31 July 2016
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Swiber's move to wind up sends shock waves through market

Business Times
29 Jul 2016
Tan Hwee Hwee

Announcement stuns investors and analysts; news savages some O&M counters; DBS among banks with heavy exposure. Firm announces resignation of 3 exec directors

[Singapore] SWIBER Holdings sent shock waves through the offshore marine, banking and stock markets on Thursday after it applied to the courts to be wound up.

The move battered the share prices of several O&M counters and sent analysts scurrying to update their reports on companies in the sector. Among banks, DBS appears to bear the heaviest burden with an exposure of S$700 million to the Swiber group.

In addition to DBS, the major creditor banks to Swiber are Bank of America-Merrill Lynch, Citibank and Deutsche Bank. Citi said that its exposure was minimal and manageable. UOB also said that its exposure was manageable.

Swiber announced past Wednesday midnight that it had made the winding-up application on the afternoon of July 27 and a hearing has been fixed for Aug 19.

In addition, the listed offshore and marine group said that it has applied to be placed in provisional liquidation and the High Court of Singapore has appointed Cameron Lindsay Duncan and Muk Siew Peng, care of KordaMentha Pte Ltd, as the joint provisional liquidators.

In a separate SGX filing on July 28, Swiber announced the resignations of Francis Wong as executive director and vice-chairman, Leonard Tay as executive director and group chief financial officer, and Nitish Gupta as executive director.

BT understands that Mr Wong and Mr Gupta, together with Swiber group chairman Raymond Goh and chief executive Darren Yeo, are commonly regarded as the pioneers of the listed company.

The petition took analysts off guard.

As with almost all O&M-focused entities, the company had been going through a very rough patch amid a dramatic slowdown in contracting activity following a collapse in oil prices.

One analyst told The Business Times that the expectation was that banks would keep Swiber afloat as they fear pulling the plug could trigger a crisis in Singapore's O&M sector.

Already, a DBS Group Research note on Thursday has warned about the danger of "a domino effect on Singapore O&G players" and "knee-jerk selling pressures".

The writing is clearly on the wall that cash was running tight at the highly-geared company. One concerned shareholder noted that the company's announced letters of demand for trade claims had ballooned to US$15.2 million from US$4.76 million within weeks from its first disclosure on the matter on July 8 and its response to SGX's July 21 query. Swiber announced on July 28 before unveiling the winding-up petition that it was facing letters of demand totalling about US$25.9 million as at July 26.

The company had just scraped through two bond deadlines: a S$75 million medium term note which fell due on July 6 and a S$130 million MTN due on June 6.

Despite three adverse disclosures by the company on July 8 and July 11 that prompted the SGX queries, they did not give an indication that it was headed towards a winding-up.

SGX on July 21 publicly queried Swiber on the company's three disclosures as well as a BT report.

In response to queries pertaining to the BT report flagging uncertainty over the timely delivery of newbuild vessel Kaizen 4000 towards a contract off Vietnam, the company claimed that it was still "disputing" the client's unilateral termination of the said contract.

SGX had also queried Swiber on the delay in a US$200 million preference share subscription in the company's wholly-owned subsidiary, Swiber Investments Ltd, and the deferment of a US$710 million field development project off West Africa.

The deferment of the US$710 million contract is believed to be a major contributing factor to Swiber's cash flow problems. One analyst wondered if the major bank creditors behind Swiber may have found it challenging to justify extending new loans to the O&M player after the US$710 million project was deferred indefinitely. This was not least because in December 2014 when the project was first announced, it was said to account for about 70 per cent of Swiber's then outstanding order book.

Swiber had maintained in its SGX disclosures that the project was delayed due to "weakness in the oil and gas sector". It did not specify when the project would be executed or elaborate on the reason behind the delay. The lack of details and tardy response drew the ire of some investors, who called BT to air their misgivings.

To date, Swiber has not identified the client nor name the project behind the US$710 million award first announced in December 2014. The project was due to be executed from the first quarter of 2015 through to the middle of 2017, but it was only this July that the company disclosed that it was deferred.

Mike Meade, managing director of brokerage M3 Marine, noted that O&M contract disclosures on the Singapore bourse are generally missing information on the client, the value and other details that would have gone into any filings on such business transactions on the New York Stock Exchange.

He sees no significant purpose for stock exchange filings on contract awards without the critical details beyond generating investor interest in a listed O&M company.

Robson Lee, partner of Gibson Dunn & Crutcher LLP, argued: "The public disquiet that has arisen concerning Swiber is not with respect to the announced winding-up petition. Rather, it would appear that the company has not been timely and complete in its public disclosures on significant developments that have a material impact on its business and financial positions since early July 2016."

Mr Lee also said that from what he observed of the news reports and SGX queries, there could be "a contravention of the continuous disclosure listing rules of the SGX" and that this could be "a criminal offence if the breach is intentional or reckless".

NUS professor Mak Yuen Teen said that he would not be surprised if the Monetary Authority of Singapore and the Commercial Affairs Department get involved in an investigation of possible breaches of the Securities and Futures Act with regard to the failure to make continuous disclosure and/or false or misleading disclosures.

Prof Mak also expects the regulators (including SGX) to look at whether there was unusual trading and possible insider trading of shares, given the consistent tardiness in Swiber's disclosures.

SGX chief regulatory officer Tan Boon Gin said that any breaches of listing rules by the company can result in actions which might include monetary penalties though the relevance of this depends on the financial situation of the company.

As for individual directors or executive officers, possible actions if they are found to have breached the rules range from public reprimands to prohibition against their appointment as directors and/or executive officers of any issuer for a period not exceeding three years.

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

Liew Kai Lung Karl v Ching Chiat Kwong - [2016] SGHC 98

Road Traffic Act - Road Traffic (Taxi Service Operator Licence) (Amendment) Rules 2016 (S 183 of 2016)

Shareholders and bondholders on the losing end: Swiber liquidation

Straits Times
29 Jul 2016
Jacqueline Woo

Shareholders and bondholders of Swiber Holdings could be left out in the cold, with the offshore services firm being wound up and liquidated, said market watchers.

Corporate lawyer Robson Lee, a partner at Gibson Dunn, said that when a Singapore firm is wound up, secured creditors are not subject to the order of priority prescribed under the Singapore Companies Act, which places liquidators and employees high up in the list.

"If there are specific assets of the company that are legally secured for purposes of repaying bondholders, the trustee for the bondholders can proceed to realise the security (to repay) the bondholders.

"But if the bondholders are unsecured, they would have to queue in line like all other creditors."

He added that "any residual assets" will then be distributed proportionally to shareholders.

Swiber's winding-up bid means its outstanding bonds would represent the latest default to hit the bond market here, after Trikomsel and Pacific Andes Resources Development failed to make payments on three notes worth $415 million in the past few months.

An iFast Corporation report noted yesterday: "While we are not experts at appraising Swiber's liquidation value, the firm's fleet of vessels (possibly the most liquid assets of sizeable value) are likely to go towards repayment of bank borrowings (secured by vessels and equipment), which unfortunately could leave very little for unsecured bondholders to lay claim to."

Shareholders may also not be able to recoup their investment.

But Ms Jenny Tan, who works in the financial service sector, was lucky enough to have sold all of her shares in Swiber Holdings earlier this year, even though it was at a loss.

"I just saw an opportunity to exit the sector," said Ms Tan, 27, referring to the offshore and marine sector, which has been languishing amid low oil prices. "But I was shocked to see the news about Swiber. I thought they would hang in there longer - Singapore-listed companies don't just default and wind up suddenly."


I was shocked to see the news about Swiber. I thought they would hang in there longer - Singapore-listed companies don't just default and wind up suddenly.

MS JENNY TAN, who works in the financial service sector. She sold, at a loss, all of her shares in Swiber Holdings earlier this year.

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

Phang Choo Ong v Gilcom Investment Pte Ltd (LRG Investments Pte Ltd and another, non-parties) - [2016] SGHC 97

Building and Construction Authority Act – Building and Construction Authority (Importers’ Licensing) (Amendment) Regulations 2016 (S 182 of 2016)

Ensure town councils are run properly

Straits Times
29 Jul 2016

Even established organisations slip up occasionally, as is evident when issues are raised from time to time by consumers, investors, regulators or the Auditor-General. But when "systemic difficulties" are identified by independent auditors, as was the case when KPMG reviewed the books of the Workers' Party-run Aljunied-Hougang Town Council (AHTC), these call for an overhaul, not just targeted remedies. KPMG found "pervasive control failures" in the town council's accounts and work processes. The weaknesses it identified cover key areas of governance, financial control, financial reporting, procurement and records management. Despite the significance of these, the town council had in past years shrugged off similar criticism as "old issues" and made little progress in addressing the problems.

The question that arises is how far the law should go to compel town councils to implement a management regime that emphasises competence and accountability. A review of the Town Councils Act, which is now being undertaken, has to weigh this against the primary intent of granting elected Members of Parliament sufficient autonomy to work with residents to make a difference in HDB estates within their constituencies. Making a distinction between isolated lapses and systemic deficiencies might be useful in order to avoid tying up town councils with excessive red tape. Nor should the rules be so arduous that councils in effect become a division of a government agency and smaller parties that lack experience and support find they are doomed to fail.

Many would agree, however, that baseline standards are necessary to ensure citizens' needs are met and public funds are safeguarded, without having to hold councils to account in an agonising manner. Town councils should not be allowed to go entirely their own way with little regard for acceptable standards. After all, councils lie at the heart of a grassroots administrative process that feeds into the larger national objective of clean and efficient governance. Whichever the political party running a council, functional capability must constitute the basis of legitimacy in Singapore.

Amendments to the Town Councils Act should focus on shortcomings in existing legislation that permit a council to drag its feet despite forthright comments from independent sources, including the courts. If key requirements are spelt out, town councils of all political stripes will have less scope to turn issues of competence, governance and effectiveness into political disputes, with residents' interests caught up in seemingly interminable partisan wrangling.

While granting town councils sufficient leeway, it must be made clear they are ultimately subordinate to the authority of public law, like companies and charities operating in different contexts.

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

TNC v TND - [2016] SGHCF 09

Air Navigation Act - Air Navigation (Amendment) Order 2016 (S 181 of 2016)

'No money available' to refund gym members

Straits Times
29 Jul 2016
Goh Yan Han

Members of troubled gym chain California Fitness yesterday received letters telling them there is currently no money available to refund them following the closure of its branches here.

Ferrier Hodgson, the liquidators for the chain's parent company J.V. Fitness, also sent them a proof of debt form to file their claims and is planning to sell off the gym's assets.

California Fitness closed down its Raffles Place branch on July 16, followed by its Novena and Bugis outlets on July 20, leaving members high and dry after having paid thousands upfront in membership fees.

Mr Tim Reid, a partner at Ferrier Hodgson, confirmed that there are no funds available for refunds and said that the firm is sending e-mails to the gym's 23,000 members.

Mr Reid also said J.V. Fitness has no secured creditors. However, among the unsecured creditors, there are preferential ones such as the gym's employees and the Inland Revenue Authority of Singapore.

The gym's members form a "very big proportion" of the unsecured creditors and the amount owed is a "very big number", said Mr Reid.

Ferrier Hodgson placed an advertisement in The Business Times on Wednesday stating that the liquidators are seeking expressions of interest from those who wish to purchase the gyms as turnkey operators.

The advert mentioned only the Raffles Place and Bugis outlets, and listed facilities and equipment such as free weights, exercise machines, studios, steam rooms and saunas.

Mr Reid said: "We have not reached an agreement with the Novena landlords at present."

Registrations of interest must be lodged with the liquidators by Aug 3. A High Court hearing is set for Aug 12 where the provisional liquidators will report their findings to the High Court and the creditors upon completing their assessment.

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

TIT v TIU and another appeal - [2016] SGHCF 08

Constitution of the Republic of Singapore - Public Service (Special and Senior Personnel Boards) (Amendment No. 2) Order 2016 (S 180 of 2016)

Ex-HR exec jailed for cheating employer of $1.2m

Straits Times
29 Jul 2016
Elena Chong

A former human resource executive who falsified payment instructions to get her company to transfer large sums to her was jailed for six years and nine months yesterday.

Jaslyn Chen Xiaohong, 27, had admitted to six counts of cheating and two of forgery, with 21 other charges, including theft and computer misuse, taken into consideration.

The offences involved about $1.2 million, of which $271,585 has been recovered.

One of her responsibilities at GMC Global was to manage the payroll of her employer and its related companies, including its subsidiary, GMG Investments.

Every month, she had to prepare a payment instruction letter to United Overseas Bank (UOB).

These letters contained a list of employees and their salaries for the month. UOB would debit GMG's bank account and credit the stated salaries into the employees' bank accounts.

In April 2014, she started using the payment instruction letters to cause large payments to be made into her bank account.

Deputy Public Prosecutor (DPP) Eugene Sng said Chen has stated that she did this as she had not received a salary increment.

She was not entitled to these large payments as her $2,900-a-month salary was managed through a separate system.

She would include "Chen Xiaohong" as a payee on the payment instruction letter, with a salary she was not entitled to, and her bank account details.

She would then place the letters before GMG's authorised signatories to get their signatures.

She did not use her full name to avoid detection.

In addition to getting the signature of one of the authorised signatories, she would dishonestly sign the instruction letter as the other authorised signatory.

Her offences came to light in December last year and her services were terminated. She had used the money for personal expenses.

Her lawyer said in mitigation that her 63-year-old father is undergoing treatment for colon cancer.

She could have been jailed for up to 10 years and fined for each charge of cheating and forgery.

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

TNK v TNL - [2016] SGHCF 07

Constitution of the Republic of Singapore - Public Service (Personnel Boards and Appeals Board) (Amendment) Regulations 2016 (S 179 of 2016)

Aesthetic doctor gets 3-1/2 years' jail for molesting male patient

Straits Times
29 Jul 2016
Elena Chong

He committed offences over two days while victim was sedated during liposuction procedures

While performing liposuction procedures over two days on a male patient whom he had sedated, an aesthetic doctor molested his victim.

Tan Kok Leong touched the private parts of his 33-year-old patient - a Malaysian doctor - on multiple occasions over the course of two nights in a hotel room.

The 50-year-old also took more than 20 photographs which grossly invaded his victim's privacy.

Tan, convicted last month of drugging the doctor and molesting him, was sentenced to 3-1/2 years' jail yesterday. He is out on $40,000 bail pending his appeal against the conviction and sentence.

He was found guilty after an 18-day trial of molesting the doctor after twice administering Dormicum and Rosiden to the victim in the course of liposuction procedures at Oasia Hotel, Sinaran Drive, on July 5 and 6, 2013.

The prosecution is appealing against Tan's acquittal of molesting the same victim on June 6 that year at the Life Source Medical Centre in Novena Medical Centre, where Tan was a partner. Life Source Medical Centre has since closed.

Tan, who has been in practice for more than 25 years, claimed in his defence that the acts were committed for clinical purposes. He also said the patient had given his consent for him to carry out the acts in question. But District Judge Siva Shanmugam found that the defence of consent was not made out.

Deputy Public Prosecutor Alan Loh and Assistant Public Prosecutor Thiagesh Sukumaran had sought a deterrent sentence of at least five years and eight months.

DPP Loh said the doctor-patient relationship induced the victim to trust Tan totally, and to believe that Tan was administering Dormicum for pain relief. The victim, who cannot be named due to a gag order to protect his identity, had also regarded Tan as a mentor.

The DPP said Tan had abused his relationship with the victim and his deplorable conduct has brought shame to the medical profession.

Of the more than 20 photographs that Tan took, two were full-length ones that showed the unconscious victim wearing only a T-shirt.

It was fortunate, said DPP Loh, that Dr Gerald Tan, then Tan's partner at Life Source, discovered the photographs and informed the victim, who subsequently lodged a police report. The photos were also found in Tan's mobile phone.

The judge said the offences were premeditated, and the victim was vulnerable and defenceless as a result of being sedated.

He said Tan had not shown any remorse, while the victim had stated that he suffered financially and psychologically as a result of the incident. The stress from the ensuing proceedings took a toll on his relationship with his fiancee.

Tan also appeared to have had scant regard for the victim's safety and well-being by sedating him in a hotel room, outside of a hospital environment, the judge said.

In mitigation, Tan's lawyer Edmond Pereira said his client is a renowned aesthetic doctor here and in other countries. Before his conviction, Tan, who is single, travelled frequently to conduct workshops, seminars and lectures, as well as to see to some of his patients. He was also active in charity work.

Tan could have been jailed for up to two years and fined for outrage of modesty. For administering stupefying drugs, the maximum sentence is 10 years' jail and caning.

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

The “Xin Chang Shu” - [2016] SGHC 93

Sup Ct PD Amendment No. 3 of 2016 - Adjournment or vacation of hearings other than trials; skeletal arguments for appeals

Supreme Court

AXA 'breached duty of care' to former employee

Straits Times
28 Jul 2016
Grace Leong

Appeal Court partly overturns judgment in defamation suit over job references provided

AXA Life Insurance "breached the duty of care" to a former employee who claimed references from the insurer cost him a $2.2 million remuneration package with Prudential, the Court of Appeal ruled yesterday.

Mr Ramesh Krishnan, 45, had accused AXA of defaming him when providing references on his work performance. He lost the defamation suit in the lower court last year but that judgment was partly overturned yesterday.

Mr Ramesh said AXA's reference would lead an ordinary person to infer that he had been incompetent.

He said the reference cost him potential remuneration from two prospective employers - a $2.2 million package with Prudential and a $20,000 sign-on fee with Tokio Marine.

AXA had told the two firms of the "persistency" rates of policies sold by financial advisers under Mr Ramesh's supervision. Persistency rates refer to how long the plans were still in force after a given period.

High Court Judicial Commissioner George Wei ruled last year that AXA did not breach the duty to take reasonable care when responding to Prudential, Tokio Marine and the Monetary Authority of Singapore (MAS) because the accuracy of AXA's calculations of the persistency ratios were "supported by evidence and remained largely unchallenged" by Mr Ramesh.

But the Appeal Court held that Mr Ramesh succeeded in his claim of negligence against AXA in respect of his application to join Prudential but not his application to join Tokio Marine.

"We find, on the facts, that (AXA) breached the duty of care which it owed (Mr Ramesh) in providing the information set out in the reference check form to Prudential as well as in its subsequent correspondence with Prudential and MAS, and this caused Prudential not to employ him," wrote Chief Justice Sundaresh Menon, who delivered the judgment yesterday.

"We do not go so far as to say that an employer is required to guarantee the accuracy or truth of a reference. What is required is the exercise of reasonable care in the preparation of the reference so as to meet the foregoing requirements of truth, accuracy and fairness."

Although the information provided in the reference check form was factually true, a substantial part was incomplete, misleading and unfair to Mr Ramesh, it found.

Further, it found that AXA had unfairly withheld information that was relevant to clarify other information that it had earlier included in the reference check form, despite Prudential's requests for the further information.

The matter has been referred to the High Court for an assessment of the damages.

The Court of Appeal awarded Mr Ramesh the costs of the appeal, and of the trial in respect of only the negligence claim pertaining to his application to join Prudential, but not the negligence claim pertaining to his application to join Tokio Marine, nor the defamation and the malicious falsehood claims.

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

Asplenium Land Pte Ltd v CKR Contract Services Pte Ltd - [2016] SGHC 85

Law Soc: Amendments to the guidelines on the review of post-grant patent amendments

Law Society

Certain documents mentioned in this notice are accessible only by Law Society Members with their user ID and password via The Law Society of Singapore website.

Intellectual Property Office of Singapore (‘IPOS’)
Amendments to the guidelines on the review of post-grant patent amendments

Intellectual Property Office of Singapore ('IPOS') would like to update members on the amendments to the guidelines on the review of the Post-Grant Patent Amendments.

Under current practice, post-grant amendments are allowed if the amendments:

  1. do not introduce additional matter; and
  2. do not extend the scope of protection.

However, in the decision of Ship's Equipment Centre Bremen GmbH v Fuji Trading (Singapore) Pty Ltd & Ors [2015] SGHC 159, the Singapore High Court affirmed the guidelines for allowance of post-grant amendments set down in the UK Court. The UK guidelines are of a higher bar than IPOS' current practice, imposing the following additional requirements:

  1. Disclosure of all relevant matters.
  2. No unreasonable delay in seeking amendments.
  3. No unfair advantage obtained by delaying amendments which are known to be needed.

The guidelines were applied again in a more recent decision of Warner-Lambert Company LLC v Novartis (Singapore) Pte Ltd [2016] SGHC 106 by JC George Wei.

IPOS has aligned its practice for assessing post-grant amendments in accordance with the guidelines affirmed by the Singapore High Court.

A circular on the revised practice was released on 30 June 2016. Upon release, the updated practice will apply to all pending and new requests for post-grant amendments. An updated version of IPOS' examination guidelines will be released at a later date.

Click here to view the full text of the circular.​

New bankruptcy rules kick in from August

Business Times
28 Jul 2016
Jamie Lee

Minimum debt for someone to be made bankrupt raised to S$15,000 from S$10,000

[Singapore] NEW rules under Singapore's bankruptcy framework to create a more "rehabilitative environment" for bankrupts will come into force from August, the Ministry of Law (MinLaw) said on Wednesday.

The minimum debt amount that needs to be owed before a person may be made bankrupt will be increased to S$15,000, from S$10,000. This accounts for inflation since 2000.

Under the new framework, a timeline has been provided such that most first-time bankrupts should be eligible for discharge after five years - once they make, in full, a target contribution to creditors based on the individual's earning potential during the bankruptcy period.

After the seventh year, a first-time bankrupt should be discharged, even if he does not meet the target contribution. Repeat bankrupts will generally be eligible for discharge within 7-9 years.

Before this, no timeline was set for bankrupts and no target contribution was declared to creditors. The change is meant to give bankrupts clear time frames, and the incentive to seek "gainful employment", MinLaw said.

Institutional creditors will also be required to nominate private trustees to administer the bankruptcy estate when applying to make a debtor bankrupt. Such trustees will include accountants and lawyers.

Currently, most bankruptcies in Singapore are administered by the Official Assignee under the government's Insolvency and Public Trustee's Office, and at a low cost.

Much of the public feedback during the public consultation last year focused on the cost of trustees, which could run into hundreds of thousands of dollars for huge debt recovery proceedings. MinLaw said involving a public trustee would result in lower distribution to creditors, but this would ensure all repayment options are exhausted before bankruptcy proceedings are considered.

MinLaw added then that institutional creditors have sufficient expertise and resources to conduct credit assessments before extending credit, and have sufficient resources to bear the costs of debt recovery.

"Government resources and taxpayer dollars should not be used to subsidise the costs for the recovery of such debts," it added then. It said on Wednesday that the new rules are designed to ensure creditors are careful when extending credit.

MinLaw has also made it quicker for creditors to apply for bankruptcy application. After a demand for payment has been issued to a debtor, the creditor will no longer have to wait for a 21-day period to lapse before filing a bankruptcy application.

But the creditor must show a serious possibility that the debtor's property or its value will be "significantly diminished" before 21 days are up.

