jawi confiscating the books? It is not based on the law, that is for sure, because no law was passed banning it until 22 days after the raid.

The only reason that can exist is that Jawi disapproved of this book and took it upon itself to take action even though there was no legal ground upon which it could do so. In other words, they didn’t like the book so they decided to raid a shop and take the book.

Does this sound odd to you? Does it sound like the action of a despotic state? It does to me.

How can a person be charged for an offence when at the time of the so-called wrongful act, there was no offence? You can’t possibly do that to a person.

There are constitutional provisions against such things. It is known as protection from retrospective legislation.

In other words, if you decide to make it illegal to wear yellow today, you can’t charge someone for wearing yellow yesterday. To do so would lead to an incredible injustice and the complete breakdown of the rule of law.

Now, because Jawi is an Islamic body, there are some who believe they are above criticism. I beg to differ; it is because they are a religious entity that they must be open to criticism, especially if they behave in a way that is unjust.

This is because as a religious agency they have an even greater responsibility to not tarnish their actions with acts of cruelty, meanness and vindictiveness. For by doing so they demean the very faith that they are supposed to be upholding.

But that is by the by. Any agency, be it religious or secular, has no right to treat people in this way.

They have no right to seize private property on their whim, and they have no right to charge someone for a crime that does not exist.

That is the bottom line. If we allow anyone to do so, we are simply throwing away our democracy and the protection that the rule of law provides us.

Brave New World  By Azmi Sharom

Related articles:

‘Violent lawyer’ may face action

PETALING JAYA: The Bar Council is looking at issuing a show-cause letter to the lawyer who was caught on video pushing and kicking a client.

Bar Council president Lim Chee Wee said that if there was a cause for further action, the lawyer would be referred to the Disciplinary Board.

“The Board (which is independent of the Bar Council) will decide whether to convene a disciplinary committee to investigate further or deal with the matter summarily.

“If convicted, the lawyer can face reprimand, fine, suspension, or be struck off the roll,” he said.

He said this in response to a 9.03-minute video clip on a “hooligan lawyer” that has gone viral.

The video showed two men, believed to be a lawyer and a house buyer, arguing in the presence of three others in an empty house on June 19.

The argument started when the house buyer refused to acknowledge receipt of several documents handed to him by the lawyer.

The lawyer, Tan Hui Chuan, who is a former Selayang municipal councillor, said it was not fair to pre-judge him.

“I am only human. The client bombarded me with hurtful and disrespectful words over and over again.

“I am 58 years old and about to retire. I never had any disciplinary issues before. As all can see, I only pushed him away from me, to make him stop.

“But he went on and on. I raised my hands several times as a sign of surrender but he kept pestering me.

“And yes, I kicked him once. But it was a soft kick,” he said.- The Star


Related posts:
Ethics vital for lawyers! Force to sign documents & hit client?

Wednesday, June 27, 2012

New tax rules create a quandary for lending to family members

CHARGING below market interest gets you in trouble with the taxman or the law against money-lending.

“Neither a borrower nor a lender be”.

This advice by Polonius, the King's adviser to his son in Shakespeare's Hamlet remains good advice today.

But good advice, it is said, is least heeded when most needed.

Lending money gives rise to risk of default, a stark reminder of today's global phenomenon.

At a personal level, it can lead to the loss of a friend, a relative remaining one only by virtue of blood ties.

The term “relative” is defined in our tax law to include a wide network of family members including a nephew, a niece, a cousin and somewhat incredibly “an ancestor or lineal descendant.”

How the latter is to be determined, the law has not made clear, leaving the conundrum perhaps to the wisdom of the courts.

In many cases, loans between family members are below-market loans.

By this is meant that the lender charges either no interest or a rate that is less than the “market rate” also known as the “arm's length” rate.

This is in breach of the tax law, which requires a loan to a related party including a relative to be at the market rate of interest.

This requirement has been made clear by a recent Government Gazette setting out rules on transfer pricing as the rules do not state that such loans must be in the context of carrying on a business or must be used in a business.