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

Guay Seng Tiong Nickson v Public Prosecutor - [2016] SGHC 94

Law Soc: Family Justice Courts Practice Directions Amendment No. 1 of 2016

Law Society

Certain documents mentioned in this notice are accessible only by Law Society Members with their user ID and password via The Law Society of Singapore website.

Family Justice Courts
Practice Directions Amendment No. 1 of 2016

The Family Justice Courts ('FJC') has issued Practice Directions Amendment No. 1 of 2016 informing of the following which has come into effect on 1 July 2016:

Setting out the fees payable for applications for copies of documents in Court Proceedings;

Explain that the Court may reject documents that are not in compliance with the Family Justice Rules, the Practice Directions or any other directions made by the Court;

Clarify that where there are multiple plaintiffs, applicants or deputies, a single affidavit instead of multiple affidavits should be filed;

Provides for substituted service applications on a company's alternate address, giving effect to the new Section 173 of the Companies Act (Cap. 50) which allows the company's officers to stipulate an alternate address and sets out the conditions of an alternate address;

Clarify the requirements and undertakings in a Mareva injunction, in line with the practice applicable in the Supreme Court;

Clarifications on the types of cases which are to be transferred to be heard in the Family Division of the High Court;

Setting out instructions on the making of references to page numbers of exhibits in an affidavit and the listing out of related documents in a table of contents;

Amendments of Forms 6, 8, 18, 21, 30, 191, 206, 209 and 242 are due to the new Sections 11A and 69(1A) and amendment to Section 113 of the Women's Charter;

Amendments of Forms 96 to 98 and 229 to replace the forms for Offer to Contribute, List of Documents, Affidavit Verifying List of Documents and Plaintiff's Affidavit for Application under Section 121B of the Women's Charter;

Amendments of Forms 217, 218, 219, 220, 222 and 224 to give effect to minor amendments to the forms that serve to clarify their contents; and

Amendment of Form 243 amends the contents of a Joint Summary of Relevant Information for Ancillary Matters hearings.

Please click here to view the full text of the Amendment

Banks welcome MAS guidelines on cloud computing

Business Times
28 Jul 2016
Amit Roy Choudhury

But MAS warns that institutions are ultimately responsible for maintaining oversight of cloud services and managing the risks of using them

[Singapore] BANKS in Singapore and cloud-computing services providers on Wednesday welcomed the new guidelines on outsourcing risk-management for financial institutions (FIs) issued by the Monetary Authority of Singapore (MAS) earlier in the day.

The guidelines, drawn up from extensive industry and public consultation, provide the industry with expanded guidance on how to manage the risks of outsourcing, including that for cloud-computing services, which are being increasingly adopted by FIs to streamline operations in a digitalised economy.

The key changes to the guidelines include the:

• Introduction of a new section setting out MAS's stance on cloud computing;
• Removal of expectation for FIs to pre-notify MAS of material outsourcing arrangements; and
• Revision to the definition of "material outsourcing arrangement" to include, under certain circumstances, arrangements that involve customer information.

Rohit Joshi, HSBC Singapore's managing director and head of Global Liquidity and Cash Management, said the move towards support of responsible cloud-solutions adoption will "spur more innovation and speed of delivery for corporates, which will ultimately assist them in cost efficiencies and potentially better profit margins".

MAS cautioned, however, that while outsourcing can bring about cost and other benefits, it may increase the risk profile of an institution; it added that in cloud services, banks and other financial companies should beware of "the multi-tenancy, data co-mingling and the higher propensity for processing to be carried out in multiple locations".

"Institutions should take active steps to address the risks associated with data access, confidentiality, integrity, sovereignty, recoverability, regulatory compliance and auditing," the regulator added.

Sandip Gupta, vice-president of Singapore Telecommunications' (Singtel) Cloud Business, said the guidelines give clarity on how the financial-services industry and service providers can work together to encourage the adoption of cloud services.

"We are pleased to contribute to the MAS's guidelines, as we want to help the industry achieve cost-efficiency, agility and foster innovation through the cloud. We hope these guidelines will pave the way for more financial-industry players to adopt best practices for cloud and leverage technology to accelerate their transformation."

Shamus Weiland, Citibank's managing director and EMEA (Europe, the Middle East and Africa) chief information officer for Consumer and Global Product Development, said the enhanced measures on cloud services outsourcing "represent an important step forward for the industry". "We believe that our customers will greatly benefit from the increased adoption of cloud services and the efforts undertaken by our bank to advance the use of this technology," he added.

Standard Chartered Bank Group chief information officer Michael Gorriz said banking is enabled by new digital technologies, from big-data analytics to delivering client services anytime, anywhere. "New cloud technologies and services are giving the financial-services industry more agility to deploy resources quickly, deliver new business solutions, improve customer service and reduce operating costs," he added.

Nick Walton, Asean head of Amazon Web Services (AWS), a major global cloud-computing services provider, noted that the recognition of cloud services as an important driver of innovation and business agility enhances Singapore's standing as a global financial centre and a hub for fintech (financial technology) innovation.

"We are excited to build on our current work with financial institutions across all sizes and the fast-growing fintech companies, in leveraging the scalability and flexibility of cloud services to fuel innovation."

David Gledhill, DBS' head of Technology and Operations, described DBS as an early and active adopter of cloud, "which we view as a game changer".

Sounding a note of caution, MAS said in its guidelines that institutions are ultimately responsible and accountable for maintaining oversight of cloud services and managing the attendant risks of adopting them, "as in any other form of outsourcing arrangements".

A risk-based approach should be taken by institutions to ensure that the level of oversight and controls are commensurate with the materiality of the risks posed by the cloud services, it added.

"An institution should undertake periodic reviews of its outsourcing arrangements to identify new outsourcing risks as they arise. An outsourcing arrangement that was previously not material may subsequently become material from incremental services outsourced to the same service provider or an increase in volume or change in nature of the service outsourced to the service provider.

"Outsourcing risks may also increase when the service provider sub-contracts the service or makes significant changes to its sub-contracting arrangements," MAS noted.

MAS's deputy managing director Ong Chong Tee said the new outsourcing guidelines reflect MAS's continuing efforts to strengthen its guidance to financial institutions in this area. "The revised guidelines build on the existing ones to better capture evolving threats such as offshoring business models and heightened cyber risks," he said.

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

Arnold William v Tanoto Shipyard Pte Ltd and another appeal - [2016] SGHC 89

Sup Ct PD Amendment No. 2 of 2016 - Amendments to Parts XV, XVIII, XX, App A

Supreme Court

Views sought on move to ensure more protection for the vulnerable

Straits Times
28 Jul 2016
Kok Xing Hui

Proposed Bill will allow State to step in where community, family efforts prove ineffective

While cases of abuse of the elderly and Singaporeans with disabilities have remained under 200 a year, the authorities want to put more safeguards in place as this population is expected to grow.

The Government is proposing a Vulnerable Adults Bill and yesterday urged the public to send in their views by Aug 23.

The Bill was first mooted in January last year by then Minister for Social and Family Development Chan Chun Sing, and aims to better protect the elderly as well as adults who are unable to care for themselves against possible abuse and neglect.

Key areas in the Bill include giving the State the right to enter private premises to assess the person's well-being, as well as to temporarily relocate vulnerable adults to safe places such as sheltered homes or adult disability homes.

Currently, the community and government agencies can rely only on moral suasion to enter homes to provide assistance. But if the person is able to make decisions for himself and refuses to be rehomed or to get a court order against the perpetrator, his choice will be respected.

The Ministry of Social and Family Development (MSF) said the Bill will also let the State intervene in high-risk cases, when intervention by the family and community - which the ministry said is the "first line of care" - is not effective. The Bill also proposes to raise the penalties for those who abuse or neglect vulnerable adults by 1.5 times.

Under the Bill, vulnerable adults are those aged above 18 with a physical or mental infirmity who are unable to protect themselves from abuse and neglect. This includes self-neglect, when they cannot perform essential tasks such as eating or treating injuries.

MSF said the proposed law stems from Singapore's ageing population. By 2030, there will be over 900,000 residents aged 65 and above, with some possibly being single or childless.

"The elderly who develop dementia may be unable to care for themselves... Persons with disabilities are also living longer, and more are expected to outlive their parents," said the ministry in its press statement issued yesterday.

It added that senior citizens who are frail and ageing people with disabilities "are especially vulnerable to abuse, neglect and self-neglect".

The Bill will also protect the identities of vulnerable adults.

This means no one can publish information or pictures that identify a vulnerable adult or the location of his temporary safe place without the permission of the director of social welfare.

Anyone who does so - including newspapers, and those who share the information on websites or through e-mail and text messages - are guilty of an offence. They can be fined up to $5,000. The amount doubles on a second conviction.

The draft Bill also provides an expanded list of people who can apply for various types of court orders to protect a vulnerable adult. So if the Bill is passed, family members, social workers and the State can apply for an order to restrain abuse, restrict access to the victim, and require the perpetrator and victim to attend counselling, among other things.

The draft Bill can be found at www.reach.gov.sg/VAA2016

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

Public Prosecutor v Shanmuga Nathan Balakrishnan - [2016] SGHC 95

Law Soc: Rules of Court (Amendment) Rules 2016

Law Society

Certain documents mentioned in this notice are accessible only by Law Society Members with their user ID and password via The Law Society of Singapore website.

Rules of Court (Amendment) Rules 2016

The Rules Committee has approved a set of amendments to the Rules of Court ('amendment Rules'). The amendment Rules have been gazetted electronically on 25 May 2016 at 5pm. Rule 8 of the amendment Rules is deemed to have taken effect on 18 November 2015 while the remaining amendment Rules will take effect on 1 June 2016.

A summary of the amendment Rules is provided below:

a. Order 69A, rule 2(4) is amended to track the language in Article 34(3) of the Model Law more closely.

b. Order 70 is amended to clarify that the Court has the power to award non-contractual pre-judgment interest to plaintiffs applying for judgment in default of appearance in an admiralty in rem action.

c. Consequential amendments are made to Order 89A relating to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A), Order 89B relating to the Mutual Assistance in Criminal Matters Act (Cap. 190A), Order 89E relating to the Terrorism (Suppression of Financing Act) (Cap. 325) and Form 210 in Appendix A to the Rules of Court entitled 'Search Warrant under Section 34 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Chapter 65A)'.

d. Order 94 is amended to widen the scope of the Monetary Authority of Singapore’s obligations in the discovery of documents relating to civil penalty claims under the Securities and Futures Act (Cap. 289).

e. Consequential amendments are made to Order 110 in light of the repeal of section 130N of the Legal Profession Act (Cap. 161) and insertion of a new section 36E into the same Act, with effect from 18 November 2015.

f. Forms 251 and 252 in Appendix A to the Rules of Court entitled 'Notice of Counsel' and 'Notice of Change/Appointment of Counsel' respectively are amended to require the notices to specify (a) whether an advocate and solicitor appointed as counsel for proceedings in the Singapore International Commercial Court, or in an appeal from that Court, is or is not registered under section 36E of the Legal Profession Act; and (b) the type of law practice in which the advocate and solicitor practises.

Please click here to view the Rules of Court (Amendment) Rules 2016.

Errant doctors can expect deterrent sentences: Top court

Straits Times
28 Jul 2016
K.C. Vijayan

Errant doctors can expect to face deterrent sentences, the top court has warned, in explaining why it overturned a medical tribunal's decision in a misconduct case.

"Public interest considerations weigh heavily in imposing deterrent sentences on errant doctors who are found guilty of professional misconduct," said the Court of Three Judges comprising Chief Justice Sundaresh Menon and Judges of Appeal Chao Hick Tin and Andrew Phang. "This court has in fact given fair notice of its intention to recalibrate sentences across professional misconduct cases."

It cited three past cases involving errant doctors where the sentences were lenient and "should have in fact been longer". Justice Phang was writing on the court's behalf in judgment grounds released yesterday.

Following a Singapore Medical Council (SMC) appeal, the court in May reversed the acquittal of Dr Wong Him Choon after finding that a disciplinary tribunal erred over his management of construction worker Fan Mao Bing, who had broken his hand in a fall. The court suspended the 51-year-old orthopaedic surgeon at Raffles Hospital for six months for professional misconduct, and ordered him to undertake not to repeat such conduct in future.

Dr Wong gave Mr Fan just two days' medical leave to cover his hospital stay for surgery and certified him fit for a month's light duties on Sept 4, 2011. But light duties were unavailable, and when Mr Fan saw him on Oct 5, Dr Wong backdated the leave to cover Sept 6 to Nov 20, 2011.

The court said Dr Wong was trying to hide his mistake of "failing to ensure there were adequate conditions for rest and rehabilitation".

It agreed with the SMC that Dr Wong's main concern "was not the patient's welfare" but "advancing the interests of the employer ".

Justice Phang added: "It should not be the case that a patient has to 'kneel and beg' (as the patient in fact did, according to Dr Wong) for medical leave that he was in any case entitled to on proper clinical grounds."

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

BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another - [2016] SGHC(I) 01

State Ct RC No 2 of 2016 - Case docketing system for complex criminal cases

State Courts

New BCA rules for building owners to improve accessibility for less mobile persons

28 Jul 2016
Amanda Lee

SINGAPORE – Owners of existing commercial and institutional buildings must include “barrier-free” accessibility upgrades when they undergo additions and alterations works, under new rules by the Building and Construction Authority (BCA) that will kick in next year.

These are for buildings visited frequently by the public, and are meant to accommodate wheelchair users and others with disabilities.

Buildings such as schools, offices, shopping centres, markets and food centres will have to make the entrance barrier-free, by having a ramp and providing at least one accessible toilet, for example.

Announcing the new requirements at the third Singapore Universal Design Week 2016 on Wednesday (July 27), Minister for National Development Lawrence Wong, who was guest-of-honour at the event, said that older buildings still have accessibility issues, especially for those built before 1990.

As Singapore moves towards an ageing society, features such as ramps and accessible toilets in buildings are important to give users better access, he said, noting that by 2030, one in four Singaporeans will be aged above 65.

The public sector will take the lead for state and public buildings, he added. “We have already been doing so, progressively retrofit and upgrade, and make sure that all public-sector buildings are brought up to scratch and meet UD (Universal Design) standards.”

However, more has to be done in private-sector buildings, Mr Wong said, given that about one in four existing commercial and institutional buildings here are still not accessible.

“This poses a tremendous problem in facilitating seamless travel… so we need to accelerate the progress of (such) improvements for existing infrastructures and buildings,” he said.

Before implementing the new requirements, the BCA will engage and consult tripartite partners such as public-sector agencies, industry players, and voluntary welfare organisations.

To continue supporting building owners who want to upgrade voluntarily and retrofit existing structures, the BCA’s S$40 million Accessibility Fund — which was supposed to expire early next year — will be extended to March 2022.

The fund will cover the construction of accessibility features for the visually and hearing-impaired, such as braille signage and hearing loops.

In addition, building owners can now tap on the fund twice for each development, to a maximum cap of S$300,000.

BCA’s chief executive officer, Dr John Keung, said that the authority aims to have 70 per cent of commercial and institutional buildings in Singapore barrier-free by 2030, and the enhanced Accessibility Fund is to encourage owners to plan gradual improvements to their buildings that are in line with their maintenance and work schedules.

When contacted by TODAY, City Developments Limited (CDL), which owns buildings such as The Arcade and Republic Plaza at Raffles Place and City Square Mall near Little India, said that “raising accessibility to buildings will certainly benefit the community”.

“In support of a more inclusive society, CDL has incorporated barrier-free upgrades in its existing buildings such as Fuji Xerox Towers, Palais Renaissance and Manulife Centre. Some of the upgrades include accessible toilets for the handicapped, stair lifts and platform lifts,” its spokesperson said, adding that the BCA’s Accessibility Fund will encourage and help owners do the necessary upgrades in existing buildings.

Mr Poon Hin Kong, deputy chief development officer (Asia) at CapitaLand, which owns Westgate mall in Jurong East and Raffles City Shopping Centre, said that “all CapitaLand malls and eight office buildings in Singapore already provide barrier-free entry, accessibility on the entry level and an accessible washroom”.

“CapitaLand has incorporated social integration criteria in our Sustainable Building Guidelines, to ensure that such considerations are factored in right from the start of the project development process. These include Universal Design guidelines which ensure that public spaces on CapitaLand properties are accessible to users of different age groups and abilities,” he said.

Mr Poon added that the property group has set a target to achieve “at least a Universal Design Gold award” for all new projects in Singapore.

At Wednesday’s event, National Development Minister Lawrence Wong also launched a new Universal Design Guide for Public Places, for industry professionals to consider designs that would benefit seniors so that they could access buildings and public spaces safely and in comfort.

A “Universal Design Mark” for family-friendly businesses (the BCA-MSF UD Mark), being jointly produced by the BCA with the Ministry of Social and Family Development, will be introduced at the end of this year.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

S. Pacific Resources Ltd v Tomolugen Holdings Ltd - [2016] SGHC 88

Law Soc: Family Justice Courts - Hearing break in June 2016

Family Justice Courts
Hearing break in June 2016 

The Family Courts will be having a one-week long hearing break in June 2016 from Monday, 20 June 2016 to Friday, 24 June 2016.

The Youth Court, Mentions Courts, Duty Judge's chambers and frontline service counters will remain in operation.

Accused changes his mind, won't plead guilty: Yang Yin trial

Straits Times
28 Jul 2016

Former tour guide reverses decision he made three weeks ago and now says he is innocent

Three weeks after abruptly deciding to plead guilty to two charges of misappropriating $1.1 million belonging to a widow, former China tour guide Yang Yin performed another U-turn yesterday and said he was innocent.

Yang's lawyer Irving Choh, at a court hearing earlier this month, said: "My client, in an unusual twist, has decided to plead guilty to two charges."

But yesterday, Mr Choh said: "He has changed his mind."

Asked by Deputy Presiding Judge of the State Courts Jennifer Marie to confirm his decision, Yang, through a Mandarin interpreter, said: "Yes, I confirm what my counsel has said, because we have more evidence, which we have yet to submit."

Yang, 42, is accused of committing criminal breach of trust involving $500,000 on Feb 19, 2010, and involving $600,000 on Jan 18, 2012 - amounts that the prosecution has described as "by no means trivial".

He got to know Madam Chung Khin Chun, 89, who was diagnosed with dementia in 2014, when he was her tour guide in Beijing in 2008. Madam Chung and her late husband Chou Sip King did not have any children.

Yang came to Singapore and moved into Madam Chung's Gerald Crescent bungalow a year after they met. In 2010, Madam Chung made a will in which Yang stood to inherit everything.

However, in April last year, the courts recognised a new statutory will that her niece, Madam Hedy Mok, made on her behalf, that would leave most of her assets to charity.

Madam Mok took out a series of civil actions in 2014, saying her aunt had been unduly influenced by Yang. She also sued him for manipulating the widow to control her assets, worth an estimated $40 million.

Yang was arrested in September 2014 and charged a month later with a slew of crimes - mostly related to falsifying receipts made to his company, Young Dance and Music Studio, so he could stay in Singapore.

He was also charged with cheating, immigration crimes, and breaking Companies Act laws.

He has been in remand since October 2014.

On May 31, he pleaded guilty to 120 out of 347 charges. The rest will be taken into account when he is sentenced, after the ongoing trial for his most serious charges is over.

On the sixth day of the trial yesterday, DSP Jane Lim Miaoqing took the stand again as the prosecution's 11th and final witness.

The investigator with the Commercial Affairs Department said Yang lied twice during recorded interviews in October 2014.

Yang had first said he withdrew $600,000 from Madam Chung's bank account in January 2012 to buy five paintings with the money.

Later, he said: "Actually, my grandmother (Madam Chung) asked me to take out $600,000. I passed her the cash after I withdrew it."

However, he later did a U-turn. "After thinking about it, I realised that I did buy the five paintings and I do not know why I told you otherwise just now."

Mr Choh told the court that Madam Chung and Yang had agreed not to let anyone find out she had passed him the money "because she knew the transfer of monies from her to him would cause jealousy and gossip".

But the deputy superintendent disagreed with Mr Choh's assertion. She also disagreed that the money was a gift from Madam Chung to Yang.

The trial continues on Tuesday next week, and Yang is expected to take the stand.

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

Roslan bin Bakar v Public Prosecutor - [2016] SGCA 29

SLA: Practice Circular No. 1 of 2016 - Incorrect entry of mortgagee’s name in instruments

China parties lose online defamation suit

Straits Times
27 Jul 2016
Selina Lum

Two S'poreans cleared in case that underscores Net anonymity

Three Chinese construction and real estate companies and two senior executives who say they were defamed by a series of online articles accusing them of siphoning assets from China, have lost their lawsuit against two Singaporean men.

In a defamation case that underscores the anonymity that the Internet provides, the High Court found that the plaintiffs failed to prove that the two men were responsible for posting the articles and that the articles had been accessed by readers in Singapore.

The suit was brought by Qingdao Bohai Construction Group, Qingjian Group, its Singapore subsidiary Qingjian Realty, and Chinese nationals Du Bo and Yuan Hongjun. Mr Du is a director of all three companies, while Mr Yuan is the chairman of Qingdao.

They alleged that cousins Goh Teck Beng and Ng Teck Chuan were behind a series of articles, posted in 2013 on blogs, forums and websites hosted in China, Hong Kong and the United States, that accused them of embezzlement.

Some of these online articles were signed off with Mr Ng's name, identity-card number and purported e-mail address.

However, there was no electronic evidence tracing the articles to the defendants, so the person who posted them remains unidentified.

The plaintiffs also alleged that the pair were responsible for mailing two articles from Taiwanese newspapers containing similar accusations to two local banks here.

They argued that the pair had a motive to inflict "revenge" on the Qingjian group of companies.

Their uncle, Mr Goh Chin Soon, as well as Mr Goh Teck Beng himself, are directors of HuanYu (Qingdao) Development, which is embroiled in several legal disputes with the Qingjian Group over construction projects in China.

The plaintiffs relied on video and audio recordings, secretly taken when their representatives visited Mr Ng at the coffee shop where he worked. They contended that he admitted, on tape, responsibility for the articles.

But the defendants argued that the alleged admission was, at best, a "misunderstanding".

They argued Mr Ng thought he was being asked about something else - an online report his cousin had submitted directly to the official website of an anti-corruption body in China's Communist Party.

The defendants said Mr Goh had used Mr Ng's name in reporting the conduct of the Qingjian Group, Mr Du and Mr Yuan, as he went often to China and feared for his safety.

Justice Belinda Ang, in a 130-page judgment published yesterday, found Mr Ng's alleged admission to be ambiguous and, hence, unreliable.

Justice Ang did not accept that the citing of Mr Ng's name and details in the articles inferred that he and Mr Goh are responsible.

"If the defendants were out to harm the plaintiffs' reputation, it would surely be incongruous and illogical for the defendants to leave a trail by mentioning (Mr Ng's) name and particulars on the online articles," she said.

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

Qingdao Bohai Construction Group Co, Ltd and others v Goh Teck Beng and another [2016] SGHC 142

Re Ang Jian Xiang and others - [2016] SGHC 92

Law Soc: Qualification to practise as sole proprietor, partner or director in a Singapore law practice

Law Society

Qualification to practise as sole proprietor, partner or director in a Singapore law practice

No solicitor may practise as a sole proprietor, partner, or director (includes associate director) of a Singapore law practice unless the requirements set out in section 75C Legal Profession Act are complied with.

Under section 75C Legal Profession Act, before you may practise as a sole proprietor, partner, or director (includes associate director) of a Singapore law practice, you must fulfil the following requirements:

• You must have completed the Law Society's mandatory Legal Practice Management Course ('LPMC') (ref: section 75C(1)(a) Legal Profession Act)

• You must have been in practice for at least 3 years (either 3 continuous years or 3 out of 5 continuous years) as a solicitor in private practice or employed as a legal officer in the Singapore Legal Service (ref: section 75C(1)(b) and (c) Legal Profession Act) unless you were admitted as a solicitor before 1 March 1997.

However, section 75C Legal Profession Act does not apply to an advocate and solicitor who has been in practice as a sole proprietor or partner or director of a law practice before 9 March 2007.

If you meet the above requirements and there is a change in your designation (e.g. promotion) in the course of the practice year, you are required to submit a 'Notice of Change of Particulars' through eLitigation. The Notice of Change of Particulars can only be submitted through the eLitigation account of the individual lawyer. If you do not have an eLitigation account, you may approach the Service Bureau for assistance, subject to payment of applicable fees and charges. Please refer to the Supreme Court's step-by-step guide on submitting a Notice of Change of Particulars.

Employment Pass holders must soon have higher minimum pay

Straits Times
27 Jul 2016
Joanna Seow

Qualifying salary for foreigners to be hired on Employment Passes raised to $3,600

From January next year, foreign professionals will need to be paid at least $3,600 a month if firms want to hire them on Employment Passes (EPs), up from $3,300 now.

The Ministry of Manpower (MOM) said yesterday that this is to keep pace with rising local wages, but business associations are worried that firms could lose competitiveness due to rising labour costs.

The changes are also meant to "maintain the quality of our foreign workforce and enhance their complementarity to the local workforce", said the ministry.

The qualifying EP salary was last raised in 2014, from $3,000, and before that in 2012, from $2,800. More experienced workers must also earn more to match their skills and work experience.

Starting salaries of graduates from local universities have been rising, and touched $3,300 a month at the median last year for Nanyang Technological University, National University of Singapore and Singapore Management University graduates in full-time permanent employment, according to MOM statistics.

Soon, EP applicants will also need to earn more to qualify for passes. Employers who want to renew their employees' existing EPs will have close to a year to adjust.

Passes which expire before Jan 1 can be renewed for up to three years based on existing criteria, and those expiring from Jan 1 up to and on June 30 can be renewed for up to one year based on existing criteria.

Passes which expire from July 1 next year onwards will need to be renewed under the new criteria.

There were 187,900 EP holders here as of December last year.

Employers do not have to pay a levy or adhere to a quota for workers on EPs, unlike for workers on S Passes or work permits.

The latest changes to the EP criteria could help to raise the quality of the workforce overall, said Singapore National Employers Federation executive director Koh Juan Kiat. "We expect employers to be more stringent on the qualifications, skills and experiences of foreigners that they hire," he said.

But National Trades Union Congress assistant secretary-general Patrick Tay warned in a Facebook post that the MOM will have to watch for employers "who through 'creative means' artificially blow up the wages of these foreign PMEs to meet this new criteria".

These companies may attempt to "increase" wages by illegally including add-ons such as allowances, he said.

The salary increase left some industry representatives concerned.

"This adjustment will increase the compliance cost, especially for those industries which face the challenges of recruiting skilled local workers," said Singapore Chinese Chamber of Commerce and Industry president Thomas Chua, also a Nominated MP.

Association of Small and Medium Enterprises president Kurt Wee said: "We understand there are social and other considerations but there are cost considerations as well, and when businesses are not viable, they close and we lose jobs."

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

Ong Chai Hong (executrix of the estate of Chiang Chia Liang, deceased) v Chiang Shirley and others - [2016] SGHC 91

How does Brexit impact employers in Asia?

29 Jul 2016

Changes to Town Councils Act ‘should retain its spirit’

27 Jul 2016
Laura Elizabeth Philomin

SINGAPORE — The ongoing review of the Town Councils Act (TCA) could aim to give authorities the power to intervene should potential wrongdoings surface and clearly spell out what is required of town councils in terms of governance, said political watchers and experts.

Despite the need for greater oversight, the observers said the statute should keep to its original intent, which was to give elected Members of Parliament a degree of autonomy over the running of a town.

Their comments came after National Development Minister Lawrence Wong said last Sunday that the review of the statute — announced in 2013 — could be finalised by the end of the year.

A “strategic review” of the TCA — specifically, the roles and functions of town councils, in view of their politicised nature — was proposed by a Ministry of National Development team that looked into the sale of Town Council Management System software belonging to People’s Action Party town councils.

The observers TODAY interviewed said the current TCA lacked details and clarity, such as on the duties of town councillors.

National University of Singapore’s (NUS) corporate governance expert Mak Yuen Teen also said the proposed changes to the Act should spell out town council members’ duties and liabilities, which should be on a par with those for company directors.

But determining the level of accountability required would be a balancing act, given that some of these town council members are politicians who were not elected specifically for their ability to oversee or manage town councils.

“For example, should town council members be prosecuted if there is poor lift maintenance leading to serious injury or death to residents, on the basis that they did not do enough to ensure proper lift maintenance?” he asked.

Strengthening corporate governance standards, such as for conflicts of interest and related party transactions, is another area to deal with, said Singapore Management University (SMU) law don Eugene Tan.

But the proposed changes should not result in excessive control by the government, he added.

“I think it would be going too far if the proposed amendments to the Town Councils Act make each town council operate as if they are mini HDBs (Housing and Development Board) ... The whole idea of the Act is to give town councils the latitude to decide how best they want to serve their residents,” said Assoc Prof Tan.

He added that the proposed amendments should still retain that “intimate connection” between how residents exercise their vote and the political party they trust to run their town councils.

Assistant Professor Woo Jun Jie from Nanyang Technological University said the TCA currently does not give the authorities sufficient power to step in when lapses surface. The lapses uncovered in the Aljunied-Hougang Town Council (AHTC), for instance, resulted in a tortuous legal tussle before external auditors were appointed to recommend remedies.

Asst Prof Woo said, however, that the proposed changes should not lead to intrusive supervision, such as making town councils submit reports more frequently or raising the amounts they should keep in sinking funds.

“Mandating information disclosure could provide a good way for regulators to monitor the daily operations of town councils without having to intercede unnecessarily,” he said, adding that creating an open database for all town councils to post their finances and accounts would make it easier to access and compare the various town councils’ accounts.

On whether the amendments would disadvantage smaller political parties’ running of town councils, Institute of Policy Studies deputy director (research) Gillian Koh said there would not be any issue of privilege, since the Act would apply equally to all.

“It is better to ensure that things are run with a high level of accountability and integrity and pay the necessary cost of compliance than allow public monies to be misused for lack of good governance,” Dr Koh added.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Elbow Holdings Pte Ltd v Marina Bay Sands Pte Ltd - [2016] SGHC 90

SHC: Enforceability of Chinese judicial settlements in Singapore

27 Jul 2016

S$50m unauthorised investment by Mindef among lapses flagged by AG

Business Times
27 Jul 2016
Michelle Quah

Auditor-General says some of the lapses led to loss of revenue and raised concerns about governance in government departments and stat boards

[Singapore] AN audit of Singapore government bodies has uncovered lapses in financial controls and governance of public funds - lapses which have led to the loss of government revenue and raised concerns over governance practices.

Among these were investments made by the Defence Ministry (Mindef) without proper approval or evaluation, and donations raised by the Nanyang Polytechnic for an unauthorised purpose.

Also uncovered in various government bodies were lapses in their administration of programmes, such as the lack of oversight by the Education Ministry (MOE) in the monitoring and enforcement of scholarship bonds; there were also failings in its management of contracts.

These were the main findings in the report by the Auditor-General (AG) for the financial year 2015/16, based on its audit of the financial accounts of government ministries, organs of state and statutory boards, among others.

The report said: "In this year's audits, the AGO (Auditor-General's Office) uncovered a number of instances of inadequate financial controls over government operations, including those outsourced to external operators. There were (also) cases of inadequate controls over the collection of fees resulting in loss of revenue to the government."

In one instance, the AGO found that Mindef had made a S$50.26 million investment in an American real estate investment trust exchange-traded fund without the requisite approval of the SAVER-Premium Fund's board of trustees. It also found that Mindef had made the investment through an investment manager without first obtaining the board's approval to appoint this manager to render such services.

In another case, AGO found that the Housing and Development Board (HDB) did not have adequate oversight of the operations of its car parks in industrial estates and residential estates that were outsourced to commercial operators. In many instances, vehicles were not charged parking fees and motorists evaded payment by manipulating the car park system.

There was also the case of the Land Transport's Authority's "weak" controls over the collection of toll at the Woodlands and Tuas Checkpoints, which resulted in an under-collection of toll amounting to an estimated S$13.93 million; this was a fifth (21.9 per cent) of the total toll collected the year before (FY2014/15).

Also flagged by the AGO in its report were instances of poor governance over the management of public funds. Specifically, this related to the dealings of Nanyang Polytechnic (NYP) with a subsidiary.

"AGO noted that some members of NYP's board of governors with vested interests in a subsidiary of NYP were involved in the evaluation and decision-making process on matters relating to the subsidiary, including the approval of a funding model that was more generous than that provided for in the government's instructions."

It also noted that NYP did not charge market rates for premises used by the subsidiary and had given funding in excess of that approved by the board. This resulted in hidden subsidies and excess funding totalling S$8.38 million given to the subsidiary from its inception in 2007 until March 2015.

"NYP's practices reflect a disregard for financial controls and proper governance," the AGO's report said.

The AGO also found that NYP had allowed the name of the Nanyang Polytechnic Education Fund, an Institution of a Public Character (IPC), to be used to solicit donations for a purpose not authorised under the fund. It said that, even after the AGO's enquiry, "NYP also did not take proper actions to regularise the matter".

The MOE came under fire for not maintaining adequate oversight of two universities' monitoring and enforcement of scholarship bonds.

It found 14 cases where Nanyang Technological University (NTU) and the National University of Singapore (NUS) either failed to send letters to remind scholars of their bond obligations and the consequences of not fulfilling them, or failed to send letters of demand to impose liquidated damages where warranted. The letters were late by as much as two years.

The AGO also observed that there were inadequate controls to ensure that tuition fee loans and study loans due - amounting to S$228.04 million as at June 30, 2015 - were promptly recovered. It noted that the two universities relied on outsourced agents to monitor and recover the loans, and that actions to recover and follow up on default cases were not taken in timely fashion in a number of instances.

"MOE also did not follow up promptly on long-outstanding loans surfaced by the outsourced agents for its review. Such control weaknesses would adversely affect the recoverability of the loans and increase the risk of loss of public funds," the AGO said.

There were also lapses in the management of contracts by the HDB and the National Arts Council (NAC). In its audit of the HDB, the AGO's test checks on the accounts of 36 contracts relating to the construction and upgrading of HDB flats, with final payments totalling S$37.62 million, revealed delays of up to 3.3 years in making final payments to contractors.

For the audit of the NAC, the AGO's test checks of contracts for the Victoria Theatre and Victoria Concert Hall Redevelopment project revealed that 47 out of 164 variation works were carried out before approvals were given. The delays in obtaining approval were up to 31/2 years.

Some of the ministries and stat boards in question have responded to the AGO report.

The MOE said in a statement that it takes a serious view of the issues flagged by the AGO, and that it has taken action "to rectify irregularities, as well as strengthen processes and internal controls".

It pointed out that "most of the lapses flagged by AGO were from earlier graduation batches", before the ministry had worked with the universities to tighten and enhance processes in monitoring and enforcing the scholarship bonds. It said default rates have fallen "significantly" over the last three years.

It said it would "continue to work closely with the universities to ensure that the processes are applied rigorously, and that international students take their obligations seriously".

NYP said in its statement that it has "commenced a detailed review of the areas highlighted to ensure that measures are put in place to effectively address the issues of concern".

It explained that selected board members and staff of NYP were appointed to the board of its subsidiary, Nanyang Polytechnic International Private Limited (NYPi) "to ensure alignment of objectives". It said NYPi's board directors do not receive separate directors' fees and that "none of the decisions cited in the audit observations yielded personal gain for any of the individuals involved".

Still, it said, it is putting in place a governance framework for its board members on the handling of transactions with NYP's subsidiaries. It added that it has started charging NYPi market rate rental and has informed NYP's board of the excess funding and is awaiting its decision.

As for the donations, NYP said the funds were originally raised to provide financial assistance to needy graduates and that it has informed MOE of this and has written to the donors to seek their approval to direct their donations to this purpose instead.

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

Public Prosecutorv Vejiyan a/l Muniandy and another - [2016] SGHC 76

Sections of the New Human Biomedical Research Act in effect

27 Jul 2016

MAS proposals widen investment scope for insurers

Straits Times
26 Jul 2016

SINGAPORE — Insurance companies in Singapore will face less onerous restrictions to invest in bonds and equities under new rules being proposed by the Monetary Authority of Singapore.

The draft risk-based capital framework, which has been in the works for four years, is the insurance industry equivalent of the Basel III regime for banks. It aims to improve risk coverage and to assess capital adequacy better than the current 2005 framework.

“The biggest impact on insurers would be the widening of the eligibility criteria for matching adjustment,” said Ms Sally Yim, Moody’s senior vice- president for the Asia financial institutions group. “This is favourable for insurers as the proposed relaxed criteria would make it easier for insurers to perform their asset-liability management.”

The matching adjustment mechanism was introduced in a consultation paper two years ago as a calculation to balance life insurance liabilities against assets denominated in both Singapore dollars and US dollars, but the market felt that the proposed conditions were too conservative and too narrow.

In response, the MAS has relaxed the conditions, in particular, allowing the use of US dollar bonds to match Singapore dollar liabilities, subject to a suitable currency swap being in place and the use of callable bonds, with only cash-flows before the first call to be recognised. The MAS addressed only investments in Singapore dollars and US dollars, since almost all the liabilities of the city-state’s life insurers are denominated in these two currencies.

“Given the lack of depth in the Singapore dollar fixed-income market, and the fact that most insurance liabilities for life insurers in Singapore would be in the local dollar, giving them the flexibility to match it with US dollar assets (which has a much bigger pool), with proper hedging in place, would widen the investment choices for insurers,” said Ms Yim.

Insurance companies will find less of an obvious solution to the matter of unrated bonds, which make up a large part of all Singapore dollar issuance. Bankers say insurers have the most difficulty in buying such bonds as they attract a risk charge similar to that of non-investment grade bonds.

Of the corporate bonds that Singapore insurers hold, only 10 to 20 per cent are unrated Singapore dollar issues. Local statutory boards sell a significant proportion of these while the balance is from financially strong companies that did not seek a rating.

The MAS had previously proposed that unrated bonds from statutory boards and recognised multilateral agencies would attract a credit spread charge tied to the sovereign AAA rating of the Singapore government. Other unrated corporate bonds would attract a charge equivalent to paper with a rating between BBB- and BB-, prompting market participants to appeal for a lighter treatment for notes to be extended to government-linked entities not rated.

In response, the MAS is now willing to put the credit risk charge at 50 per cent of that proposed for a AAA corporate bond to notes sold by Singapore statutory agencies. For other unrated corporate bonds, the credit charge remains unchanged. The risk charge has also been lowered in the latest revisions for other investments, including those in unlisted equities, such as private equity and hedge funds, and in fixed-income investments.

“These reduced risk charges are more in line with international standards now as the previous proposal was more punitive. Hence, insurers would be required to hold relatively less capital for these assets and exposure than under the previous proposal,” said Ms Yim. Another priority for the central bank is infrastructure financing, which it feels would match life insurers’ need for long-term assets. The MAS plans to gauge the interest of insurers for this asset class.

The deadline for feedback to the latest MAS proposals is Oct 20.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Law Society of Singapore v Thirumurthy Ayernaar Pambayan - [2016] SGHC 87

Common Reporting Standards and its impact on fund managers

27 Jul 2016

Juno's trip to Jupiter holds lessons for S'pore

Business Times
26 Jul 2016
Indranee Rajah

Singapore eyes becoming an international hub for debt restructuring. The global economy is making the ride bumpy, but new frontiers are waiting to be conquered

ON JULY 4, 2016, space probe Juno went into orbit around Jupiter.

To do so, it had to pass over Jupiter's North Pole, through a region described by NASA scientist Heidi Becker as "the scariest part of the scariest place" - belts of violent radiation where electrons bounce back and forth at the speed of light with the risk of knocking out the spacecraft's computer and electronics.

Dr Becker said: "They will go right through a spacecraft and strip the atoms apart inside your electronics and fry your brain if you don't do anything about it."

But the scientists prepared well - Juno's sensitive electronics were shielded in a one-cm thick solid titanium box, providing enough protection to carry out the programmed engine burn, slowing flight sufficiently for the probe to be captured by Jupiter's gravity and pivot its solar panels to face the sun, and putting the spacecraft perfectly into orbit.

The Juno mission reminded me of the current state of the world economy and the work of Singapore's Committee for the Future Economy (CFE).

The global economy has already been battling headwinds and having a bumpy ride. The growth outlook for advanced economies has deteriorated - US growth momentum has slowed; the pace of recovery in the euro zone is uneven. China's growth is projected to moderate as it rebalances its economy, with the risk that ongoing reforms may lead to a further drop in demand. Brexit has now thrown the global economy into the economic equivalent of a Jovian cosmic storm, rattling everything around in its wake.

A snapshot of July 2016 headlines tells it well enough: "Bank shares hit as Wall Street stocks end lower"; "Pound hits fresh lows as Brexit impact worries surge"; "Asian shares fall on mounting Brexit fallouts"; "Asian market hammered as yen surges and pound sinks on fresh Brexit fears".

This is the environment for which the CFE is preparing. It's tough; it's challenging; the outcomes are by no means certain.

But solid planning, meticulous preparation and riding on (rather than fighting against) prevailing economic forces will make the difference.

Like Juno riding turbulence, braking and turning to catch the sun, our task, as we navigate a global economy buffeted by winds of change, is to plot the path for Singapore's future economy, prepare titanium boxes for risk management and engineer the economic engine burn to catch opportunity and chart new courses to stability, growth and prosperity.

This work is multi-faceted, complex and has many moving pieces.

One of these pieces is turning Singapore into an international centre for debt restructuring.

In 2013, the Insolvency Law Review Committee (ILRC) made recommendations to update Singapore's insolvency laws and noted that demand for debt-restructuring services in Asia was growing.

The Committee to Strengthen Singapore as an International Centre for Debt Restructuring - co-chaired by Judicial Commissioner Kannan Ramesh and myself and comprising leading insolvency practitioners - was set up to consider how Singapore could meet that demand.

The committee's work is even more pertinent in the current economic climate, with news of businesses facing financial difficulty increasingly heard and felt.

The committee submitted its report on April 20. The report is at www.mlaw.gov.sg

Public consultations were conducted from April 20 to May 31. The Singapore government has accepted the committee's recommendations.

The report's three main recommendations:

• Enhance the legal framework for restructuring;
• Create a restructuring-friendly ecosystem;
• Address the perception gap.

The recommendations are summarised below:


Create bespoke rules and procedures for restructuring, including:

• Stipulating a clear non-exhaustive list of circumstances under which Singapore courts can assume jurisdiction over restructurings of foreign debtors;
• Enhanced moratoriums for restructuring: Allow automatic moratoriums and moratoriums with in personam worldwide effect. These moratoriums can be extended to (i) prevent creditors from taking action overseas (if the creditor has a presence in Singapore) and (ii) related entities of the debtor;
• Debtor disclosure requirements: Debtors must provide adequate information to allow restructuring stakeholders to make informed decisions;
• Consolidated proceedings before a single judge, to facilitate consistency and better oversight;
• Fast-tracked pre-negotiated restructuring plans (pre-packs) between debtors and major creditors;
• Enhancing the recognition and enforcement of Singapore restructurings. This should be done through promoting adoption of UNCITRAL Model Law on Cross-border Insolvencies, bilateral and multilateral agreements and protocols that improve communication and co-operation with foreign courts.

Specialist Insolvency Bench

• Set up a specialist insolvency bench for restructuring cases, comprising both Singapore and international judges.

Increase the use of ADR for insolvency and restructuring

• The Singapore International Arbitration Centre (SIAC) and the Singapore Mediation Centre (SIMC) should develop rules for insolvency and restructuring and strengthen their panels with insolvency specialists.


Increase the availability of rescue financing

• Introduce provisions for super-priority liens (which will take priority over existing security );
• Attract distressed debt financiers and specialist investors to Singapore;
• Greater promotion of existing incentives for rescue financing.

Strengthen the insolvency profession

• There are already good insolvency professionals in Singapore but to be an international centre of choice, Singapore will need even more and diverse insolvency professionals of the highest quality;
• Strengthen the pipeline through education, multi-disciplinary training and continuing professional development. 


A recent global study showed that Singapore was rated very highly as an effective jurisdiction for cross-border insolvency by insolvency practitioners who have had direct experience in restructuring work here.

Practitioners with no direct experience scored Singapore less highly. In short, there is a perception gap. Experiencing is believing.

The committee has recommended that:

• Steps be taken to close the perception gap. Debt restructuring in Singapore should be proactively communicated to the wider international restructuring community;
• Singapore-based insolvency professionals, judges and academics should increase participation in international insolvency events and platforms to raise awareness of Singapore's restructuring regime and capabilities.

In the months to come, we will be implementing these recommendations.

Stakeholders in Singapore, including insolvency lawyers and accountants, should gear up for this. We hope that international players who have not yet had experience of Singapore as a restructuring jurisdiction will avail themselves of the opportunity to do so.

With these recommendations, we are poised to set Singapore in a new direction as an international centre for debt restructuring as part of our plans for the future economy.

Here's where the parallel with Juno stops though.

Juno is destined to end at Jupiter. We, on the other hand, need to continue to push forward into new frontiers - like that other space craft: The Enterprise.

Going boldly where no man has gone before.

The writer is Senior Minister of State, Ministry of Law and Ministry of Finance, Singapore, and co-chairman of the Committee to Strengthen Singapore as an International Centre for Debt Restructuring

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


BAJ v BAK and another matter - [2016] SGHC 86

Revised listings due diligence guidelines issued by the Association of Banks in Singapore

26 Jul 2016

Tougher MAS action against tainted money amid 1MDB scandal

Business Times
26 Jul 2016
Jamie Lee

MAS points to dent in reputation as some banks fail to meet anti-money laundering standards

[Singapore] THE "no-nonsense" regulator that is the Monetary Authority of Singapore (MAS) has pledged more intrusive supervision and tougher action against financial institutions, as the 1MDB scandal reveals malignant spots on Singapore's financial sector and has hurt Singapore's reputation.

MAS will also make public its sanctions against financial institutions that run afoul of anti-money laundering rules "persistently or egregiously", said its managing director Ravi Menon on Monday.