Thus when you make a below market loan to a relative, driven entirely by altruistic reasons and devoid of any business considerations, the tax law treats you as having derived imputed' income from your borrower and would proceed to levy tax on that imputed income.

This phantom income on which tax is levied equals the market rate you should have charged less the interest you actually charged.

This means that you must report the imputed interest as taxable income in your tax return failing which you will be in default of the tax law.

If you were to consider avoiding this unfavourable tax outcome by being somewhat hard-hearted and charged interest to your relative, then you are in breach of the Moneylenders Act.

The law here precludes the charging of any interest since you are not a licensed moneylender.

A moneylender under this law is any person who “lends a sum of money to a borrower in consideration of a larger sum being repaid to him”.

So this puts you, the lender, setting out to help a financially distressed relative, on the proverbial “horns of a dilemma”.

You are in the untenable position of breaking one or the other law.

This state of affairs seems to run counter to any coherent tax policy objective.

In the United States, the lending of money below market rate historically occurred without tax consequences.

Through a series of court cases over several years culminating in a case in 1984, the court held that the lender's right to receive interest is a “valuable property right” and where such a right is transferred by way of an interest-free loan, it is in the nature of a gift subject to “gift tax”.

But the point here is that the taxing of the interest-free loan is because of the existence of a gift tax.

We do not have such a tax in Malaysia and taxing imputed interest, as this measure is generally known, between related individuals not conducting business transactions, is a retrograde step.

We had long repealed a similar imputed income provision, which treated a person owning an unoccupied house as having an income source, even where no income exist.

Business related loans follow similar concepts, but here the law is entirely understandable and justified where the intent is to avoid tax.

If company A makes an interest-free loan to its subsidiary which is a tax exempt pioneer company, then this leads to tax results which are not reflective of transactions between commercial parties.

Not charging interest inflates the subsidiary's tax exempt profits enhancing its capacity to pay tax exempt dividends, without a corresponding tax liability on the lending parent had interest been charged.

Here the existence of a “tax shelter” where one entity has either tax exempt status or a tax loss position, can lead to tax leakage, the reason for the arm's length rule.

Interest-free business lending between related companies can also lead to anomalous results.

This is a consequence of the divergence between the tax treatment and the new accounting standards for public listed companies.

The taxman will require tax to be imposed on the lender on the imputed market rate interest.

Whereas if such a company lends RM100,000 to its subsidiary interest - free to be repaid in equal instalment over five years and the market interest rate is 10%, the accounts will reflect the lender as having a debt of RM75,816, which is the discounted amount at the inception of the loan.

Over the period of the loan, the borrower will be shown as having paid interest of RM 24,184 which will equal the discount.

Thus the books of both companies will be recorded as if interest had been paid as shown in the table.

Since these are book entries and there are no costs incurred or income earned, they have no tax consequence.

This reflects the economic substance of the loan transaction as distinct from the strict legal substance, the mainstay for tax.

This fundamental difference in concept tends to make attempts at convergence between the accounting and tax treatments particularly problematic.

The more pressing issue is doing away with the taxing of imputed interest on non-business lending between relatives, a measure which seems unjustified.

Kang Beng Hoe is an executive director of TAXAND MALAYSIA Sdn Bhd, a member firm of TAXAND, the first global organisation of independent tax firms. The views expressed do not necessarily represent those of the firm. Readers should seek specific professional advice before acting on the views. Beng Hoe can be contacted at

Learn more about Malaysian new Assembly Act

Previously, everything was prohibited unless permitted. Now everything is permitted unless prohibited. This is a significant shift in civil rights thinking.

IN early legal systems, the primary end of the law was to keep the peace. In modern legal orders, a just balance between the might of the state and the rights of the citizens is attempted. No field better exemplifies the difficulty of achieving this fair balance than Malaysia’s law relating to assembly and procession.

The recently enacted Peaceful Assembly Act 2012 has received much criticism in the media and deserves scrutiny of its high and low points.

Police permit: Previously under Sections 27 of the Police Act, citizens had to apply for a police permit for gatherings or processions of more than three people.