The greater disclosure marks a new tack from MAS's typically private approach in most supervisory exercises, with the regulator now seeing benefits from "judiciously" naming and shaming banks that fail anti-money laundering standards, he said.

MAS will now conduct more inspections that include surprise visits and checks on documents such as minutes of meetings, to ensure these institutions toe the line, said Mr Menon.

The ongoing probe into financial transactions related to Malaysia's embattled state fund 1MDB is a stark reminder that risks from money laundering and illicit financing are real, Mr Menon said. The financial sector is particularly vulnerable to such risks, he added, calling it "part of our karma" as an international financial hub.

"There is no doubt that the recent findings have made a dent in our reputation as a clean and trusted financial centre," said Mr Menon, adding MAS is "disappointed" that lapses in controls, and breaches of regulation against money laundering and countering financing of terrorism, have been found among financial institutions.

"MAS is determined to fix the problem."

This comes as the US Department of Justice (DOJ) last week launched a lawsuit claiming more than US$3 billion was allegedly misappropriated from 1MDB and laundered through US financial institutions. The Wall Street Journal was among the media that reported some US$700 million from the investment fund had been allegedly siphoned into Malaysian Prime Minister Najib Razak's personal bank account - a charge he has consistently denied for the past year. The DOJ lawsuit referred to fund transfers to a "Malaysian Official 1".

A day after the DOJ statement, MAS publicly rapped DBS, Standard Chartered Singapore and UBS Singapore for "control failings" over flows of funds from 1MDB. MAS also said Falcon Private Bank failed to, among other things, file suspicious transaction reports. More banks are being investigated, but Mr Menon declined to give details on the ongoing probe, following the "unprecedented" statements from MAS last week.

"We have already said a lot more publicly than we usually do when investigations and reviews have not been completed yet."

Given that Singapore's anti-money laundering rules follow international standards, more rules are unlikely in this area, said Mr Menon, noting that the problem has been a failure to comply with rules, and poor judgment.

He also said most of MAS's dealings with financial institutions are kept private, so that management can have a "candid and open" conversation with the regulator. For that reason, MAS will not make public such inspection reports, finding it counterproductive, he said.

Mr Menon acknowledged transactions meant to move illicit funds are coming through complex layers, and that banks are challenged to spot suspicious flows. Some US$1.5 billion per year has been spent by Asian banks for anti-money laundering compliance, a study from LexisNexis Risk Solutions showed, with costs expected to go up. Dirty money is also flowing through other financial centres.

But Mr Menon dismissed the complexity as an excuse for any control lapses. He drew a parallel with developments in cybersecurity: with those on the other side getting smarter and more sophisticated, risk management must improve in lockstep with the rising threat.

"We may not be any worse than other jurisdictions. But that is no consolation. We have not met the high standards we have set for ourselves," said Mr Menon. "MAS is a no-nonsense regulator."

DBS, StanChart and UBS said last week they had voluntarily reported suspicious transactions to the authorities. But MAS had noted the "undue delay" in these reports.

Mr Menon said banks should be filing reports the moment fishy transactions are spotted, adding the banks do not have to be sure that a crime has been committed, before reporting them to the regulator. As it is, MAS also investigates every whistleblowing letter that it gets, said Ong Chong Tee, head of financial supervision at MAS, at the briefing.

From August, MAS will have dedicated units to monitor money-laundering risks and to boost enforcement action. This enforcement unit will look into all breaches of MAS regulations, including market conduct offences under the Securities and Futures Act, with the MAS exploring the use of machine learning algorithms to identify manipulative trading behaviour in the capital markets, or to detect patterns across suspicious money laundering transactions.

Even as MAS streamlines its regulatory enforcement and dials up its supervision over financial institutions, there has already been a six-fold jump in MAS inspections in recent years. From 2013 to 2016, MAS conducted 608 onsite inspections on financial institutions, a jump from 108 inspections about three years ago.

MAS has asked for senior management to be replaced in a couple of cases that showed ineffective management oversight in these areas.

In the last three years, MAS has imposed financial penalties on 27 financial institutions for offences linked to money laundering and terrorism financing, and has stripped licences of BSI Bank and some remittance agents for serious breaches of anti-money laundering rules. It has also been sending supervision results of foreign banks to the head office and the parent regulator, said Mr Menon.

"We will work hard with the industry to ensure that Singapore offers neither safe haven nor safe passage for tainted money from anywhere."

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

Public Prosecutor v Wong Wee Keong and another appeal - [2016] SGHC 84

MOM issues Tripartite Guidelines on the Employment of Term Contract Employees

26 Jul 2016

Restrict employers' right to ask for job seekers' criminal history: Forum

Straits Times
26 Jul 2016

Employers who check the criminal records of job applicants may reduce the chances of former offenders' successful reintegration into society ("Society must free ex-offenders from 'second prison' " by Mr Nicholas Matthew Goh; July 15).

There should be regulations against this.

Employers should have the right to request a candidate's criminal record only in certain cases, such as if the job requires a candidate to be responsible for large sums of money or sensitive information, or involves working with children, the disabled or the elderly.

Other jobs do not require such a background check.

Allowing companies to deny a person employment based solely on his criminal record is bad for society.

When former offenders have a hard time finding a job after being released, they can end up in poverty and return to a life of crime, raising the recidivism rate and crime rate in society.

There are different types of crime and different reasons for them. A person may not be a thug, but just encountered the wrong circumstances.

Rejecting a former offender outright, without any discussion of mitigating circumstances or what led to that particular crime means that a potential job is lost, regardless of whether it is deserved.

Criminals deserve to be punished - but that punishment should be determined by judges, not employers.

When former offenders are released, society has an interest in them not committing more crimes.

Criminality isn't usually an innate part of someone, but caused by a confluence of circumstances.

When someone feels he is part of an underclass that is systematically discriminated against, he is less likely to feel beholden to the laws of the society.

Francis Cheng

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

Ng Kong Choon v Tang Wee Goh - [2016] SGHC 83

Getting a prenuptial agreement in Singapore

26 Jul 2016

‘Upskirt’ video offender serves less jail time on appeal

26 Jul 2016

Too long a sentence will undo progress made by 29-year-old in rehabilitation, says judge

SINGAPORE — The High Court has allowed an appeal that will cut short the jail time a 29-year-old has to serve for taking “upskirt” videos, ruling that too long a sentence would have the potential to undo the progress the appellant had made so far in rehabilitation.

Joshua Ang Zhu Ci had been charged with a whopping 127 counts of filming or attempting to film “upskirt” videos, and pleaded guilty to 15 charges.

He was sentenced to 12 weeks’ jail for each charge in February, with three of them to run consecutively such that he would serve 36 weeks in jail.

He had appealed against the sentence.

In his grounds of decision released yesterday, Judge of Appeal Chao Hick Tin ordered the number of sentences to run consecutively be cut to two, meaning Ang would serve 24 weeks in jail instead.

But he rejected the argument for Ang to be sentenced to probation, stating that public interest and deterrence must be accorded “due weight” in this case.

Lawyer Quek Mong Hua, acting for Ang, had premised his appeal for probation on two factors: that Ang suffered from a mental condition, and that he has been successfully rehabilitated in the two years since he was apprehended in December 2013.

Judge Chao rejected the first argument, noting that the manner in which Ang committed the offences was “calculated" and “opportunistic”, and ran counter to the assertion that his mental condition — “depressive illness with obsessive-compulsive features” — impaired his self-control.

When Ang’s case was heard in February, it was revealed that his victims included friends, acquaintances and colleagues, and he had filmed them in secret while meeting them in places such as the church, shopping malls and at work, for nearly four years.

What was “significant”, however, was the argument that Ang has been successfully rehabilitated, and “care must be taken to ensure that his progress is not reversed”, said Judge Chao.

Ang, he noted, has been undergoing intensive psychiatric therapy under his psychiatrist, Dr Ang Peng Chye.

A psychologist at the church Ang attends, Mr Tony Ting, has also been counselling him.

Judge Chao observed: “The appellant saw Dr Ang 11 times and Mr Ting 16 times in total over the past two years.”

Both Dr Ang and Mr Ting gave “glowing reviews” of Ang’s progress and vouched “unequivocally” that Ang is unlikely to reoffend.

“I further note that the appellant has the exceptional support and commitment from his family, friends and church to secure his recovery and rehabilitation,’’ Judge Chao said.

“I also have no doubt that the appellant is genuinely remorseful.”

But he maintained a custodial sentence was appropriate in this case.

Judge Chao said this was ‘‘not only because a strong message must be sent to deter like-minded individuals from abusing technological advancements to prey on unsuspecting victims, but also because the appellant has committed or attempted to commit this serious offence 127 times and over a long period of three and a half years”.

What was important was that the sentence not be so “crushing” that it could “destroy any hope of recovery and reintegration of the appellant. It is in the public’s interest that this does not happen”, said the judge.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Ang Zhu Ci Joshua v Public Prosecutor [2016] SGHC 143

Customs Act - Customs (Duties) (Amendment) Order 2016 (S 369 of 2016)

Business succession planning: Part 1

22 Jul 2016

Can company indemnities and D&O really protect directors?

Business Times
25 Jul 2016
Lee Kim Shin

D&O policies are subject to market norms, and monetary and time limits. Also, certain risks are simply uninsurable

THE global rise of shareholder activism has been paralleled by increased regulatory attention.

This has created an environment under which board performance and corporate governance have come under unprecedented scrutiny, while directors face ever increasing risks of personal liability for financial or corporate governance lapses.

Under such conditions, is it any wonder that directors are demanding from companies the maximum protection by way of contractual indemnities, or directors and officers liability insurance (D&O)?

A company may be willing to offer broad indemnities, but these cannot be freely negotiated because of restrictions in the Companies Act.

Similarly, D&O policies are subject to market norms, and monetary and time limits. More to the point, certain risks are simply uninsurable.

This article will explore the permitted scope of D&O policies and indemnities in the context of recent changes to the Companies Act.

Companies Act

With two exceptions, the Companies Act prohibits a company from exempting or indemnifying a director from any liability arising from any negligence, default, breach of duty, or breach of trust.

The first exception allows a company to provide third-party indemnities to its directors for liability incurred to a person other than the company.

An example is liability for shareholder class actions; another example would be legal expenses incurred in defending civil or criminal proceedings and regulatory investigations or actions.

Because legal costs cannot be recovered against the prosecution, a third-party indemnity is of significant value to a director who is charged with a criminal offence but is subsequently found innocent.

The Airocean case is an example where directors were involved in protracted criminal proceedings to defend themselves for the company's failure to announce certain information and were finally acquitted of the charges.

The Companies Act, however, imposes limits on third-party indemnities, and these are discussed further below.

The second exception is that companies may purchase, at their own cost, D&O insurance to cover liabilities that arise from a director's negligence, default, and breach of duty or trust.

That said, it should be noted that liabilities arising from a director's fraudulent or dishonest conduct, and criminal fines and civil penalties imposed by regulators, are uninsurable on the simple basis that such insurance is contrary to public policy.

Third-party indemnities and defence funding

The Companies Act expressly prohibits a company from indemnifying a director against:

• Criminal fines and civil penalties imposed by regulators;
• Liabilities incurred in defending criminal proceedings in which he is convicted; and
• Liabilities incurred in defending civil proceedings brought by the company or a related company in which judgment is given against him.

If a conviction or judgement is given against him, the director must repay any loans the company made to him to meet any of these liabilities.

When it comes to defence funding, a D&O policy is a useful supplement as coverage normally extends to defence costs in criminal or civil proceedings as well as regulatory investigations and inquiries, even if the defence is ultimately unsuccessful (unless, of course, these costs are excluded by the policy).

Corporate group

When someone is appointed as a director in a subsidiary by the parent company, or in a joint-venture company, he should consider obtaining an indemnity from the parent or his appointer. This is permitted under the Companies Act, although subject to the same restrictions discussed above.

The D&O policies of many companies also cover a director within the corporate group, which includes subsidiaries. However, they normally exclude associate companies and companies in which the parent has a minority interest.

It is therefore prudent for the director to obtain an indemnity from his appointer or ensure that he is covered under a D&O policy of the joint-venture company or associated company.

Insured vs insured exclusion

It is common for a D&O policy to exclude coverage when a director is sued by the company or other insured person.

This standard exclusion is due to the concern over the independence of claims brought by one insured (for example, the insured company) against another insured (the director of the company that is suing).

The breadth of the "insured versus insured" claim exclusion depends on the terms; there have been instances where insurers have shown a willingness to negotiate coverage.

In this regard, a director should also find out whether the company's D&O policy covers liabilities arising from a derivative action commenced by shareholders "on behalf of the company", or an action by a court or creditor-nominated liquidator of the company.

Environmental claims

The Singapore Exchange (SGX) will require annual sustainability reporting from listed companies on a "comply or explain" basis starting from any financial year ending on or after Dec 31, 2017.

When implemented, this could put a spotlight on a company's compliance with legal requirements relating to environmental, social and governance (ESG) factors which the board has ultimate responsibility for.

It should be noted that D&O policies usually exclude clean-up and pollution costs. Directors should therefore have these aspects covered by the D&O policy or company indemnities.

The observations above demonstrate that boards should regularly review the scope of company indemnities and D&O policies to take into account changes in the law or regulatory requirements, and market practice in the insurance industry.

The writer is a member of the Governing Council of the Singapore Institute of Directors

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

Singapore Armed Forces Act - Singapore Armed Forces (Urine Specimens and Urine Tests) (Amendment) Regulations 2016 (S 368 of 2016)

[INT] Competition bites – ASEAN and beyond

22 Jul 2016

Singapore to toughen laws against unruly air travellers

Straits Times
25 Jul 2016
Karamjit Kaur

Move will give police, courts wider powers ahead of global ruling coming into force

Singapore police and courts will get wider powers to deal with troublemakers on flights when new laws are passed in the next six to 12 months.

The move will come before a global ruling by the United Nations aimed at tackling the growing problem of unruly air passengers, The Straits Times has learnt.

Under current international civil aviation laws stipulated by the Tokyo Convention, Singapore can take action only if the culprit arrives on Singapore Airlines (SIA) or other Singapore carriers.

This means that troublemakers on foreign carriers usually get off scot-free. To plug this loophole, the International Civil Aviation Organisation (ICAO) - the UN's civil aviation arm - aims to replace the Tokyo Convention with the Montreal Protocol.

The new protocol, expected to come into force within two to three years, will give countries more teeth to deal with offences such as travellers refusing to comply with safety instructions and physically or verbally abusing cabin crew.

Singapore, which plans to enact its own laws before the global mandate, has consulted airlines operating at Changi Airport.

All support the initiative, according to a spokesman for the Civil Aviation Authority of Singapore. "The ability to take such law enforcement action would be a strong deterrence against unruly behaviour on board aircraft arriving in Singapore," she said. "This would enhance Singapore's status as a safe and secure air hub."

Mr Tim Colehan, assistant director for member and external relations at the International Air Transport Association (Iata), which represents global carriers, said there has been a rise in unruly behaviour on aircraft in recent years.

In 2014, airlines reported 9,316 incidents of such behaviour, or one for every 1,400 flights. From 2007 to 2014, the average was one per 1,530 flights.

In a survey by Iata, four out of 10 airlines said they have had to divert a flight in the last 12 months because of troublemakers.

Urging the ICAO and countries to move quickly to introduce tougher laws globally, Mr Colehan said that, in the meantime, airlines, ground handlers and even airport restaurants and bars can do their part.

For example, there are instances when bad behaviour is detected at check-in or during screening, and this is where ground handlers and security personnel can alert the airline, so it can make an informed decision on whether or not to accept the passenger for boarding.

SIA spokesman Nicholas Ionides said crew are trained to deal with potential cases of passengers who exhibit unruly behaviour.

"Some of these methods include politely declining drinks if the crew discerns that the passenger has had too much to drink," he said. "In extreme cases where passengers turn violent, our crew are also trained in appropriate ways to handle them."

Ground staff may also refuse boarding to passengers who have already displayed errant behaviour on the ground, in order to not compromise the safety and comfort of other travellers, he added.

Singapore Airlines Staff Union president and steward Alan Tan said: "The aim is always to defuse the situation but this is not always possible, so we do sometimes have to hand passengers to the local police after landing.

"But because of a lack of jurisdiction, police may not always be able to act except to issue a warning. This can be quite frustrating."

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

Road Traffic Act - Road Traffic (Public Service Vehicles) (Vocational Licences and Conduct of Drivers, Conductors, Trishaw Riders and Passengers) (Amendment No. 5) Rules 2016 (S 367 of 2016)

MAS directs bank to shut down in Singapore over serious breaches of anti-money laundering requirements

21 Jul 2016

Banks’ credit card scheme could help California Fitness clients get refunds

25 Jul 2016
Kelly Ng

SINGAPORE — A little-known clause called the chargeback scheme may offer a recourse for some California Fitness customers seeking refunds following the fitness chain’s closure.

Offered by credit card companies like Visa, MasterCard and American Express, the scheme allows cardholders to claim money back if the goods and services they paid for do not arrive or are faulty or if the merchant has gone bust.

Three out of five banks contacted by TODAY said those who have used their credit cards to buy California Fitness packages are entitled to refunds, subject to varying caveats and administrative requirements.

Affected customers holding OCBC Bank credit cards will have to submit a credit card dispute declaration form along with a copy of their membership contract and credit card statement displaying the transaction with California Fitness.

“OCBC Bank will then help them raise a dispute through Visa/MasterCard to the merchant’s bank under ‘services not rendered’,” said a spokesperson.

While the chargeback amount is limited to the time frame of services not yet utilised, those with lifetime memberships are entitled to a full refund, he added, as it is not possible to gauge each customer’s lifetime accurately.

For Citibank cardholders, there is a 120-day limit on claims, starting from the day of transaction. Cardholders requesting chargeback must also satisfy requirements such as providing the bank with “relevant documents”, it said.

DBS said its cardholders are entitled to chargebacks “in most cases”, if less than 18 months have passed since the day they entered into a contract.

DBS customers who have taken up instalment plans, however, are to seek recourse with the Small Claims Tribunal.

In its latest advisory on the episode, the Consumers Association of Singapore (Case) urged affected customers to ask for chargebacks, but said this applied only to those with “month-to-month membership packages”.

“Consumers who have purchased pre-paid or fixed-term membership should note that they may still be liable to make monthly repayments to the bank if the bank had already paid California Fitness in full,” said Case.

There are currently no regulations here governing chargeback protection. The Association of Banks and the Monetary Authority of Singapore do not have guidelines for disputed credit card transactions.

Chargebacks are often “internal arrangements” administered to varying extents by different financial institutions, noted Dr Gary Low from the Singapore Management University’s School of Law. “It all boils down to the allocation of risk,” he said.

“While I believe consumers ought not to bear the risk of liquidation especially when not told to them, I also wonder whether it should instead fall on the shoulders of credit providers.”

He pointed to foreign jurisdictions such as the United Kingdom, which has legislated that both the bank and the merchant are liable if things go south in consumer transactions.

Under the UK’s Consumer Credit Act, the credit provider is jointly liable with the retailer for faulty or undelivered purchases, provided the product or service costs between £100 and £30,000.

Lawyer Daniel Chia from Morgan Lewis Stamford said chargebacks are a “good idea” because they pass risk on to “parties best suited to bear the risk”, such as financial institutions: “That’s what regulators should be looking at to minimise public harm.”

One customer, who wanted to be known only as Jeremy, hopes that more can be done to help customers left in the lurch,

“To say ‘caveat emptor’ isn’t very fair because that depends on whether you have the information needed to assess the risk,” he said.

“Up to the point it closed down, California Fitness was still coming up with all sorts of promotional activities ... And you have banks coming in to offer plans that waive admin fees. That just induces people to sign up.”

Banks have played a “significant role” in offering packages and facilitating California Fitness’ schemes, said the 28-year-old lawyer, who paid around S$4,000 for a year-long membership and physical training sessions at the Novena outlet about one month before it shut.

“(Banks) cannot have their cake and eat it, where you just collect the fees without taking responsibility for the marketing activities,” he said.

“I hope the banks do something that is right and, going forward, that MAS steps in because quite clearly, this forms a significant part of unsecured credit, which it really needs to regulate.”

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Road Traffic Act - Road Traffic (Prescribed Offence under section 127A) (Amendment) Rules 2016 (S 366 of 2016)

Updated patent registry guidelines: criteria for allowing post-grant amendments in light of recent Singapore cases

21 Jul 2016

Banks 'unlikely' to pay phone scam victims

Straits Times
25 Jul 2016
Fabian Koh

Victims of phone scams who hand their money over to crooks impersonating bank staff are unlikely to be compensated, lawyers warned yesterday.

Last Monday, OCBC Bank reported a sharp rise in scams involving conmen impersonating its employees; around 30 customers are believed to have been duped, losing tens of thousands of dollars.

However, lawyers told The Straits Times that such victims would be liable for the money they lost due to the voluntary nature of the transactions.

"If they did so fully aware of the advice and warnings, then it becomes their responsibility," said Mr Rajan Supramaniam, a lawyer at Hilborne Law. "In helping with police investigations, the bank will provide all relevant information. But it will not compensate the victims for their losses..."

OCBC has lodged a police report about the scam and advised those who lost money to do the same.

DBS has also been affected, though POSB, Citibank, UOB and Maybank said they were not aware of any phone scams in which their staff were impersonated.

All the banks advised their customers not to reveal personal details or confidential information, such as PIN numbers, over the phone. They also urged customers to check the legitimacy of the caller, by calling the banks' main lines.

Mr Supramaniam explained to customers who have been cheated that the starting point for seeking legal recourse is to make a police report. "They can also pursue the issue with the bank, by going through a lawyer," he added. "I have handled cases involving a wrong transfer of money."

Mr Shashi Nathan, a partner at WithersKhattarWong, said that seeking compensation from the bank depends on the facts of each case. "The bank might have a protocol to check before any transactions are made, usually for larger amounts. Failure to follow such protocol means the bank was negligent to the customer, and the victim can make a claim for negligence."

He also explained that the bank and police both have to trace where the money went, and find the origins of the soliciting of information.

"Criminals these days are very sophisticated, and most of the time they are based outside of Singapore," said Mr Nathan. "It is especially hard to track due to the multitude of transactions."

All the banks advised their customers not to reveal personal details or confidential information, such as PIN numbers, over the phone. They also urged customers to check the legitimacy of the caller, by calling the banks' main lines.

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

Road Traffic Act - Road Traffic (Amendment No. 2) Rules 2016 (S 365 of 2016)

ACRA issues Enforcement Policy Statement

21 Jul 2016

Better guidelines needed for lifting of trading halts

Business Times
25 Jul 2016
R. Sivanithy

WHEN Indonesian coal miner Resources Prima Group (RPG) requested on Thursday last week for its trading halt to be lifted after the company announced it had received two legal letters of demand, the time for trading to resume was seven minutes later.

On June 7, when digital satellite firm AddValue Technologies submitted its request to lift its trading halt after announcing that a major asset sale that had been delayed more than two years looked like it was nearing completion, trading was to resume 14 minutes later.

On July 1, when beauty products maker Best World asked for its trading halt to be lifted after announcing it had been granted a direct selling licence in China, the time for trading to resume was 29 minutes later.

We could present more examples but the point should be obvious - there is no consistency in the timing of the lifting of trading halts. Is seven minutes sufficient, as in the case of RPG's announcement? Or should it be closer to 30 minutes, like Best World?

None of these companies breached any rules, we hasten to add, for the simple reason that there are none to breach. Companies today are free to ask for trading halts to be lifted with little or lengthy notice, creating what many observers feel is unnecessary uncertainty in the market.

When we first wrote about this more than three years ago ("Greater certainty needed when trading halts are lifted", BT, Hock Lock Siew, Jan 24, 2013), the example cited was air-con firm Natural Cool, which had submitted a request to the Singapore Exchange (SGX) to lift its trading halt 28 seconds after the request.

Like the companies mentioned earlier, Natural Cool did nothing wrong, but what if every trading halt is lifted only a few seconds following the filing of requests? If 28 seconds is OK, how about five seconds?

How reasonable is it to expect traders and investors to scan SGX's website every few seconds to see when halts are to be lifted?

Granted, most companies seem to allow an average of 15-30 minutes between the time they request that their halts be lifted and the actual lifting - arguably a reasonable and sufficient amount of time in today's market, given that investors usually would have had a few hours to digest the contents of the announcement that had prompted the halt in the first place.

But the absence of consistency and guidelines is troubling because in extreme cases, it could give an advantage to those lucky enough to have checked SGX's website at the exact time a company puts in its request for its trading halt to be lifted a mere few seconds later.

As we wrote in 2013: "It is much better to make sure all parties have equal opportunity to react to company announcements by coming up with clearer guidelines relating to when trading can resume, even if this means extending the period of the halt''.

One solution is to fix the times at which trading can resume, say, 9am and 2pm. A halt in the morning followed by an announcement that same morning automatically means trading will restart at 2pm; a halt in the afternoon and an announcement that same afternoon means trading will restart at the next available time, which is 9am the next day.

A better system is to require companies to state at the end of their announcements when they want their halts to be lifted. In other words, instead of companies having to put out three releases - a request for a halt, the announcement, then a request for the lifting of the halt - they need only make two: a request for a halt and the announcement which includes the time at which trading will resume.

Not only are two announcements administratively more efficient than three, this arrangement affords greater certainty to the market - everyone reading the announcements will know exactly when the halts are to be lifted. Which is not the case now.

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

Land Transport Authority of Singapore Act - Land Transport Authority of Singapore Act (Amendment of Fifth Schedule) (No. 3) Order 2016 (S 364 of 2016)

SICC releases first full judgment on liability

20 Jul 2016

A country's size, culture matter in its approach to international law

Straits Times
24 Jul 2016
Lydia Lim

Just as China may distrust Eurocentric rules, smaller states may want the added safety of laws

In September 2003, I found myself in the German city of Hamburg for a significant event in Singapore's legal history - the city state's first appearance before an international court.

Unhappy with Singapore's reclamation works off Tuas and at Pulau Tekong, Malaysia had launched legal proceedings against its neighbour, as provided for by the United Nations Convention on the Law of the Sea, or Unclos. This action, known as compulsory dispute settlement, was similar to that taken by the Philippines against China over the South China Sea. One difference was that while China refused to participate, Singapore took part and took pains to argue its case.

A three-day hearing was scheduled at short notice because Kuala Lumpur sought a stop-work order. I was one of two journalists sent to Hamburg to report on it; the other was from Malaysia.

The court in question was the International Tribunal for the Law of the Sea, also known as Itlos. It has 21 judges. I noticed that when the Singapore delegation arrived at the court, several of those judges greeted Ambassador Tommy Koh, Singapore's agent for the case, with great warmth and shook hands with him as though they were old friends.

I realised later that this might have been due to the important role Ambassador Koh played in the passage of Unclos, a landmark treaty negotiated over nine years to bring law, order and peace to the world's oceans and seas. He had presided over those difficult negotiations in their last three years, from 1980 to 1982, when Unclos finally became international law and set a new record by being signed by 119 countries on the first day it was open for signatures.

Unlike Ambassador Koh, I am not trained in international law. The reclamation hearing was my introduction to it. I would receive a deeper immersion five years later, in 2008, when I would report on Singapore and Malaysia's oral arguments in their territorial dispute over Pedra Branca, which went before the International Court of Justice at The Hague. That hearing took not three days but three weeks.

I saw up close Singapore's leading minds in public international law work flat out with colleagues from various other agencies, to defend, in the first case, Singapore's right to reclaim land in its own waters, and, in the second case, to continue its exercise of sovereignty over Pedra Branca. Ambassador Koh, then Deputy Prime Minister S. Jayakumar, then Chief Justice Chan Sek Keong and Judge of Appeal Chao Hick Tin were passionate about international law, as citizens of a small state have cause to be.

As Ambassador Koh explained in a recent commentary for The Straits Times, international organisations like the United Nations and international law have helped to create a safer and better world governed by laws, rules and principles. "It is a world," he wrote, "in which states, big and small, are held accountable for their actions towards other countries as well as towards their own citizens. It is, of course, true that great powers have often resorted to the use of force to achieve their political objectives. However, even great powers do not want to live in a chaotic and lawless world. They prefer to live in an orderly world.

"At the same time, they claim to have the right to act against the law of nations when their vital interests are at stake. Life is, therefore, a constant struggle between the rule of law and the rule of might. It is the ambition of small countries to strengthen the rule of law and weaken the rule of might. It is the aspiration of small countries to curb the unilateral use of force by the great powers."

Today, the two great powers that almost all small states have to engage with are the United States and China, both of which are active in the waterways around Singapore, namely the South China Sea. The current rules-based world order is largely an American construct, and accords with American norms in areas ranging from free trade to human rights to the use of force. China is, by contrast, a regime taker.

When it opened up to the world, it found that the international community it was joining was already well regulated. It realised it had to learn the rules of the game and play by them, said Professor James Li Zhaojie, for otherwise, there was no way it could communicate, trade or conduct relations with other nations, especially "these Western law-minded countries". The professor of international law at Beijing's Tsinghua University was speaking at a 2011 panel discussion organised by the University of Pennsylvania Law School on the question: Are superpowers above the law?

Still, there is the issue of trust, Prof Li said, as international law originated in the West and was, for a long time, Eurocentric. "And China was the underdog, victimised by this Eurocentric international law for more than a 100 years, ever since the Opium War of 1842. So... should China trust Western-oriented rules of law governing relationships among nations?" he asked, before adding that, by and large, "today China does feel that it is a beneficiary of the present international legal order".

But the differences between the US and China do not end there. The gap in their approach to international law can be seen in, for example, their differing views on military activity in an exclusive economic zone (EEZ), which extends 200 nautical miles out from a state's coast. During negotiations for Unclos, China had proposed that states should exercise some form of national security control over the waters in their EEZ, said Professor James Kraska of the US Naval War College during the panel discussion cited above. China's view was not accepted.

Now, having signed on to Unclos as a package deal, China knows that, by law, the US navy can operate in its EEZ but it nevertheless objects to such activities. Prof Kraska observed that "whereas the United States approach is very legalistic and black letter, the Chinese approach is much more of, it may be lawful but it's just not nice. It's rude and it's akin to a Peeping Tom looking in your window while walking along the sidewalk. There's nothing in the law that says you can't look in somebody's window as you're walking along the sidewalk... but it's just not nice and your neighbour doesn't like it. So I think that it gets to a difference of what global order ought to look like."

That cultural difference may also lie behind China's consistent rejection of the arbitral proceedings which the Philippines launched unilaterally, as allowed under Unclos' framework for compulsory dispute settlement.

It is significant that in the White Paper China issued the day after the arbitral award, it said on dispute settlement: "Based on an in-depth understanding of international practice and its own rich practice, China firmly believes that no matter what mechanism or means is chosen for settling disputes between any countries, the consent of the states concerned should be the basis of that choice." It also reiterated that it had held multiple rounds of consultations with the Philippines on proper management of disputes at sea and reached consensus on resolving them through negotiation and consultation. In other words, the Philippines' unilateral action, even if lawful, was not nice.

But even as China hopes for, and expects, other countries to be sensitive to its feelings, it must also appreciate that smaller states may feel they have no choice but to seek refuge in international law, which levels the playing field between them and a giant neighbour - especially one with a habit of flexing its muscles.

It is significant that in the White Paper China issued the day after the arbitral award, it said on dispute settlement: "Based on an in-depth understanding of international practice and its own rich practice, China firmly believes that no matter what mechanism or means is chosen for settling disputes between any countries, the consent of the states concerned should be the basis of that choice."

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

Bankruptcy Act - Bankruptcy (Amendment) Rules 2016 (S 363 of 2016)

You Can Run but You Can’t Hide: Storey, David Ian Andrew v Planet Arkadia Pte Ltd and others [2016] SGHCR 7

20 Jul 2016

Happily never after - again, proportion of 2nd divorces more than doubles

Straits Times
24 Jul 2016
Theresa Tan

Proportion of adults in S'pore who divorced at least twice more than doubles in past decade

More adults taking a second or even third shot at marriage are finding themselves unable to find happiness, and more of them are choosing to end their latest union in yet another divorce.

The proportion of men and women who divorced under the Women's Charter for at least a second time has more than doubled from 2005 to last year.

Last year, 513 men - who were previously divorced - also ended their latest marriage. This is more than triple the 153 men in similar situations in 2005.

This group of men who divorced for at least the second time comprised 9.5 per cent of the men who divorced last year - more than twice the 3.7 per cent in 2005.

The number of women with at least two ex-husbands is not far behind.

Last year, 463 women who ended their marriage had been divorced before, more than triple the 126 women in such situations in 2005.

These at least twice-divorced women made up 8.5 per cent of the women who divorced last year - almost triple the 3.1 per cent in 2005.

The Sunday Times calculated the numbers from the Statistics of Marriages and Divorces 2015 report, released by the Singapore Department of Statistics on July 13.

The at-least-twice-divorced data in this Sunday Times report refers to non-Muslim divorces. It also refers to those whose previous marital status was known, as there were some who did not state it.

Divorce lawyers and counsellors said the numbers have risen as more people are remarrying after a divorce, but more couples are also less tolerant of a lousy marriage or are reluctant to work through their marital woes.

Lawyer Michelle Woodworth, of RHTLaw Taylor Wessing, said: " It is becoming apparent that people are generally placing a higher premium on their own happiness and are less tolerant in a marriage which is not meeting their needs."

Besides, Singaporeans have become more casual about divorces and less fearful about being judged negatively by others for having had multiple divorces, lawyer Louis Lim of William Poh and Louis Lim said.

Those interviewed said that of their clients who have gone through more than one divorce, most have had two failed marriages. A small number divorced three times.

But one lawyer, who declined to be named, has a client going through his fourth divorce.

The man, a professional in his 50s, has a drug addiction problem and a violent temper and that could be why his marriages kept souring, the lawyer said.

What counsellors say these divorcees have in common is this: the tendency to blame their spouses for the unhappy marriage without realising their part in contributing to the marital breakdown.

So they repeat the same problematic behaviour or take their emotional baggage from their first marriage with them to their subsequent unions, which could lead to another split.

Mrs Juliana Toh, clinical director of the Counselling and Care Centre, said: "A marital breakdown is never due to just one person.

"If you don't make sense of your part in it, chances are you will repeat the same pattern of behaviour in your next marriage. You need to address the losses from your first marriage first."

Those interviewed also point out that some rush into a second marriage for various reasons. For example, they could be lonely and they want a new spouse to help them care for their young children.

After the honeymoon ends, they realise they are not all that compatible or the difficulties of a blended family with stepchildren and ex-spouses to deal with sink in.

The rising numbers also point to the challenges faced by those in second or subsequent marriages, such as the difficulties of step-parenting, sociologist Paulin Straughan noted.

To stem this trend of repeat divorces, counsellor Jonathan Siew of Care Corner Counselling Centre encourages remarrying couples to go for marriage preparation courses that will help them address the baggage from their first marriage and to prepare them for the challenges of the second one.

John (not his real name) is now wary of matrimony as he is going through his second divorce. He has no children.

The manager, 35, separated from his first wife after three years as they had drifted apart.

He put in "200 per cent" into his second marriage to a sales executive as he wanted to have children with her.

But he said she started picking fights with him and insisted on doing things her way after they tied the knot after a six-month courtship.

The final straw came when she insisted on renting out a room in their flat to two female colleagues. He reluctantly agreed.

Then she asked him not to live in their matrimonial flat, claiming it was inconvenient for her female friends to share a flat with a man.

He told her off. She refused to talk to him for over a year and he filed for a divorce.

John said: "I would be very careful about relationships and marriage from now on for all the heartaches and financial impact it involves."

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

Bankruptcy Act - Bankruptcy (Maximum Amount Payable in Priority under Debt Repayment Plan) Order 2016 (S 362 of 2016)

SCA: Facts or interpretations?

20 Jul 2016

Contractors seek review of public sector contracts and payment rules

23 Jul 2016
Amanda Lee

SINGAPORE — Contractors here want the authorities to review the laws for the industry to ease the settlement of payment disputes and to have a fairer allocation of risks to them.

The issue was raised by industry veteran, Dr Jimmy Koh, during a seminar held by the Singapore Contractors Association Ltd (Scal) on Thursday (July 21) that was attended by some 250 participants.

Industry players pointed to two areas that need review: The Public Sector Standard Conditions of Contract (PSSCOC) and the Security of Payment (SOP) Act.

Dr Koh, who has been a contractor for 52 years, said that there were several legislative requirements that the industry has to face, such as the Building Control Act, Workplace Safety & Health Act, Professional Engineers Act and Architects Act.
Contractors also have to struggle with contractual terms, in particular those listed in the PSSCOC and other conditions of contract in private sector projects.

As it is, the construction industry is “already beset with problems and disputes”, Dr Koh said.

These include “unrealistic contract periods, tight manpower resources, delays, defect, payments and shifting of blame and responsibilities from one party to another”.

The PSSCOC, which was first published in 1995, allows a common contract form to be used in all public sector construction projects, and Dr Koh said it is time that the laws be reviewed because there have been many changes in the industry.

“A lot of developments have taken place and it’s about time we take a relook at them to see how to revise these documents,” he added.

The SOP Act aims to improve cash-flow in the industry by giving parties the right to seek progress payment for work that has been completed, and by providing fast and low-cost adjudication to resolve payment disputes.

Dr Koh said that the Act is drafted in “legalistic language”, which have resulted in contractors engaging lawyers.

“The lawyers (also) make it so legalistic (it) becomes a court hearing for many months, and the purpose to ease cash flow is lost during the process,” he added.

On the PSSCOC, Dr Koh said that under the Building Control Act, for example, the engineer is supposed to carry out soil investigation before designing the building.

owever, the provision also states that the contractor is responsible for the verification of the accuracy of the soil investigation.

Since there is an overlap where two parties are responsible for the soil investigation, it could lead to disputes or delays in projects and litigations, he explained.

“It’s not to the advantage of the owner (of the project) because the owner eventually has to pay for the (soil) investigation and also the changes in the method of construction and the cost of the construction,” he added.

Scal president Kenneth Loo said that the association has set up two working groups comprising industry leaders who would advocate and propose changes to the PSSCOC and SOP Act.

These would then be submitted to the relevant authorities for their consideration.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Bankruptcy Act - Bankruptcy (Maximum Amount Payable in Priority in Bankruptcy) Order 2016 (S 361 of 2016)

SHC: Application for leave to continue action against an insolvent defendant: A balancing act

18 Jul 2016

MPs, lawyers call for more safeguards for consumers buying prepaid deals

23 Jul 2016
Kelly Ng

SINGAPORE — With consumers finding themselves at the losing end time and again when businesses fold — most recently, California Fitness — lawyers and Members of Parliament say more safeguards should be put in place for the sale of prepaid packages, though they acknowledged these safeguards should not go as far as to stifle enterprise.

Suggestions they threw up include making prepaid packages come with insurance coverage and capping the value of these packages, which can be written into the Consumer Protection (Fair Trading) Act (CPFTA).

Given that similar measures have been instituted in certain sectors — such as travel, motor and private education — there can be no argument against safeguards for consumers’ pockets on a pervasive scale, they noted.

Since California Fitness’ abrupt closure on Wednesday (July 21), nearly 400 customers have contacted the Consumers Association of Singapore (Case) to seek advice on getting refunds of membership fees paid to the multinational gym chain.

Noting that the episode shows that it is not just fly-by-night operations that put consumers at risk, lawyer Daniel Chia from Morgan Lewis Stamford said regulators must take on a greater role in mitigating the risks of pre-payment, which can run into thousands of dollars.

Avenues such as Case and the Small Claims Tribunal may not provide the most effective recourse while a class action suit may not make economic or logistical sense “if you are a small-time customer with a S$2,000 to S$3,000 claim”.
He added: “Because of that, I think the impetus is for regulators to come in harder on consumer protection.”

Both Mr Chia and Mr Alfred Lim from Quahe Woo & Palmer suggested requiring merchants to offer consumers the option of insuring themselves against unforeseen circumstances such as insolvency, citing how this was implemented in the travel industry in June last year under a licensing condition implemented by the Singapore Tourism Board.

Another way is to cap the value of prepaid packages, said Mr Chia, since merchants can lure customers into shelling out hefty sums through tie-ups with credit cards that offer instalment payments.

“Initially, the consumer may think it is S$100 a month. One year into the contract, the company goes bust. (This is) not a situation where the bank will stop (collecting) payment. That is when I think a lot of consumers will feel very aggrieved because they continue to pay for these services when they cannot use the gym anymore,” he said.

Member of Parliament (Mountbatten) Lim Biow Chuan, who is Case president, said the association has recommended the Ministry of Trade and Industry (MTI) amend the CPFTA to regulate the collection of prepayments as “we see more and more cases of businesses being liquidated after taking large amounts of deposits”.

“We are of the view that (consumer protection) is inadequate. We are seeing too many businesses failing and too many consumers losing their prepayments,” he added.

In response to TODAY’s queries, MTI said it will review the feedback on prepayment protection.

“There is a need to balance providing consumers with adequate protection and the increased cost for businesses, which may ultimately be passed on to consumers,” said the ministry’s spokesperson.

MP Liang Eng Hwa (Holland-Bukit Timah GRC), who chairs the Finance and Trade and Industry Government Parliamentary Committee, said ways to better protect consumers have to be looked at but he stressed that there is no “foolproof approach”.

“We do not want our business regulations to be so tight that it stifles promising enterprises who can genuinely provide value and good service.”

The argument cuts no ice with Mr Lim, who said: “Of course the balance is that it will make running a business more expensive. But why should businesses use consumers’ deposits to finance their business?”

Singapore Management University law professor Gary Low said that if a merchant knows it is heading towards liquidation, it should not hide this from prospective customers.

“(It) usually takes about five to six weeks for an order for winding up to be made, then, clearly, if (the merchant) does not disclose the fact ... it is pushing the risk of liquidation entirely onto (its customers),” said Dr Low. “Firms that are not unduly aggressive in their sales strategies do not fall afoul of the law ... The situation is somewhat different if the firm knows it is a ship taking in water or heading to choppy seas.”

For lawyer Amolat Singh, the maxim of “caveat emptor” is still the rule. He acknowledged, however, that California Fitness, as a reputed company, proved an “exception”.

“People must be mindful these episodes are part and parcel of life, like when accidents happen on the road ... It is hard to prescribe protection on these things ... Suggestions like insurance or security bonds may not guarantee that consumers get the better deal as costs may be passed on to them,” he said.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Bankruptcy Act - Bankruptcy (Fees) (Amendment) Rules 2016 (S 360 of 2015)

ACRA announces new initiatives for corporate service providers and extends time for private companies to update shareholder information for EROM

18 Jul 2016

Ex-remisier charged with breach of Securities and Futures Act

Business Times
23 Jul 2016
Claire Huang

[Singapore] AN ex-remisier has been charged with defrauding under the Securities and Futures Act - the first prosecution case by the Monetary Authority of Singapore (MAS) under the MAS-CAD (Commercial Affairs Department) joint investigation regime.

Malaysian Dennis Tey Thean Yan, 32, was on Friday charged with 18 counts under Section 201(a) of the Act.

He allegedly defrauded via market manipulation in 11 stocks provided by IG Asia Pte Ltd between Oct 2012 and Jan 2013.

The 11 securities mentioned in court documents are: Asia Power Corp, China Aviation Oil, China Energy, China Flexible Packaging Holdings, Delong Holdings, Full Apex Holdings, Li Heng Chemical Fibre Tech, Pan Hong Property Group, Sinostar Pec Holdings, Samudera Shipping Line and World Precision Machinery.

Tey is accused of entering fraudulent orders in these securities so as to artifically increase their best bid prices or lowering their best ask prices.

Court documents said this is so he could buy or sell the contracts for difference (CFD) at the artificially raised or lowered prices.

He is also accused of deleting the fraudulent orders in the securities after the purchase or sale of the CFDs.

The remaining seven charges state that Tey allegedly carried out similar market manipulation in seven securities provided by CMC Markets Pte Ltd.

The seven securities are: Bund Center Investment, China XLX Fertilizer, ECS Holdings, Guocoland, Manhattan Resources, Pacific Century and World Precision Machinery.

Tey faces a further five charges under Section 201(b) of the Act where he is accused of deceiving four firms - CMC Markets Singapore, IG Asia, DBS Vickers Securities and DMG & Partners Securities - by using the accounts of four individuals to buy and sell shares without authorisation between Oct 2012 and Jan 2013.

The maximum punishment on each charge is a fine of S$250,000 or jail term of seven years, or both.

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

Bankruptcy Act - Bankruptcy (Costs) (Amendment) Rules 2016 (S 359 of 2016)

ACRA issues Registrar’s Interpretations: Clarifying Companies Act provisions

15 Jul 2016

China Fibretech remains suspended, to engage lawyers to handle claims

Business Times
23 Jul 2016
Angela Tan

[Singapore] CHINA Fibretech, whose shares remain suspended from trading since Nov 30, 2015, said on Friday it will engage a law firm to handle the 466 million yuan (S$94.6 million) damage claims made by its customers.

The S-chip was replying to queries by Singapore Exchange (SGX) over the discrepancies between the 64.3 million yuan revenue generated in FY2015 and claims amounting to 466 million yuan.

Wu Xinhua, executive chairman and CEO of China Fibretech, said that "sales recorded in our books are processing fee only". He added that "the alleged claims amount is based on the costs of the claimants' end-products".

Trading in the company's shares had been suspended after its subsidiary, Shishi Simwa Knitting & Dyeing Co, received the damage claims from three customers in 2015 for products delivered in 2014 and early 2015.

The customers claimed to have suffered "substantial damages and financial losses" as a result of Shishi's products not meeting their specified requirements, causing decolourisation of their end-products.

In reply to SGX's query over why three unrelated customers made the claims on the same day, China Fibretech said two of the companies had been commissioned by another to process its apparels.

Since the claims were made, the company's representatives had visited the claimant's factories to inspect the products, and samples were extracted and sent to independent third parties for testing in March this year. These samples failed to meet the required standard.