Under the new Act, there is no requirement for a police permit, but organisers of assemblies must notify the authorities 10 days in advance under Section 9(1). No notice is required for meetings in designated places or if the assembly is an exempted assembly.

If in response to a notification the police do nothing, then under Section 14(2) silence is deemed as consent.

Previously, everything was prohibited unless permitted. Now everything is permitted unless prohibited. This is a significant shift in civil rights thinking.

No power to ban: Under the Police Act, assemblies and processions could be prohibited outright or conditions imposed.

The new Act in Section 15 permits the OCPD to impose significant restrictions and conditions including the date, time and place of the assembly. However, there is no power to issue an outright “No” before the assembly takes place.

Time limits: Just as citizens are required to give advance notification of 10 days, the police response must also be communicated within a stated time limit of five days: Section 14(1). An appeal to the Home Minis­ter must be decided within 48 hours: Section 16(2).

Designated places: The Act permits the minister to designate places where assemblies may be held without notification to the police. Critics have charged that this is an attempt to isolate Opposition gatherings in distant and low-impact places.

This is an overly cynical view. Actually it is a good idea to designate some fields, stadiums and Speakers’ Corners for public assemblies.

What would be improper is if the owners of designated places indulged in the selective granting or refusal of permission. If this happens, judicial review is likely on the (Article 8) principle of equality or the administrative law principles of reasonableness, irrationality or abuse of power.

Exempted assemblies: This Act does not apply to election campaigns, strikes, lock-outs and pickets under the Industrial Relations Act and the Trade Union Act: Section 1(3).

It is also inapplicable to religious assemblies, funeral processions, weddings, open houses, family get-togethers, family days and meetings of societies or associations: Third Schedule Paragraph 9(2)(b).

The words “meetings of societies and associations” are very broad and permit vast possibilities.
Right to object: All persons likely to be affected by a proposed assembly have a right to be informed and to raise objections. In principle this is acceptable.

However, there is a perception that the police may pander to extremist groups; subordinate minority rights to majority concerns, and discourage lawful but unpopular assemblies. This perception needs to be proved wrong.

Judicial review: Mercifully, the Act has no ouster clauses for excluding judicial review.

Counter-assemblies: The Act takes admirable note of counter- and simultaneous assemblies, and seeks to regulate them by giving preference to the assembly first in place. It also provides for alternative sites, times and dates for the counter- or simultaneous assembly or assemblies.

Spontaneous gatherings: These are not contemplated by the law and are presumably not illegal.

Involuntary presence: The definition of “participant” leaves out anyone who is unintentionally or involuntarily present at an assembly. This will be a useful defence to a citizen who is the subject of a prosecution.

Despite the above wholesome features, the reformed law still bristles with some controversial provisions.
Street protests: These are a form of assembly in motion, a procession or a demonstration. They were permitted (within limits) subject to regulation under Section 27 of the Police Act, but are now absolutely banned.

Other ambiguous aspects of the law are that a street protest by definition involves “walking in a mass march or rally.” So if there is no walking but a motorcade of cars or bikes, that will not be caught by this law and the authorities may have to use Section 268 of the Penal Code or some provision in the Road Traffic Act 1987.

Further, although “street protests” are banned, the Act refers here and there to “processions” and “assemblies in motion.” One has to struggle to understand the distinction bet­ween a lawful procession and an unlawful street protest.

Police discretion: Under the Police Act, police discretion to grant or withhold a permit was more or less unfettered and the power to impose conditions was very wide, although subject to occasional judicial review as in Chai Choon Hon v Ketua Polis Kampar (1986) and Patto v CPO Perak (1986).

Similar to the Police Act, the new law in Section 15 still confers on the men in blue very wide discretion to impose “restrictions and conditions,” arrest without a warrant any person failing to comply with a restriction or condition, or order the assembly to disperse.

It must be acknowledged, however, that such wide discretion is known in other jurisdictions like Britain, Finland and the state of Queensland in Australia, but subject to external review.

External control: Unlike the recent Security Offences (Special Measures) Act which subjected the powers of the police and the Minister to judicial control, this Act makes no effort to subject police discretion to external, non-executive control.