On SGX's concerns over how the company's cash is safeguarded, China Fibretech said: "There is no indication that the company's cash is at risk at this point in time. Due to the uncertainty of the claims' outcome, the company will not make any payments in relation to the claims at this point in time."

China Fibretech said due to the uncertainties surrounding these claims, trading of its shares would be suspended until further notice to ensure a fair, orderly and transparent market.

SGX had previously warned investors in its Regulator's Column about China-based companies including those from the textile and sporting goods business, that were announcing adverse and significant changes in their financial positions, and where bank balances were duly affected.

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

Bankruptcy (Amendment) Act 2015 - Bankruptcy (Amendment) Act 2015 (Commencement) Notification 2016 (S 358 of 2016)

CCS consultation on amendments to penalty and enforcement guidelines: final opportunity to respond

15 Jul 2016

Come down hard on anti-competitive practices: Forum

Straits Times
23 Jul 2016

The report on July 15 ("Five suppliers of spare parts for HDB lifts under probe") stated that two years ago, the Competition Commission of Singapore (CCS) found EM Services (EMS) guilty of refusing to supply spare parts to third-party contractors.

Thirty years ago, when town councils were first formed and were being managed by EMS, it faced exactly the same problem. Almost all the HDB lifts at the time were installed and maintained by a Japanese firm.

The town councils found themselves at the mercy of the Japanese company, as it quoted high rates for maintenance and repairs. Third-party contractors could not come into the picture, as most of the critical parts were patented by the Japanese company and all spare parts had to be bought from it at high prices.

To break away from this monopoly, HDB started awarding lift contracts to other companies for its new flats, and EMS ventured into being a lift supplier and maintenance contractor.

As more third-party lift maintenance companies came into the picture, the major lift contractors, including EMS, faced competition, so they emulated the spare parts policy of the Japanese company.

It is hoped that CCS will come down hard on the lift contractors, if they are found guilty of creating barriers for competition to enhance their profits.

Ultimately, the ones who suffer the most are the HDB residents, as they would have to pay higher service and conservancy charges.

Ronnie Lim Ah Bee

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

Housing Developers (Control and Licensing) Act - Housing Developers (Amendment No. 2) Rules 2016 - Corrigendum (S 357 of 2016)

SIAC announces new arbitration rules 2016

13 Jul 2016

Singapore seizes S$240m in assets linked to 1MDB funds

Business Times
22 Jul 2016
Jamie Lee

[Singapore] SOME S$240 million in assets have been seized by the Singapore authorities who are investigating the fund flows related to 1MDB, with about half these assets belonging to the now-infamous Malaysian tycoon Low Taek Jho and his immediate family.

Singapore's Attorney-General's Chambers, the Commercial Affairs Department and the Monetary Authority of Singapore (MAS) said in a joint statement that bank accounts belonging to some individuals have been seized and dealings in properties belonging to some of them, curtailed.

The Penang-born entrepreneur was previously reported to have bought two units at the posh TwentyOne Angullia Park for S$54 million.

The authorities did not identify the owner of the remaining S$120 million in assets that were seized in Singapore's investigations, which began in March 2015.

Meanwhile, the MAS has rapped DBS, Standard Chartered Singapore and UBS Singapore for "control failings" linked to flows from 1MDB, the Malaysian government's strategic development company.

The joint statement by the three agencies came in response to the lawsuit filed this week by the US Department of Justice (DOJ) against the troubled 1MDB, seeking the forfeiture and recovery of more than US$1 billion in assets associated with "an international conspiracy" to launder funds related to the state investment fund.

The DOJ claimed that the 1MDB funds had been used to snap up expensive real estate in New York and Los Angeles, artworks by Vincent Van Gogh and Claude Monet and a jet aircraft. Money also allegedly went into funding the 2013 film, The Wolf of Wall Street; Malaysian Prime Minister Najib Razak's stepson is the chairman of the production house for the film.

The Singapore authorities said the 1MDB fund flows being investigated include those linked to Good Star Ltd (Seychelles), Aabar Investments PJS Ltd (BVI), Aabar Investments PJS Ltd (Seychelles) and Tanore Finance Corp (BVI). Previous reports had said Good Star was owned by Mr Low in its five years as a company. It received about US$1 billion from 1MDB - funds that were apparently meant to be directed to an energy-project investment with PetroSaudi; Good Star had earlier been thought to be a unit of the Saudi firm.

In addition, at least US$1.24 billion raised through a bond issue by a unit of 1MDB was allegedly transferred to a UBS bank account in Singapore held by Aabar Investments PJS. The money was meant for Abu Dhabi's International Petroleum Investment Company (IPIC), but IPIC has denied ownership of this Aabar Investments; IPIC has a subsidiary with the same "Aabar" name. The transfer had been done through BSI Bank in Switzerland; BSI Bank in Singapore has since been ordered to shut down.

As for Tanore Finance Corp, it was the alleged source of the US$681 million deposited into Mr Najib's accounts in 2013, ahead of the Malaysian general election in May that year; the money allegedly came through the Singapore branch of Falcon Private Bank, which is under probe by the Singapore regulators.

The authorities said many other individuals are still under investigation. Prosecutors have already charged ex-BSI banker Yeo Jiawei and ex-remisier Kelvin Ang. Yeo has been charged with, among other things, money laundering, cheating, forgery and obstruction of justice; prosecutors said Ang had, over two years, dealt extensively with Yeo and others implicated in "improper dealings".

The Singapore authorities said they have acceded to requests from several countries for assistance in questionable fund flows allegedly linked to 1MDB. They have also asked for information from countries where the funds originated or were subsequently sent.

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

Government Procurement Act - Government Procurement (Application) (Amendment No. 2) Order 2016 (S 356 of 2016)

[USA] The affirmation of the Open Internet rules in the US and its potential impact on net neutrality in the region

13 Jul 2016

MAS raps DBS, StanChart, UBS over 1MDB fund flows

Business Times
22 Jul 2016
Jamie Lee

It cites instances of control failings and weaknesses in processes for accepting clients and monitoring transactions

[Singapore] THE Monetary Authority of Singapore (MAS) has criticised DBS, Standard Chartered Singapore, and UBS Singapore for "control failings" linked to flows from Malaysia's embattled state fund 1MDB, and said it will take "decisive actions" against financial institutions used as conduits for these questionable fund flows.

More banks may be fingered in the days ahead as the 1MDB scandal widens its reach into Singapore's financial sector, even as MAS stressed that the lapses at the three major banks in the city-state did not point to pervasive weaknesses in control processes.

The central bank said its supervision of financial institutions with 1MDB-related fund flows revealed "a complex international web of transactions involving multiple entities and individuals operating in several jurisdictions". Its account echoed - and came on the heels of - the United States Department of Justice (DOJ) lawsuit claiming more than US$3 billion was allegedly misappropriated from 1MDB and laundered through US financial institutions.

In its preliminary censure of DBS, StanChart and UBS, MAS said there were instances of control failings and, in some cases, weaknesses in processes for accepting clients and monitoring transactions.

"There was also undue delay in detecting and reporting suspicious transactions," it said.

MAS said the deficiencies at the three banks were due to lapses in "specific processes and by individual officers".

"The lapses were serious in their own right, and will be met by firm regulatory actions against the banks. However, the inspections did not reveal pervasive control weaknesses or staff misconduct within these banks, unlike in the case of BSI Bank."

Swiss bank BSI (which was the custodian bank for some US$4 billion of funds invested by 1MDB) has already had its merchant bank licence stripped by MAS for serious breaches in anti-money laundering controls, poor management oversight, and gross misconduct by some staff.

BSI's clients include 1MDB, related entities, and Malaysian tycoon Low Taek Jho. About S$120 million in assets belonging to Mr Low and his immediate family have been seized by Singapore authorities.

DBS, StanChart and UBS said they are cooperating with the relevant authorities, and that they take anti-money laundering controls seriously. Responding to queries, they said they had voluntarily reported suspicious transactions to the authorities.

A DBS spokeswoman told The Business Times: "Egregious financial crime is highly sophisticated and intentionally designed to evade systems and controls. DBS has previously identified certain questionable activities and voluntarily reported these to the relevant authorities."

Meanwhile, MAS is still investigating Falcon Private Bank, but has (for now) said the Swiss bank failed to "adequately assess irregularities in activities pertaining to customers' accounts and to file suspicious transaction reports". The regulator is waiting for more details from Falcon's head office. Falcon has said it will cooperate with the Singapore authorities.

MAS also censured licensed remittance agent Raffles Money Change Pte Ltd, saying it failed, among other things, to verify the authenticity of remittance instructions.

The statement from MAS confirms earlier reports that top banks here have been rounded up by the regulator for large-scale investigations into the scandal, with global regulators probing the vast web of illicit fund flows. MAS has, until now, mostly sidestepped directly naming 1MDB as the subject of investigations.

1MDB (1Malaysia Development Bhd) was set up by Malaysian Prime Minister Najib Razak in 2009. The Wall Street Journal reported last July that some US$700 million from the investment fund had been allegedly siphoned into Mr Najib's personal bank account - a charge he has consistently denied for the past year.

MAS said it has been examining banks on their exposure to 1MDB-related fund flows since March 2015.

It has conducted detailed onsite inspections, and analysis of information obtained from regulators abroad. And its examinations "revealed extensive layering of transactions and subterfuge aimed at disguising the nature of certain activities and fund flows".

"In some instances, shell or unauthorised companies domiciled in various jurisdictions were used to conceal the true beneficiaries of the funds," it added.

Meanwhile, the US DOJ has claimed that, from 2009 to 2015, 1MDB officials conspired to misappropriate and launder billions of dollars from 1MDB through a "complex web of opaque transactions".

"1MDB was created by the Malaysian government to promote economic development through international partnerships and foreign direct investment, with the ultimate goal of improving the wellbeing of the Malaysian people," it said in its statement. "Unfortunately, a number of corrupt 1MDB officials treated this public trust as a personal bank account."

The DOJ lawsuit referred to fund transfers to a "Malaysian Official 1" - a high-ranking official in the Malaysian government who also held a position of authority in 1MDB.

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

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Introduction of sustainability reporting “comply or explain” requirement by SGX

12 Jul 2016

High Court cuts short neighbours' tree dispute

Straits Times
22 Jul 2016
Selina Lum

Judge rejects woman's plea to appeal against lower court's order to trim the tree's branches

The High Court has put a stop to a dispute between affluent neighbours over an old raintree in the posh Astrid Hill district.

"There is no one who wins when neighbours go to war. There is therefore no merit in letting this case incur any more court time when cases with greater social issues are waiting in line," said Justice Choo Han Teck.

The judge said this in a written judgment, published yesterday, as he rejected Ms Shi Ka Yee's request for permission to appeal against a lower court decision ordering her to pay $9,800 in damages to her neighbour and trim the tree's branches.

Ms Shi was sued by Mr Nasrat Lucas Muzayyin and his wife Priscilla Goh, following a conflict over the overhanging branches of the tree on Ms Shi's property.

The couple, who moved into Astrid Hill in 2014 with their young daughter, worried about the dangers of dead branches falling from Ms Shi's tree, which extended into their front yard. Attempts to seek her consent for the overhanging branches to be pruned fell through.

On the morning of Feb 17 last year, workers hired by the couple arrived in a truck with a cherry picker and started work.

Ms Shi drove to the Muzayyins' front gate and blasted the horn of her Porsche before she went into their house and swore at the family. She then took the keys from the truck's ignition, leaving a worker stranded in the cherry picker.

The couple sued her for nuisance, trespass and assault. Last month, District Judge Chiah Kok Khun ruled in favour of the couple. He ordered Ms Shi to trim the branches by June 28, but granted a temporary stay pending her application to the High Court for permission to appeal.

Her lawyer, Senior Counsel Francis Xavier, argued that the tree was protected by law and she cannot be blamed for refusing consent. But the couple's lawyer, Mr Christopher De Souza, argued that the law allows protected trees to be cut if its condition posed an immediate threat to life or property.

Justice Choo found that Ms Shi had not proved that the tree was protected; even if it was, the law must be interpreted sensibly as it is "common knowledge that trees need trimming". This dispute should not have involved so many lawyers and so much time in court, he added.

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

Shi Ka Yee v Nasrat Lucas Muzayyin and another [2016] SGHC 138

Legal Profession Act - Legal Profession (Qualified Persons) (Amendment) Rules 2016 (S 354 of 2016)

Technology, media and telecommunications quarterly regional update: Halftime Highlights

12 Jul 2016

The great powers and the rule of law

Straits Times
22 Jul 2016
Tommy Koh

It is in the interest of both small states and great powers to abide by international law

Professor Graham Allison is a brilliant scholar. He is currently the director of the Belfer Centre for Science and International Affairs at the Kennedy School of Harvard University. He had served previously as the dean of the Kennedy School. On July 16, this newspaper published an article by him entitled "Heresy to say great powers don't bow to international courts?"

He concluded that: "It is hard to disagree with the realists' claims that the Law of the Sea tribunals, the International Court of Justice and the International Criminal Court are only for small powers. Great powers do not recognise the jurisdiction of these courts - except in particular cases where they believe it is in their interest to do so."

Prof Allison also quoted, with approval, Thucydides' summary of the Melian mantra - "The strong do as they will; the weak suffer as they must..."

Thucydides lived in Athens in the 5th century BC or about 2,500 years ago. He wrote masterfully about the Peloponnesian War (431-404BC) between Athens and Sparta. His conclusion that "it was the rise of Athens and the fear that this inspires in Sparta that made war inevitable" is often referred to as the Thucydides Trap.

The first point I want to make in response to Prof Allison is to point out that we do not live in Thucydides' world. We live in the 21st century. The world in which we live is fundamentally different from the world of the ancient Greeks.

My second point is to refer to an event which has brought about revolutionary changes in the world. I refer to the Peace of Westphalia which took place in 1648. The peace treaties concluded in Westphalia brought an end to 30 years of war in the Holy Roman Empire and 80 years of war between Spain and the Dutch Republic.

The historical significance of the Peace of Westphalia is that it created a new political order in central Europe based upon the concept of the coexistence of sovereign states. A norm was also created against interference in the domestic affairs of another state. We can say that the concept of the sovereign state, which is central to international law and the world order, owes its origin to the Peace of Westphalia.

Third, I wish to refer to the founding of the United Nations in 1945 and the revolutionary character of the UN Charter. The UN Charter has created a new and a better world. For example, it recognised the right of people to self-determination and independence from their colonial masters. It created an organisation in which all states, big and small, are entitled to one vote. The Charter's objectives include the development of international law, the protection of human rights, the prevention of war and the promotion of economic and social progress. It prescribed that disputes should be settled peacefully and force can be used only in accordance with the Charter.

The UN is certainly an imperfect organisation. However, it has helped to create a safer and better world. It is a world governed by laws, rules and principles. It is a world in which states, big and small, are held accountable for their actions towards other countries as well as towards their own citizens. Unlike the world of Thucydides, great powers cannot do as they wish and small countries must suffer in silence. It is, of course, true that great powers have often resorted to the use of force to achieve their political objectives. However, even great powers do not want to live in a chaotic and lawless world. They prefer to live in an orderly world. At the same time, they claim to have the right to act against the law of nations when their vital interests are at stake. Life is, therefore, a constant struggle between the rule of law and the rule of might. It is the ambition of small countries to strengthen the rule of law and weaken the rule of might. It is the aspiration of small countries to curb the unilateral use of force by the great powers.

Fourth, as a small country, Singapore has worked with other like-minded countries to strengthen the rule of law. At the UN, Singapore has a consistent record of defending the principles of the UN Charter and standing up against countries which have violated them.

Thus, Singapore opposed Indonesia's invasion of Timor Leste in 1975, Vietnam's invasion of Cambodia in 1978, the Soviet Union's invasion of Afghanistan in 1979, the US invasion of Grenada in 1983 and Iraq's invasion of Kuwait in 1990.

Contrary to the realists' belief that power and force will always prevail over law and justice, I would point out that in all the five cases, the aggressor failed to achieve its objective and eventually withdrew.

Fifth, the World Trade Organisation (WTO) is a very important international organisation. It was founded in 1948 as the General Agreement on Tariffs and Trade (Gatt). Under Gatt, dispute settlement was voluntary and not mandatory. In 1995, Gatt was reincarnated as the World Trade Organisation. Unlike Gatt, under the WTO, dispute settlement is mandatory and not voluntary.

The good news from WTO is that in 90 per cent of the cases, including those involving the great powers, including China, the losing parties have complied with its decisions. Why do the great powers choose to comply? Because it is in their enlightened self-interests to do so. I personally chaired a dispute panel in 2000 to consider a complaint brought by Australia and New Zealand against the United States, alleging that the latter had violated its obligations under the WTO's Safeguards Agreement. The panel unanimously found in favour of Australia and New Zealand. The US appealed to the Appellate Body but was unsuccessful. In the end, the US complied with our decision.

Sixth, I will now briefly review the records of France, the United Kingdom, Russia and the US on their compliance or non-compliance with the rule of law. Let me begin with France.

In 1953, France and the UK brought their dispute over Minquiers and Erehos to the International Court of Justice (ICJ). France lost the case and complied with the court's decision.

In 1973, Australia and New Zealand brought a case to the ICJ against France to stop its nuclear tests in the South Pacific. The court issued an injunction for France to stop the tests. France carried out two more tests before stopping. In 1974, the court decided that it was unnecessary for it to issue its final judgment as France had agreed to stop further testing in the South Pacific.

In 2000, Seychelles brought a case against France to the International Tribunal for the Law of the Sea (Itlos). The dispute involved the quantum of a bond which France had imposed for the release of a Seychelles-registered ship, Monte Confurco. France had imposed a bond of 56,400 francs. Itlos reduced the amount to 18,000 francs. France complied with the tribunal's decision.

In 2001, Ireland unilaterally initiated arbitral proceedings against the UK regarding a MOX plant. The UK argued that the tribunal had no jurisdiction. The tribunal ruled that it had jurisdiction and the UK did not withdraw from the arbitration. The tribunal ordered the two countries to cooperate, to monitor the risks of the plant to the Irish Sea and to prevent pollution of the marine environment. The two parties agreed to cooperate and Ireland withdrew the case.

Last year, Mauritius instituted arbitral proceedings against the UK regarding the Chagos Marine Protected Area which the British had proclaimed in the Indian Ocean. Prof Allison has misunderstood the award of the arbitral tribunal. The issue in dispute was not the legality of the marine protected area but the failure of the UK to consult with Mauritius. The tribunal required the two parties to enter into negotiations on the protection of the marine environment in the Chagos Archipelago.

In 2007, Japan brought a case against Russia to Itlos for the release of a ship, Hoshinmaru, which had been detained by Russia. Japan complained that the bond imposed by Russia of 22 million roubles was excessive. Itlos ruled that the bond should be reduced to 10 million roubles. Japan paid the amount and Russia released the ship.

In 2013, the Netherlands unilaterally initiated proceedings against Russia concerning the arrest of a ship, Arctic Sunrise, and the detention of its crew. The Netherlands requested Itlos to order Russia to release the ship and the crew. Russia rejected the jurisdiction of Itlos and refused to participate in the proceedings. The tribunal proceeded in the absence of Russia. The tribunal ordered Russia to release the ship and its crew upon the posting by the Netherlands of a bond of €3.6 million. Three months after the ruling, the crew was released and the ship was released after another three months. Russia insisted that it was acting in accordance with its domestic law and not the ruling of Itlos.

At the end of World War II, the US had a vision. It wanted to replace a world of chaos and conflict with a new rules-based world order. The US led the way in the development of international law to limit the use of force, to protect human rights, to promote free trade and an open world economy. The world in which we live, the institutions of governance, the laws and rules are largely inspired by that American vision.

In recent decades, however, several US administrations seemed to have turned their back against their own creation. Invoking the mantra of American exceptionalism, the US has refused to ratify treaties it has signed, withdrawn from some others and violated some by which it is bound. Unlike his predecessors, however, President Barack Obama has tried to bring the US back to its historic position of upholding international law.

Prof Allison was right in referring to the Nicaragua Case as an example of how the US had ignored the decisions of international courts and tribunals. He did not, however, mention that President George H. W. Bush changed his administration's policy towards Nicaragua. He instituted an aid package of US$500 million for Nicaragua. Recently, the US paid Iran US$278 million (S$376 million) to settle a claim before the Iran-US Claims Tribunal. In 1996, the US paid US$61.8 million to Iran to compensate for the victims of the downing of Iran Air 655 by the USS Vincennes in 1988.

I shall conclude. We live in an imperfect world. All countries, big or small, wish to live in a peaceful and stable world. We all aspire to live in a world governed by law rather than by force. Do the great powers abide by the rule of law? The record is a mixed one. However, it would not be wrong to say that, most of the time, they do comply with international law and the rule of law. They do so not because of idealism but because it serves their interests.

As great powers, they help to shape our institutions and formulate our rules. Their interests are better served by a world of order rather than a world of anarchy. It is therefore incorrect for Prof Allison to say that the international legal institutions for dispute settlement are only for small powers.

  • The writer is chairman of the Governing Board of the Centre for International Law of NUS.

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

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Remission of stamp duty on certain conveyance directions – Licensed housing developers

12 Jul 2016

Swab from woman not tested due to mix-up

Straits Times
22 Jul 2016
Selina Lum

Medical examination of alleged victim also did not detect any bleeding or external injuries

A vaginal swab taken from a woman who was allegedly raped by her biological son was never tested for semen because of a mix-up.

The High Court heard this on the sixth day of an ongoing rape trial which, so far, has not thrown up conclusive physical evidence against the accused.

The 33-year-old man is charged with raping and molesting his mother, 56, after he returned home at about 2.30am on Oct 4, 2013.

He is the second of the woman's three sons from her first marriage, and lived with her and his stepfather in a one-bedroom flat.

His lawyer said earlier that his mother and stepfather had conspired to accuse him of rape, in a bid to make him leave the flat.

Yesterday, Singapore General Hospital (SGH) gynaecologist Tan Wei Ching testified about her medical examination of the woman, just hours after the alleged rape.

The issue of the vaginal swab taken from the woman to test for semen arose when Dr Tan was questioned by defence lawyer Andy Lem about an e-mail sent by the Health Sciences Authority (HSA) in May 2014 asking about the whereabouts of the swab.

Dr Tan said that the swab, which was placed in a wet container, was sent from SGH to HSA on Oct 4 - the day of the alleged rape and the day the swab was taken - but was rejected by HSA as it was in an "inappropriate medium".

Three days later, the swab was returned to SGH's accident and emergency (A&E) department. But Dr Tan said she was unaware of this.

Further investigations showed that after receiving the swab, SGH's A&E department forwarded it to the hospital's microbiology laboratory.

Mr Lem said it was "a bit surprising" that Dr Tan was notified by HSA only about six month's later, in May 2014. "I'm surprised too," she replied. Dr Tan was not asked in court why the swab was placed in a wet container.

On the first day of the trial, a DNA analyst from HSA had testified that it was the practice to use dry containers as moisture could contaminate the swab.

Dr Tan was also questioned about her examination of the alleged victim. In her report, Dr Tan said she did not detect any bleeding, open wounds, bruising or lacerations on the woman's body.

Mr Lem suggested that, given the woman's account of the sexual assault, it was more likely than not that she would have suffered physical injuries. Dr Tan said it was possible but said the absence of injuries did not mean that the assault did not take place.

Gynaecologist Tan Wei Ching said that the swab, which was placed in a wet container, was sent from SGH to HSA on Oct 4 - the day of the alleged rape and the day the swab was taken - but was rejected by HSA as it was in an "inappropriate medium".

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

Housing and Development Act - Housing and Development (Precincts for Upgrading Works) (Home Improvement Programme) (No. 3) Order 2016 (S 352 of 2016)

Singapore and the Brexit effect

08 Jul 2016

Bankrupt jailed 7 years for cheating duo out of $2.4m

Straits Times
22 Jul 2016
Amir Hussain

A 48-year-old unemployed trickster cheated two men, including his friend of nine years, out of a total of $2.36 million and used the money to pay off his debts to loan sharks and fund a lavish lifestyle, including renting a BMW vehicle for $300 a day.

Yesterday, Don Brendan Robert was jailed for seven years, having earlier pleaded guilty to 25 out of 450 charges of cheating. The remaining 425 counts were taken into account during sentencing.

A district court heard that in August 2011, Robert, an undischarged bankrupt, lied to his friend, Mr Alan Lye Cher Kang, 44, that he was the beneficiary of an inheritance from his late father.

Robert had met Mr Lye in 2002, when they were involved in a gold brokering business. Mr Lye is a contractor in the business of constructing, fabricating and installing aluminium and glass works.

Robert said the inheritance money had, however, been seized by the Government and was frozen by the police's Commercial Affairs Department (CAD). He lied that various processing fees and administrative charges had to be paid in order to release the supposedly frozen funds.

For the next three years, until August 2014, Robert came up with tall tales for his friend. He told Mr Lye various stories about purported dealings with several banks such as DBS, United Overseas Bank, OCBC and Citibank; government agencies such as CAD and the Inland Revenue Authority of Singapore; and other entities such as the Commissioner of Oaths and insurance companies.

Robert asked his friend for help in making payments for various processing fees and administrative charges. In return, he promised Mr Lye a portion of his inheritance when it was released.

Mr Lye transferred about $175,000 to Robert until May 2012, when he ran out of money to help his friend, having already borrowed from other friends and relatives.

In June 2012, Mr Lye turned to his friend Bay Lim Piang, a 65-year-old retiree and former businessman, whom he had known since 2000.

Between that month and August 2014, Mr Lye transferred $2,182,926 - all from Mr Bay - to Robert.

Robert even told Mr Lye to tell Mr Bay, who used to be in property development, that he could manage the inheritance properties left behind by his late father. Robert also said Mr Bay would be paid a token sum, once the frozen funds were released.

Deputy Public Prosecutor Muhamad Imaduddien asked for a stiff sentence for "an unscrupulous trickster", noting that Robert was motivated by greed and all the money he cheated went towards paying his debts and living it up - in addition to renting the car, he rented a room from a friend in Wak Hassan Drive for $1,200 a month.

The prosecutor also noted, among other things, that Robert's crimes were premeditated and deliberate.

Robert has not paid back any money to Mr Lye or Mr Bay.

His sentence was backdated to November 2014, when he was remanded.

He could have been jailed for 10 years and fined for each cheating charge.

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

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[EU] Investing in Europe: What do Europe’s new market abuse rules mean for investors?

08 Jul 2016

Identity theft by brother lands him in big trouble

Straits Times
22 Jul 2016
Adrian Lim & Seow Bei Yi

Older brother gets more jail time after mix-ups over the years cause younger sibling much grief.

In the last five years, he has been wrongfully arrested while trying to leave Singapore, summoned to court to pay a $15,000 bail he did not put up, and had his identity fraudulently used to apply for jobs.

Mr Mohammad Rizal Mohd Sabri, 27, a delivery rider, has had to explain himself time and again to the authorities - because his older brother had been impersonating him.

While his sibling Muhammad Redzuan Mohd Sabri, 28, had been sentenced to jail last year for the impersonation offences, it did not spell the end of trouble for Mr Rizal.

On Wednesday, Redzuan pleaded guilty in court to three new charges, with three others taken into consideration. The charges include impersonating Mr Rizal to change his SingPass password, and applying for duplicate driving licences.

Redzuan, who was on the same day sentenced to eight months' jail, was also found to have misappropriated $700 from a courier company he worked for - a crime which resulted in Mr Rizal being arrested at the Woodlands checkpoint in January. He was transferred to the Bedok Police Division and questioned before being let off.

Mr Naresh Kumar Maryapan, the director of the courier firm, Saiwah Enterprise, said he verified through police photographs that they had arrested the wrong person. He added: "The man who took the $700 had applied for a job using a photocopy of Mr Rizal's NRIC and a driving licence made in Mr Rizal's name."

While Redzuan will go to jail again - he has already served a 17-month sentence and been fined $700 for various offences - the mix-ups over the years have caused Mr Rizal much grief.

Redzuan has impersonated his younger sibling on over a dozen occasions over four years.

"My reputation was tarnished," said Mr Rizal.

Redzuan began impersonating his younger brother in 2011, lodging a police report to say that he lost a wallet, NRIC and driving licence. Redzuan used this report to identify himself as his brother, to further his "impersonation exploits", court documents read. A year later, he took Mr Rizal's driving licence. Mr Rizal told police that his military identity card and a photocopy of his NRIC also went missing.

Redzuan found employment in 2013 as a delivery driver in two different companies and registered a mobile phone line in Mr Rizal's name - racking up a bill of over $1,300. In 2014, Redzuan used a photocopy of Mr Rizal's NRIC to post a $15,000 bail for an accused person. Mr Rizal said he was shocked to be summoned to court when the accused person, whom he does not know, jumped bail. That year, Redzuan also made his brother take the rap after he was caught driving a lorry without a licence.

The incidents have soured their relationship. Mr Rizal said with a sigh: "We don't talk any more. He has caused me a lot of trouble."

He cannot change his identification number, but Mr Rizal plans to change his name in September to stop his identity from being misused.

Security experts said Mr Rizal's case illustrates the need for individuals to safeguard their personal information, like NRIC numbers and identity cards, which can be misused if they fall into the wrong hands.

Mr T. Mogan, managing director of Dragnet Private Investigation and Security Consultants, said: "If you suspect that you are a victim of identity theft, immediately go to the police and let them know to whom and when you divulged your personal information ."

Mr David Ng, director of DP Quest Investigation Consultancy, said that as a driving licence bears the same identification number as an IC, many banks and authorities accept it as a valid form of identification. "Checks by service providers may not be stringent enough."


My reputation was tarnished... We don't talk any more. He has caused me a lot of trouble.

MR MOHAMMAD RIZAL MOHD SABRI, on how his older brother's impersonation offences have soured their relationship

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Latest developments: Securities and futures; competition law; litigation and dispute resolution; tort; real estate

08 Jul 2016

Road map for Singapore debt-restructuring hub

Straits Times
21 Jul 2016
Geraldine Goh

Panel hands recommendations to Govt on enhancing framework

Sweeping reforms are on the table as part of moves to strengthen Singapore as a centre for debt restructuring, which involves helping troubled companies renegotiate their debts.

The Government, which wants Singapore to grab a bigger slice of what is a fast-growing business, was handed a road map yesterday in the form of 17 recommendations from a review committee. Its proposals fall into three key areas.

One involves enhancing of Singapore's legal framework for restructuring by creating customised rules and procedures.

This includes a specialist insolvency Bench for restructuring cases comprising both Singapore and international judges.

The committee also recommended that the Singapore International Arbitration Centre and the Singapore Mediation Centre develop rules for insolvency and restructuring. It also proposed increasing the availability of rescue financing and strengthening the insolvency profession through multidisciplinary training.

The 17-member committee, which comprised lawyers, insolvency and other financial professionals, and Monetary Authority of Singapore officials, wants to attract distressed debt financiers and specialists to Singapore.

It also wishes to raise international awareness of Singapore's restructuring regime and capabilities through increased involvement in international insolvency organisations and research.

Committee co-chairman Indranee Rajah said commercial laws would be modernised to implement the recommendations and proposals. New legislation to strengthen the legal framework is likely to be presented to Parliament within the next six to nine months in the form of a new Omnibus Insolvency Act.

Ms Rajah, who is also Senior Minister of State for Law and Finance, said Singapore has a trusted judicial system which gives the country an advantage when offering debt-restructuring services.

"Singapore can be a global debt-restructuring centre like New York or London," she noted during a briefing yesterday.

"International arbitration has been going on for many years. Building Singapore to be a global services hub, we need lawyers, accountants and financiers as well to create a buzz of activity.

"We need to generate a new type of rescue financing with the injection of new money.

"Even though the global economy is sluggish, Asia will be the fast-growing place where more economic activity is going forward with more cross-border activity. We can build an economy that can supply this service to the region."

Ms Rajah said the committee, which started work in May last year, had reviewed Chapter 11 of the United States Bankruptcy Code which prevents creditors from winding up a financially distressed company while it attempts to find ways to restructure its debts.

Committee member Manoj Pillay Sandrasegara believes the introduction of the Omnibus Insolvency Act containing the new recommendations is the right step in establishing Singapore as Asia's pre-eminent debt-restructuring centre.

Mr Sandrasegara, a partner at WongPartnership, said the new regime will provide for an automatic moratorium of 30 days to provide time for the company to undertake restructuring efforts.

Two cases involving insolvency and debt restructuring


One of the more complex debt restructuring cases is that of the China Fishery Group, a Singapore-listed company involved in fishmeal and fish oil production. Negotiations on its debt restructuring could take between six months and two years. Discussions have to take place between creditors and the company on cash and company receivables, among other matters.


Berlian Laju Tanker (BLT), a liquid bulk cargo firm listed on the Singapore and Indonesian bourses, sought a moratorium from the Singapore court against creditors while it restructured its debts. Petitions were presented in the US courts seeking recognition of the Singapore proceedings under Chapter 15 of the US Bankruptcy Code. The US courts granted an interim injunction against all enforcement against BLT's vessels by creditors.

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Silver Support Scheme Act 2015 - Silver Support Scheme Act 2015 (Commencement) (No. 2) Notification 2016 (S 349 of 2016)

Enhancing the Med-Arb process in Singapore: Lessons from the commonwealth and beyond

04 Jul 2016

Courting diversity?

Straits Times
21 Jul 2016
K.C. Vijayan

Singapore has appointed its first woman judge to the Court of Appeal. There are more women judges now. But might the Bench benefit from even more diversity - such as more senior talent from the Bar, rather than the public and academic spheres?

The appointment last month of Singapore's first woman as a permanent judge of the Court of Appeal, Justice Judith Prakash, comes at a time when the United Kingdom is poised for a shake-up to ensure gender equality on the Bench.

In Britain, there appears to be only one woman on the Supreme Court of 12 justices, and just eight out of 38 appeal court judges are women.

Last October, the Lord Chief Justice, Lord Thomas of Cwmgiedd, was reported to have said that "too few" women lawyers reached the top of the UK's judiciary and called for a diverse judiciary that was important to both public confidence and fairness.

Here in Singapore, Justice Prakash's elevation from the High Court to a Judge of Appeal of the Supreme Court comes some 50 years after the late Jenny Lau Buong Bee was made Singapore's first woman district judge.

And it is 25 years after Justice Lai Siu Chiu, now retired and reappointed as a senior judge, became the first female Supreme Court Judge here.

Given that Justice Prakash was first appointed as a judicial commissioner in 1992, and a High Court judge in 1995 - and furthermore, has sat as an occasional judge in the Court of Appeal since 2002 and more frequently for the past two years - it might be argued that she could have been appointed to the Court of Appeal earlier.


During her career, Justice Prakash has specialised in complex commercial cases, arbitration, company and trust law. Before becoming a judge, she was in practice for 18 years.

One case that many remember her for was in 2004 involving breach of contract. Justice Prakash, who sat as a judge in the Court of Appeal alongside Justice Chao Hick Tin, together with the latter outvoted then Chief Justice Yong Pung How who had dissented, and allowed the appeal of Asia Hotel Investments against Starwood Asia Pacific Management.

While she is married with grown-up children, the high-flier nevertheless remarked at a 2014 Singapore Management University forum about women and career success, titled Can Women Lawyers Have it All?: "If you don't want to have children, you can go as far as any man can go because the law can be such a demanding mistress, whether you are a litigator or not.

"If you want to have children, then you have to give up a little bit of your career. You might have to move to a different area of practice that makes fewer demands on you, or you limit the number of children that you have."

The issue of representation of women in the judiciary amid the juggling act of family demands has reared its head in Britain, where The Times of London reported that the Supreme Court there is set to overhaul its system of judicial appointments. Women candidates are tipped to fill the post of chief justice and president of the Supreme Court when they are vacant next year.

However, gender equality in the judiciary here, it would seem, is not such a burning issue as in the UK, given that more women judges are now fast emerging. Five female judges have been appointed to the Supreme Court in the last two years - including the latest due next month - compared with only three women judges in the 23 years prior to 2014.

Furthermore, together with last month's announcement of Justice Prakash's rise to the apex court, two new judicial commissioners were named and include a woman: Ms Audrey Lim, who is deputy chief legislative counsel in the Attorney-General's Chambers (AGC). A judicial commissioner has the powers of a High Court judge and is appointed for a specific period determined by the President.

The latest appointments will take effect next month.


Justice Prakash's "first woman" achievement, while a landmark in itself, prompts a further question: Is there a need for greater diversity in Singapore's judicial composition?

For example, Ms Lim's fellow appointee is Mr Pang Khang Chau, who is also from the AGC. Is the talent pool from which to select judges, especially from the Bar - practising lawyers who appear in court or are involved in litigation work - too limited?

Since Justice Vinodh Coomaraswamy, then a partner in law firm Shook Lin & Bok, was appointed to the Bench in 2012, out of 12 subsequent Bench appointments, only one hailed from the Bar. This is Judicial Commissioner Kannan Ramesh, previously managing partner at law firm Tan Kok Quan Partnership, where he specialised in dispute resolution, insolvency and restructuring, and international arbitration. Three others, being from the corporate side, are not from the Bar, and one has returned to practice. Two others are from academia and another, Judicial Commissioner Chua Lee Ming, was general counsel at GIC before he joined the Bench. The rest are from the public sector.

Needless to say, all are legal luminaries with distinguished backgrounds. Indeed, Chief Justice Sundaresh Menon, as president of the Legal Service Commission, said in its 2014 annual report issued in July last year that "...the Legal Service now constitutes an unprecedented pool of legal talent, not just in depth but also in diversity".

Still, the UK system, with its learned and long heritage, is clearly troubled by the issue of diversity, going by the recent moves there.

In Singapore's context, however, it is arguable whether judges coming from either the public or private sector makes a difference, and how this background might even manifest itself, such as in the content of the judgments.

Lawyers do point out, though, that many judges in other developed Commonwealth jurisdictions hail from the practising Bar, with the wide-ranging experience it provides.

A practising senior lawyer said: "Of course there is a big difference. A judge from the Bar would be exposed to the humane and commercial realities, instead of (one) from a cloistered environment, intellectual brilliance not withstanding."

Perhaps one perception is that the limited pool of sufficiently senior talent at the Bar may be a constraint, as getting more from there may also weaken its ranks.

The brighter legal minds who thrive on the corporate side of the job, meanwhile, have less incentive to join the Bench than those at the Bar. Compared with the often thrilling cut and thrust of corporate work or litigation, life on the Bench is relatively "cloistered", to use the senior lawyer's term. Also, there are fewer personal opportunities, such as landing board directorships.

If anything, the new appointments should be seen as a challenge to the Bar to strengthen its ranks, as an outstanding roll of practising lawyers with an increased and vigorous membership will mean less reason to look elsewhere for potential candidates.

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

Building Maintenance and Strata Management Act - Building Maintenance and Strata Management (Lift, Escalator and Building Maintenance) Regulations 2016 (S 348 of 2016)

Latest developments: Banking, construction

01 Jul 2016

California Fitness: Refunds unlikely after gym's closure, say lawyers

Straits Times
21 Jul 2016
Goh Yan Han & Nicole Weers

There may not be enough money to repay members, say lawyers

Her contract was due to expire this month, so she signed a new two-year contract with California Fitness last month, just weeks before the closure of all its outlets.

Now, Ms Esther Lim, 26, is in limbo as she has not even started using her new membership card nor finished the personal training sessions she previously paid for. Her potential losses? About $4,000.

The customer service executive is but one of many California Fitness members who are angry and disappointed in the gym's abrupt closure. But getting their money back could be an uphill task, according to lawyers.

After the club's Republic Plaza branch closed on Saturday, it was announced at 12.03am yesterday that California Fitness had shut down its other outlets in Novena and Bugis until further notice.

Recovery firm Ferrier Hodgson was appointed as the provisional liquidators of the club's owner, J.V. Fitness, as the latter had insufficient resources to continue operations.

Neither Ferrier Hodgson nor California Fitness replied to queries from The Straits Times by press time. A J.V. Fitness representative declined to comment.

California Fitness opened in Singapore in 1998 with its famed floor-to-ceiling glass windows at Orchard Road, allowing onlookers to see gym members work out.

Many members are now hoping to get back thousands of dollars worth of gym packages.

For Ms Lim, the $4,000 she stands to lose in unused packages is equivalent to two months of her pay. "(The gym) shouldn't have asked us to recontract if it had problems with money," she said.

A 27-year-old loan officer, who wanted to be known only as Mr Tan, could lose about $5,000.

He signed for a 30-month membership in May and paid for 30 personal training sessions, totalling $2,471.70. But due to some changes in payment, he paid California Fitness twice but the gym did not void his first payment.

"I am very angry. It is a huge sum of money," said Mr Tan, adding that he was very upset the club was still selling packages shortly before closing.

Some fitness clubs are trying to help affected members. True Fitness is extending a discounted sign-up rate to California Fitness members and a one-month free trial.

Since the closure of the gym's Republic Plaza outlet on Saturday, the Consumers Association of Singapore (Case) has received 331 complaints against the club.

Mr Seah Seng Choon, Case's executive director, said that "purchasing membership packages may be cheaper in the long run, but (consumers) will face the risk of losing their prepayment in the event that the company closes down".

Consumers who recently joined as members could argue they were misled into believing the club would still be in operation for a number of years. This might be an unfair practice under the Consumer Protection (Fair Trading) Act, he said.

To get their money back, members have lodged complaints with Case or the Small Claims Tribunal, while others have lodged police reports.

But lawyers The Straits Times contacted were pessimistic on the odds of getting refunds. Said lawyer Amolat Singh, referring to firms like Ferrier Hodgson: "A liquidator is like an undertaker of a company - it suggests a company's funeral.

"While (club) members can register their claims with the liquidator, there may not be any money to give to them." Once a company goes into liquidation, one cannot take legal action against it, he said.

Other channels, such as Case, the Small Claims Tribunal or the police, are worth a try, but the chances of successful refunds are remote, said lawyer Rajan Supramaniam.

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

Income Tax Act - Income Tax (PIC Automation Equipment) (Amendment) Rules 2016 (S 347 of 2016)

The single economic entity doctrine in competition law

01 Jul 2016

Curbing contempt for due process

Straits Times
21 Jul 2016

Its colonial roots and vague boundaries have made the law of contempt of court the subject of criticism and review in countries that have adopted its judge-made principles articulated in English casebooks. In India, for example, resentment arose over restraints on comment. While in Australia, a law reform commission made recommendations a decade ago relating to the no-limit sentences a judge can impose for contempt. Such issues have to be addressed here as well, which is what the Administration of Justice (Protection) Bill aims to do. Introduced in Parliament recently, the Bill's effort to codify the law is welcome as a lack of clarity is unsettling for those who fear finding themselves on the wrong side of the law when commenting on pending cases, especially those rousing much public interest.

Few would argue against the need for forms of contempt such as imputing improper motives to a court, interfering with trial witnesses, obstructing court proceedings, or disobeying court orders. But on sub judice, or "prejudging" a pending issue, in chatter via social media or opinions expressed elsewhere, is a more debatable matter. Those seeking more leeway to comment on cases argue that influence is not an issue as juries are no longer used here and a judge is impervious to outside talk. Some legal commentators believe it would take compelling circumstances to establish that a trial has been prejudiced or public confidence has been undermined in the due administration of justice. Even if there's a suspicion that loose comments from various quarters influenced potential witnesses, it would not be easy to attribute blame or make out a case beyond reasonable doubt.

Yet, it should be cause for concern when comments flout one's sense of natural justice. An example would be raising the past convictions of the accused, even though these are not related to present charges. Once a thief, always a thief is a presumption that a judge would spurn in the absence of sufficient evidence. But the court of public opinion might have no qualms about tarring and feathering someone rashly. Runaway sentiments should not punish those who ought to be presumed innocent instead, for example, by causing others to shun or harass a suspect while a case is pending. Nor should innocent people be put on trial by self-appointed social media vigilantes with neither accountability to anyone nor sense of social restraint.

In seeking to codify existing practices, the proposed law has specific purposes, as stated in the Bill. It also helps by spelling out what penalties might follow for failure to comply with its provisions. Making clear that the law elucidates rather than expands the scope of what might constitute contempt would help to reassure those who fear that fair comment will be unduly fettered.

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

Common Gaming Houses Act - Common Gaming Houses (Exemption) (No. 37) Notification 2016 (S 346 of 2016)

Green Men and Treacherous Crossings: Asnah bte Ab Rahman v Li Jianlin [2016] 2 SLR 944

01 Jul 2016

California Fitness gym closures: Get firms to insure packages over $500 – Forum

Straits Times
21 Jul 2016

The California Fitness closure highlights the need for better consumer protection and business practices ("California Fitness shuts remaining outlets"; yesterday).

The failure of the gym chain and other health and spa-related businesses shows how customers are not being protected.

I call for a ban on package payments of more than three months or $500.

I also call for a ban on tie-in packages involving banks, where the full payment is made to the company and the debt transferred to the bank.

A Facebook group of victims that has been set up is replete with examples of customers who signed up or renewed with California Fitness just last week and must now continue paying the bank.

Such bank packages lead to salesmen sometimes fraudulently and exclusively promoting such payment methods, withholding information on the consequences as well as about other payment modes.

Christopher Low Kin Siong

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Requisition of Resources Act - Requisition of Resources (No. 2) Order 2016 (S 345 of 2016)

Learning to manage

30 Jun 2016

The debate over whether great leaders are born or made has been raging for decades (perhaps centuries). But within the context of a law firm, one thing is certain: being a lawyer and being a law firm leader require quite different sets of skills. Providing high-quality legal advice to clients based on deep knowledge of the law and a solid understanding of the case at hand is one thing; managing a firm with dozens of employees, keeping clients and partners happy, and plotting a winning strategy for the firm is something else.

It is not surprising that some lawyers find the transition from rank-and-file partner to a law firm leader less than smooth. Challenges such as cost pressures, growing competition and talent retention test their business acumen as well as their ability to come up with a clear strategy. However, help is at hand in the form of management programmes designed to hone their leadership skills, including two that are scheduled to be held in Asia this year.