An appeal lies with the minister, which basically means there is an appeal from the executive to the executive.

Fortunately, however, there is no ouster clause, and judicial review on the first principles of administrative law is a possibility.

Public places: These are defined too broadly, so they include private places open to or used by the public by the express or implied consent of the owner or on payment of money. This means that private premises, hotels and halls to which members of the public are invited or permitted are deemed public places!

Constitutionality: It remains to be seen whether the courts will review the constitutionality of some parts of this law. Issues germane for discussion are:

> The total ban of street protests without linking it to public order and national security may well fall foul of Article 10(2).

> The ban on people under 21 organising an assembly may be challenged as a violation of Article 10 (free speech) and Article 8 (equality). It is noteworthy that case law has established that parliamentary res­tric­tions on human rights must be reasonable by objective standards (Hilman Idham).

> One of the grounds on which the police may exercise the power to regulate assemblies is “the protection of the rights and freedom of other persons” (sections 2, 3 and 15). These words of limitation do not occur in Article 10(2), and may therefore be seen as an extra constitutional limitation.

In most countries including the US and Malaysia, courts have accepted implied limits on human freedoms and have often carved out common law restrictions on fundamental freedoms.

In sum, the Act has many wholesome features. But it is defective in that it imposes no objective restraints on the police and ministerial discretion.

Nevertheless, as judicial review is not excluded, courts may provide a proper balance between police powers and fundamental freedoms. Whether the courts will play such a balancing role remains to be seen.


> Shad Saleem Faruqi is Emeritus Professor of Law at UiTM.

Ethics vital for lawyers! Force to sign documents & hit client?

I REFER to the YouTube clip ( showing a lawyer forcing a client to sign documents without reading the contents, shouting at the client, shoving him and kicking him. (See below: Lawyer who hit client claims self-defence)

Any person who encounters poor legal services or suffers detriment has the right to seek remedy.

In Malaysia, action against lawyers lies in the hands of the Disciplinary Board set up under the Legal Profession Act 1976. The Disciplinary Board is independent of the Bar Council, consists of senior lawyers, and is chaired by a judge of the Court of Appeal. It deals with all complaints against lawyers.

The Bar Council is only empowered to deal with cases of misconduct involving dishonesty, which includes cases of cheating and the misappropriation of funds. If the Bar Council receives a complaint involving dishonesty, it can apply for a court injunction to stop the lawyer concerned from practising pending investigations into his case, or apply to the Disciplinary Board for an order of suspension pending such investigations. The Bar Council will also lodge a police report in respect of the complaint if the complainant has not already done so.

The Bar Council regulates the legal profession in this country and it can deny any application to join the profession – based on the “good character” requirement. The meaning of “good character” can be a little bit hazy, but it’s been described as having a strong moral fibre, a belief the law must be upheld, and an appreciation of the difference between right and wrong.

As a regulating body, the Bar Council polices the conduct of lawyers, and disciplines members not only for unethical actions, but also rude or overly aggressive behaviour. Anyone found guilty of professional misconduct shall face suspension.

At university, legal ethics should be viewed as a major subject, to provide students with a thorough grounding of the proper spirit in which lawyers should practise. Honesty should be a crucial part of a lawyer’s education. By the time students begin pupillage, they should already have a good grasp of what makes a good lawyer. This should include knowledge on how to handle clients’ money ethically and the manner in which they are to deal with other lawyers and the courts. Such education should imbue a correct and broad mindset in students and guide them during their pupillage, as they begin to apply the legal knowledge they have acquired in theory to real-life cases.

A word to all legal professionals in Malaysia: respect your clients, the profession, the country and the public interest. Law is an imperfect profession in which success can rarely be achieved without some sacrifice of principle. But we can strive to make it a notable profession that people can respect in this country.

Law lecturer, Ipoh

Lawyer who hit client claims self-defence

PETALING JAYA: A video clip of a house buyer being pushed and kicked by a lawyer has gone viral but the purported attacker says he did it in self-defence after being provoked.

Lawyer Tan Hui Chuan, who was a Selayang municipal councillor until recently, said the house buyer had uttered “hurtful and disrespectful words”.

“I just wanted him to get away from me because he was provoking me, so I pushed him. But I did not punch, scratch or slap him. Yes, I kicked him. But I did not kick to injure him. It was a soft kick,'' he said when contacted yesterday.

The nine-minute video clip shows two men arguing in the presence of three others in an empty house. At one point, one of the men, who is apparently infuriated, pushes the other man and kicks him once. He shoves him several times later.

Gone viral: A still from the video grab purportedly showing the attack.
The footage, recorded by a woman who came with the house buyer, was posted on YouTube on June 21, two days after the alleged incident.

The house buyer claimed he was upset that the lawyer “forced” him to sign some documents without giving him time to verify them first.

However, the lawyer said he merely asked his client to sign the acknowledgment of receipt of several documents that had been tendered to the bank.

“It was neither an agreement nor a contract as all transactions had been completed a week earlier. The client has already taken possession of the property,'' he said.

Tan said his client went to his firm several days later and signed the acknowledgement of receipt.
“And the video was released after that,'' he said.

The lawyer felt that the house buyer had tarnished his reputation by releasing the video.

Bar Council president Lim Chee Wee said victims of physical assault could sue for damages, adding that the house buyer could lodge a police report as well.

“No amount of provocation should attract (any form of) physical assault,'' he said.

He also said that in cases of misconduct involving lawyers, the people could lodge a complaint with the council's disciplinary board.

Theng Book offers to mediate

The Star June 10 2012

PETALING JAYA: Selangor MCA Public Services and Complaints Department chief Datuk Theng Book has offered to mediate in the controversy involving a lawyer who is alleged to have assaulted a housebuyer.

He, however, urged lawyer Tan Hui Chuan to apologise to Neo Kian Hua within a week.

“Failing which, Neo can take the necessary action if he wants to,’’ Theng Book told a press conference at the Selangor MCA office here yesterday in the presence of Neo.

The alleged assault happened on June 19 after Tan summoned Neo to the house he had purchased to sign some documents.

A video clip showing an enraged Tan pushing and kicking Neo posted on YouTube went viral.

Tan, who was a Selayang municipal councillor until recently, had clarified that Neo had uttered “hurtful and disrespectful words” and that he had acted after being provoked.

The lawyer also claimed that he had merely asked Neo to sign to acknowledge the receipt of several documents that had been tendered to the bank.

Neo, a 32-year-old IT consultant, said yesterday that he had never met Tan prior to the incident as he had only dealt with his assistant.

“I also felt strange as to why he was calling for a meeting at the house and not his office,’’ said Neo, who added that he decided to get his girlfriend who accompanied him to the meeting to record it.

Neo claimed that Tan lost his cool after he (Neo) began reading through the documents before signing them.

“As I continued to read the documents, Tan grabbed them from me and told me to go to his office to do the signing,’’ he further claimed.

Theng Book advised all housebuyers and vendors to appoint their own lawyers to protect their interests.

“Banks should not recommend lawyers to vendors and buyers,’’ he said.

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Tuesday, June 26, 2012

Lawyer to stand trial to settle RM3.9mil claim against land owners

Court strikes out Manoharan’s application for time extension

PUTRAJAYA: Lawyer M. Manoharan has been ordered by the Court of Appeal here to stand trial over his RM3.9mil claim in legal and consultation fees for allegedly acting for two landowners.

The panel of judges unanimously striked out Manoharan’s application for an extension of time to appeal against an earlier Kuala Lumpur High Court decision to set aside a judgment-in-default (JID) awarding him the RM3.9mil.

Ordering Manoharan to pay RM15,000 in costs, the three-man panel, led by Justice Hishammudin Mohd Yunus, also fixed Sept 20 to 21 for a full trial at the Kuala Lumpur High Court.

Also on the panel were Justices Anantham Kasinather and Lim Yee Lan.

Manoharan had filed the appeal against the High Court’s decision on May 17. However, the deadline for appeal was April 9.

In applying for an extension of time, he had claimed that he had been delayed in filing due to his case load, adding that he had put his clients’ interests above his own.

However, lawyer Mansheel Kaur, who represented the landowners, argued that “lawyers should not say that they were simply too busy to file their own appeal”.

In his lawsuit filed on Dec 22 last year, Manoharan had said that he was appointed by the landowners to advise them on land deals. He subsequently obtained the default judgment from the High Court against the two landowners.

However, the landowners – medical centre Imran ENT Specialist Sdn Bhd and its director Aminah Sirajudin – succeeded in their application to set aside the judgment on March 9.


Related post:

China advises ASEAN to be independent

Don't be bystanders or tools of major powers, says Beijing

China has urged members of the Association of Southeast Asian Nations not to be a bystander or "a tool of major powers" to cope with the new challenges in the current global political and economic atmosphere.

"ASEAN should exercise its independent judgment to move this region forward. If ASEAN takes sides, it would lose its relevance," Vice-Minister of Foreign Affairs Fu Ying told The Nation in an exclusive interview over the weekend.

"ASEAN has an important role to play with its tried-and-true ASEAN Way, as major powers are shaping their new relations in the region."

She said relations with ASEAN countries are of "unquestionable priority" for China. China will continue to support ASEAN's "centrality" in East Asian cooperation, she said.

Fu was in Bangkok over the weekend to meet Thailand's Foreign Affairs Permanent Secretary Sihasak Phuangketkeow. In July, Thailand is to take over the role of ASEAN's coordinator with China for the next three years.

Since the dialogue partnership was established in the early 1990s, ASEAN-China relations have enjoyed robust development, she said.

"We have also encountered a lot of challenges. Yet, rather than hurting our relations, these challenges were turned into opportunities to reinforce our relations," she said.

Asked about the United States' decision to "rebalance" its forces in Asia and the Pacific, Fu said: "China has no problem accepting the US presence and its positive influence in the Asia Pacific. We welcome a constructive US role in regional affairs."

She noted, however, that there is growing concern from media and academics in China over the heavy US emphasis on security in the region.

"I've noticed that the same concern has also been heard in other Asian countries. Some say China is the 'elephant in the room'. Some others worry about a possible return to the Cold War," she said.

"As I see it, maybe it's still too early to draw conclusions."

Asked whether Beijing is concerned about Washington's possible "containment policy" against China, she said: "The US has loudly denied any intention to contain China. We will just take them at their word."

She said she did not believe any country could "contain" another country in the current global environment.

"How can anyone contain 1.3 billion people of China from building better lives for themselves?" she asked.

Fu said China's industrialization is "only halfway" complete. Its huge population means that China's per capita GDP would remain low for a long time to come.

"We are still a developing country working hard to address the imbalances and the uncoordinated and unsustainable aspects of the economy," she said.

Regarding the South China Sea disputes, the vice-minister reiterated that China wants to handle the disputes peacefully through direct negotiations between countries concerned.

"At the same time, we must protect China's sovereignty and maritime rights and interests. We remain committed to working with countries concerned to reach a farsighted and wise solution," she added.

China and ASEAN countries signed the Declaration of Conduct of Parties in the South China Sea in 2002. Central to the DOC is a commitment by all parties to "exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability".

The vice-minister said China and ASEAN are also involved in ongoing discussions on the formulation of a Code of Conduct. "This shows that safeguarding stability in the region and managing disputes appropriately remains the mainstream thinking in our region."

She added: "We sincerely hope that China and ASEAN countries will keep a cool head on this issue and exercise restraint through action, and that all parties will refrain from undermining the atmosphere for peace and stability in the region."

She pointed out that more than 80 percent of China's trade goes through the sea lanes in South China Sea.

"Safety of the navigation routes is of utmost importance for China. We will do all we can to ensure peace in this part of the world," Fu said.

By Suthichai Yoon  (China Daily)  
Suthichai Yoon is editor-in-chief of The Nation Group in Bangkok
The Star/Asia News Network

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