The first of these was the SAL-INSEAD Law Firm Leadership Programme (SILLP), conducted jointly by the Singapore Academy of Law (SAL) and business school INSEAD in Singapore in April. The programme was conceived and designed by Sriram Chakravarthi, senior director and chief legal counsel at SAL. It aimed to help law firm leaders on a number of fronts, including building agile and sustainable law practices, assessing and improving leadership capabilities, and building, leading and motivating teams. “Feedback from participants who attended the inaugural run has been very encouraging and has given us many ideas on how to expand the programme offering going forward,” says Chakravarthi.

Coming up in August is Law Firm Leadership and Management – China, a programme being run in Shanghai by Harvard Business School (HBS) in conjunction with East China University of Political Science and Law. With a faculty chaired by HBS professor Ashish Nanda, the programme has a two-fold objective: to help leaders improve their organisation’s performance as well as bring their leadership skills to the next level.


Chakravarthi says that law firm partners who are elevated to management, while possessing technical legal competence don’t necessarily possess business management skills such as strategic planning, improving organisational alignment, branding and business development abilities, managing growth and change, and motivating people and teams.

According to Nanda, in law firms, people who get leadership positions are typically are very good producers. “They get there by being very effective at practice of the profession,” he says. “So these tend to be very good, sophisticated, skillful and successful practitioners. But a lot of leadership is about managing the responsibilities of others and managing in the responsibility. This means that you have to have the ability to delegate, to ask for help, to motivate and to trust that others will deliver.”

There is also a transition from production to leadership, where “you move from doing to delegating, you move from being the solution to being the person who asks, from being the person who provides to being the person who requests,” says Nanda. This transition is very challenging, he notes, and very effective professionals are sometimes ineffective as leaders because they tend to micromanage or they lack trust, or they are unable to think strategically.

As lawyers move into leadership positions, they need to unlearn some of the skills and understand that they do not always have all the solutions. “You have to work much more as a team, and you have to be much more effective together,” says Nanda. “I think those are some elements that law firm partners need. What they need to understand is that it is not just the content of whatever they are experts in that will help them to be more productive. [They also need] leadership skills [such as] teambuilding, motivating and delegating. These skills become more important, and some of these you learn through trial and error. Some of these you learn through your mentors and some of these you learn through classroom experience while looking at others working effectively.”


The HBS programme is a mix of case studies, some exercise, simulations and some lectures, according to Nanda. “All the case studies are from professional service firms, including law firms, investments banks and management consulting firms. We feel that leadership of professional service firms and the challenges that professional service firms create are quite distinct from the situations from commercial or industrial organisations,” he says. “In one case study, we have a fairly large mix of Asian law firms on the one hand and international law firms on the other hand. There is an interplay between how Asian is similar or different from an overall global professional service setting.”

He notes that some of the learning is content which is where participants can look at what others have done, and reflect on whether it works for them. “Very often law firm leaders feel quite lonely in their responsibilities,” he says. “They aren’t able to talk with others within their firm about the challenges they are facing. Many of them are trying to learn leadership through trial and error and through experience. This is an opportunity to look at other professional service firms in a similar context and test out some of their ideas.”

As participants are all leaders in various law firms, the programme gives them an idea of how others view challenges such as the balance between production and leadership, strategic thinking, of motivating and developing people. “We are able to test them out with these people and the context is actually very comfortable and safe so people are able to have a conversation at this level,” says Nanda.

Peter Ni, a partner at Zhong Lun Law Firm, took the programme last year. “The most important skill that I partially lacked was how I thought about the business model of a law firm,” he says. “A law firm might be a people business, but it’s still a business, and a business needs to be well managed. The programme really changed my thinking about how to manage law firms: [I learned] how to formulate strategies, to position the firm in the best way, and to deal with strategic factors in law firm success such as leverage, probability, and growth.”

Meanwhile, Chakravarthi says that SILLP is specifically designed and contextualised to address the needs of law firm partners by providing a management framework that can be applied to address challenges of increasing cost pressures, growing competition, and talent retention issues as well as to enable law firm partners to think about new strategies (including blue ocean strategies) to grow their practices. “The SILLP strives to impart leadership concepts, talent and performance – management precepts, operations management skills and some grounding in the marketing and branding area,” he says. “It also looks at the threat of technology disruption and how to prepare the law firm for disruption in order to stay competitive.”

First published in Asian Legal Business, 20 June 2016.

Copyright © 2016 Thomson Reuters

Tighten rules against firms collecting advance payments: Forum

Straits Times
21 Jul 2016

There must be tougher laws against those who offer services with payment collected in advance ("California Fitness shuts remaining outlets"; yesterday).

The ease of starting any new business here must not become an easy tool to cheat people.

In 2012, a car workshop which sold warranty and servicing packages went bust, with devastating effect ("Police probe closure of car workshop"; March 28, 2012).

Several hundred thousand dollars in premiums and advance payments had been collected by the time it abruptly shut down.

Car dealers who bought the cover for their customers were left with no cover.

Because of the huge repair claims, some dealers eventually went bust, and the car owners eventually found themselves forking out money to pay for their repairs.

Why are businesses which collect cash upfront free to do what they want? The authorities should tighten this loophole.

A business that needs to collect money upfront must be made to obtain a separate licence to do so.

Because they are handling so much money upfront, they will also have to go through training on money laundering activities.

The laws, too, need to be changed so that if fraud is proven, there are provisions for jail sentences to be meted out to directors of such failed businesses.

Only with these efforts can consumers' rights be protected.

Chua Boon Hou

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Housing and Development Act - Housing and Development (Precincts for Lift Upgrading Works) (No. 7) Order 2016 S 344 of 2016)

State Courts Practice Directions (Amendment No 1 of 2016): Enhancing measures to promote early and effective resolution of motor accident and personal injury claims

29 Jun 2016

PDPC calls on firms to better protect data

Business Times
21 Jul 2016
Jamie Lee

[Singapore] THE Personal Data Protection Commission (PDPC) on Wednesday called on organisations here to improve how they protect personal data.

This comes shortly after the Monetary Authority of Singapore (MAS) and the PDPC said they would investigate a case involving United Overseas Bank (UOB), which had its clients' unshredded documents found in a trashbag under a tree at Boat Quay.

PDPC said "physical media" should be properly disposed of through shredding, pulping, or incineration.

"Do not leave physical media unattended in common areas if they contain personal data, even if they are meant to be discarded," it said.

It also said the shredder should be maintained regularly, "otherwise, employees may be tempted to opt for less secure methods of disposal".

A report from The Middle Ground, an online news website, revealed last week that an entire trash bag filled with UOB documents was found in June behind the bank's headquarters at Raffles Place. The reporters' "dumpster dive" unearthed several corporate statements, loan applications, and internal reports from the bank.

The news portal put up pictures of the documents - with the sensitive information redacted - that had the personal details of at least one guarantor behind a loan, such as his NRIC number and date of birth, in full view, it said.

UOB did not deny the report and its findings. It told The Business Times that it has concluded its investigation in the matter.

BT approached UOB again on Tuesday for further comment, and asked about the result of the internal investigation, the remedial actions taken, whether this is a systemic issue, and whether the bank has since contacted customers whose data may have been found in the trashbag.

"We have nothing further to add," a spokeswoman told BT.

MAS said it is looking into the matter. Its spokeswoman told BT that the regulator expects banks to have in place measures to safeguard the confidentiality of customer information, and will not hesitate to take action against banks which fail to do so.

Businesses can be fined up to S$1 million per breach under the Personal Data Protection Act (PDPA), which came into full effect in July 2014. The biggest fine so far was a S$50,000 penalty levied on the karaoke chain K Box Entertainment Group for a data breach. Details of more than 300,000 of its customers were leaked onto a file sharing website.

SMEs must make greater effort to protect personal data: commission head

[Singapore] COMPANIES - small and medium- sized enterprises (SMEs) in particular - can do a better job of protecting personal data, the Personal Data Protection Seminar concluded on Wednesday.

Leong Keng Thai, chairman of the PDPC (Personal Data Protection Commission), cited in his welcome address a growing awareness among organisations of the importance of personal data protection. But some, such as SMEs, can "do with more guidance in adopting good practices".

Among several new initiatives to help SMEs boost their data management capabilities, the PDPC will facilitate their tapping of Spring Singapore's Capability Development Grant. This will let them defray up to 70 per cent of qualifying costs, such as for consultancy and training, assessment and audit, and the adoption of data protection software solutions.

The PDPC is also partnering the Workforce Development Agency (WDA) to enhance the current two- day course for data protection officers (DPOs) with a focus on developing their practical skills through data-handling assessments and in-class participation.

Under the Personal Data Protection Act 2012 (PDPA), all organisations in Singapore are required to appoint one or more DPOs to be responsible for ensuring the organisation's compliance with the PDPA.

Mr Leong added that the PDPC has issued three new guides that offer practical advice on building websites, managing IT vendors, and safely disposing of personal data in a physical medium. These are available online.

The PDPC has also updated the existing guide on securing personal data in an electronic medium to include new chapters on cloud computing, IT outsourcing and security patching, as well as revised several advisory guidelines to provide greater clarity on common scenarios relating to access requests and withdrawal of consent.

Mr Leong said that the guides and guidelines are meant to drive a mindset shift from "compliance to accountability", and for organisations to take it upon themselves to foster a "trustworthy data ecosystem" that is conducive to innovation and data use.

Minister for Communications and Information Yaacob Ibrahim added in his opening address at Wednesday's seminar that trust and innovation must go hand in hand.

To an audience of C-level executives, corporate governance heads and data protection officers, Dr Yaacob reiterated how leveraging data - the "new oil of the 21st century" - can make businesses smarter and the economy more competitive, and called for the collection and use of data to "rest upon a foundation of trust".

"It is no longer an option to treat data protection as an afterthought. Businesses who do this have learnt the hard way . . . trying to win back customer trust is far more challenging than trying to win a new customer."

In April, 11 organisations - among them household names Challenger Technologies, Metro, K Box Entertainment Group - were fined or warned for breaching data protection obligations under the PDPA, in what was the PDPC's first tranche of enforcement decisions since the PDPA came into full effect in July 2014.

At the seminar, Dr Yaacob also praised a number of Singapore companies for their data protection practices. One of them was RedMart, a homegrown online grocer startup.

"More people are shopping online. But there are customers who continue to be cautious of online shopping and of how their personal data will be used. To assure its customers, RedMart has designed its operations around personal data protection."

For instance, RedMart's mobile app for its delivery drivers discloses only relevant personal data that allows them to carry out their task. This includes the customer's name and address - but not their email address or contact number. To notify customers of the arrival of their delivery, the app triggers an SMS notification to them via a RedMart secured server, but does not unnecessarily reveal their phone number.

Dr Yaacob pointed out that the Committee on Future Economy is also looking into how big data can be used more effectively by businesses, and "what structures and systems we need to put in place to harness economic value from data". Minister of State for Communications and Information Janil Puthucheary will lead a group to study this matter more deeply, he said.

Jacqueline Cheok

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Town Councils Act - Town Council of Sembawang (Common Property and Open Spaces) By-laws 2016 (S 343 of 2016)

No reliance without expectation of returns? Alvin Nicholas Nathan v Raffles Assets [2016] SGCA 18

29 Jun 2016

The 'Constitution for the oceans' at stake

Straits Times
20 Jul 2016
Kentaro Nishimoto

On July 12, the Arbitral Tribunal under Annex VII to the United Nations Convention on the Law of the Sea (Unclos) rendered its award on the South China Sea Arbitration. The award expressly ruled that China's claims in the South China Sea, based on its so-called nine-dash line, are contrary to Unclos. The tribunal also decided on the legal status of certain maritime features in the South China Sea and found that no feature in the central part of the South China Sea is entitled to an exclusive economic zone (EEZ) or a continental shelf.

It clearly held that the various activities of China in the South China Sea, such as interference with the activities of the Philippines, large-scale land reclamation and the construction of artificial islands, violate international law.

This arbitration proceeding was initiated by the Philippines in January 2013, against China's claims and activities in the South China Sea. China has denied the jurisdiction of the tribunal to deal with this case, and has completely refused to take part in the proceedings. It has only made its position known through informal means.

However, Annex VII of Unclos, which provides for the procedural rules for the arbitration, expressly states that the absence of a party to the proceedings does not bar its progress. It also stipulates that the award is final and without appeal, and that the parties to the dispute must comply with the award. In other words, as a State party to the Convention, China is legally obliged to comply with the decision.

The South China Sea dispute is a complex one, with a number of countries in dispute with each other, both with respect to sovereignty over islands and maritime areas. We should not expect the award to bring an end to the overall South China Sea dispute.

The territorial dispute over the islands in the South China Sea is outside the scope of the arbitration, and remains unsolved. Quite apart from this issue, however, the maritime aspect of the dispute was complex enough in its own right, due to China's unique claim of historic rights to the waters within the nine-dash line, and also because it was unclear which maritime features in the South China Sea would be entitled to a 200-nautical-mile EEZ and a continental shelf.

The tribunal removed these two uncertain elements from the overall South China Sea dispute by clarifying that the nine-dash line cannot be justified under international law and that no island in the central part of the South China Sea is entitled to a 200-nautical-mile EEZ and a continental shelf.

This resulted in a clear picture in which China is not entitled to make any kind of claim to most of the maritime area of the South China Sea.

The tribunal ruled almost entirely in favour of the Philippines and also found that a number of activities by China were in breach of various provisions of Unclos.

However, as the award itself points out, it is more about building common understandings about entitlement to maritime areas than condemning the unlawful acts by China. Its significance lies in the fact that it addressed the fundamentally different views by the parties of their rights to maritime areas, and indicated what must be commonly accepted in the light of Unclos.

It is indispensable to have such common understandings, if the parties in the South China Sea dispute are to proceed on a path towards its resolution.

In this sense, the award is a major step forward towards the resolution of this entangled dispute. However, this also means that the prospects for the resolution of the dispute will be further diminished if China insists on its one-sided claim and refuses to comply with the award.

The award of the Arbitral Tribunal also has significant implications beyond the South China Sea dispute for the maintenance of the international order at sea.

Ambassador Tommy Koh of Singapore, who presided over the Third United Nations Conference on the Law of the Sea which gave birth to Unclos, referred to this convention as a "Constitution for the oceans".

Worthy of such description, Unclos prescribes the fundamentals of the present maritime order in a manner that balances the rights of coastal states and the navigational rights of other states. Claims to maritime areas not based on the convention may lead to the destruction of that balance, and are a challenge to the international order of the oceans. From this viewpoint, countries should unite to persuade China to comply with the award.

Ever since the Philippines lodged its case, China has been criticising the move as aggravating the dispute in the South China Sea. Recently, China has also begun to claim that many countries actually support its position.

However, such efforts towards justifying non-compliance with the award wholly miss the point. The reason Unclos provides for a compulsory dispute-settlement procedure is to prevent the balance embodied in the convention from being undermined by one-sided interpretation of its provisions.

The use of the mechanism by the Philippines was very much in line with what was intended under the convention. By signing and ratifying Unclos, the parties to the convention have committed themselves to resolve disputes based on international law through the dispute-settlement mechanism.

Even if there is political support from other countries, this cannot justify a departure from the existing legal framework. Whether China complies with the award is directly connected to the question of whether or not it intends to act within the existing legal framework as a responsible global power.

• The writer is Associate Professor at the School of Law, Tohoku University, Japan.

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

International Child Abduction Act - International Child Abduction (Contracting States) (Amendment No. 3) Order 2016 (S 342 of 2016)

[IND] Understanding the new Insolvency Code – Part I: Debt restructuring for corporate debtors

29 Jun 2016

Mother falsely accused son of raping her: Lawyer

Straits Times
20 Jul 2016
Selina Lum

Defence counsel says accused's stepfather, mother lied in order to get him out of house

The lawyer for a 33-year-old man accused of raping his biological mother at their home told the High Court yesterday in his ongoing trial that the accusations were a "complete collusion" to get his client "out of the house".

Senior Counsel Harry Elias revealed the defence's case while cross-examining the accused's stepfather, who testified that the accused drank alcohol, smoked cannabis and created disturbances at home.

The lawyer suggested that the 54-year-old stepfather and the accused's 56-year-old mother went to the police to accuse him of rape in order to "get rid of him".

Speaking in an agitated tone, the stepfather firmly denied the suggestion, pointing out that he could have called the police to arrest the accused for taking drugs.

"We did not lie, this is what happened. We are not using this as a reason to make him leave the house. This is a shameful act," he said through a Tamil interpreter.

He said that the accused became a "nuisance" a few months before the alleged rape. He said he expressed his annoyance to his wife as he was not on talking terms with the accused.

The accused faces one count each of rape, molestation and aggravated molestation. He is contesting all the charges.

The second of three sons, he worked as a safety coordinator and lived with his mother and stepfather in the one-bedroom flat.

Known to his family as "Boy", he is accused of sexually attacking his mother after he returned home at about 2.30am on Oct 4, 2013.

Yesterday, his stepfather, two brothers and sister-in-law took the stand to give their accounts of what happened when they met the alleged victim hours after the alleged attack.

A six-minute recording in the Malay language of a conversation between the woman and the accused was played when each brother took the stand, to confirm it was the same one she had played for them after the incident.

The woman had made the recording using two mobile phones while she was on her way to her eldest son's home after fleeing her flat at about 6am.

The transcript and translation of the conversation are expected to be tendered in court today.

Yesterday, the court heard the woman was crying when she arrived at her eldest son's flat at about 7am. She was shaking as she told her daughter-in-law in simple English what Boy had done to her.

Her husband, alerted by the daughter-in-law, arrived at the flat soon after. They then went down to a nearby playground to wait for the two sons, aged 36 and 32.

At the playground, she cried as she played the audio recording and said that she wanted to make a police report. However, she did not go into details of what had happened between her and the accused.

The youngest son testified that after the report was made, his mother told him that the accused returned home drunk and climbed on top of her but she could not push him away as he was too heavy.

Her husband said he had gathered that she was raped but it was only one week later, when they were in a "more relaxed mode" that she told him directly.

The two brothers also painted a picture of the accused as a filial son who helped to support the family financially. From time to time, he lent money to them as well as to their stepfather, they said.

The stepfather, a cook, rejected contentions by the defence counsel that he was embarrassed when the accused went to his hawker stall to chase him for repayment.

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

Income Tax Act - Income Tax (Concessionary Rate of Tax for Global Trading Companies) Regulations 2016 (S 341 of 2016)

SHC: Features of design and build contracts

28 Jun 2016

Accountants play a vital role in money laundering war

Business Times
20 Jul 2016
Kang Wai Geat

RECENTLY, the Monetary Authority of Singapore (MAS) closed down BSI Bank as a result of severe infringements of anti-money laundering regulations. BSI Bank was also slapped with a S$13.3 million penalty for 41 breaches of anti-money laundering regulations. Weeks after shutting down BSI Bank, MAS announced plans to set up a dedicated anti-money laundering department to combat illicit financial activities.

The message is clear - there is a hefty price to pay for taking anti-money laundering regulations lightly. The ubiquitous threat of money laundering has become more serious worldwide and companies are treating this as no laughing matter.

In a Global Economic Crime Survey 2016 by professional services firm PricewaterhouseCoopers of more than 6,300 respondents in 115 countries, 74 per cent indicated that their organisations have performed an anti-money laundering/counter terrorist financing risk assessment for their businesses.

As a nation, Singapore is not spared from the risk of criminals on the hunt for opportunities to wash their dirty monies clean. In the same survey, 26 per cent of the respondents from Singapore reported money laundering incidents, a marked increase from a low 5 per cent in 2014. This is a timely reminder that the menace of money laundering cannot be underestimated.

Money laundering has dire consequences. Socially, it can implicate innocent people who would not have otherwise committed illegal acts. Individuals have been convicted for acting as money mules. There are also reports of Singaporeans being found guilty of money laundering offences in other countries such as Australia, where the real estate sector has been widely reported to be a hotspot for money launderers.

Economically, like a wrecking ball, money laundering can effortlessly demolish Singapore's hard-earned reputation as a trusted, sound and vibrant global financial centre established over the years. But fighting money laundering is no walk in the park. It calls for a nationwide effort and every individual will have to chip in.


Accountants can contribute to the anti-money laundering cause in a big way. Arising from the financial nature of the work, accountants may have a higher chance of crossing paths with money launderers or dealing with illicit funds from money laundering.

Besides, money launderers covet the expertise of accountants, which they could exploit to facilitate money laundering via avenues such as transferring funds across numerous jurisdictions, setting up shell entities as facade for money laundering activities, and structuring complicated transactions which are difficult to comprehend, just to name a few.

Accountants have to be eagle-eyed to spot any suspicious transactions during their work. They need to possess an inquisitive mind when encountering any shady dealings, to uncover the underlying reasons for their occurrences. Hence, it is vital that accountants keep a watchful eye for indicators of suspicious transactions. For example, if the company receives unusual payments from unlikely sources inconsistent with the company's business, this should immediately trigger an alarm bell.

Also, there should be cause for concern if the company makes huge payments for no apparent reason, even if they are made to related entities. Another telltale sign is when the company engages organisations located in jurisdictions identified by the Financial Action Task Force as "high-risk and non-cooperative". These include countries such as North Korea, Iran, Laos, Bosnia and Herzegovina, Iraq, and so on.

In addition, cash transactions of large amounts should be scrutinised. It is not uncommon for money launderers to purchase big ticket items such as cars, antiques, property, gold and diamonds with their ill-gotten gains.

While the existence of one, or even a combination, of the indicators may not be conclusive evidence that money laundering is taking place, accountants should nevertheless err on the side of caution and remain vigilant, especially when money laundering is involved.


Next, what should accountants do after they have identified suspicious transactions? Accountants should not confront the suspected perpetrators at the first instance. If they do so, they run the risk of disclosing information which may prejudice any impending or ongoing investigation. Under the law, the accountants would have committed a tipping-off offence, albeit inadvertently.

Instead, accountants should lodge a suspicious transactions report with the Suspicious Transactions Reporting Office under the Commercial Affairs Department of the Singapore Police Force and let the relevant authorities handle the matter thereafter. In fact, this is a statutory requirement imposed on any employee or business owner, not just accountants.

It is reassuring and noteworthy that the law protects the informer in that if the reporting is done in good faith, it will not be treated as a breach of law, contract or professional conduct. Moreover, the identity of the informer is withheld and not disclosed unless required by the court.

Therefore, accountants (or for that matter, anyone) should have no qualms about lodging suspicious transaction reports since it is an obligation and there is adequate legal protection accorded.

Furthermore, accountants should note that the threshold for reporting suspicious transactions is low. They need not have actual knowledge of money laundering activities having taken place to lodge a suspicious transaction report.

Although the term "suspicious" is subjective, there should be some objective evidence underlying the basis for the suspicion. As long as accountants are of the view that something is amiss, they should lodge a suspicious transaction report.


Another significant area is the customer due diligence that accountants should perform on their clients. One critical aspect of the process is the identification of the person who ultimately owns or controls the client, also known as the beneficial owner. This is of paramount importance as it may shed light on any high-risk personnel who may be more liable to committing money laundering crimes.

But the step poses one key challenge which accountants not just in Singapore but all over the world have to surmount - the lack of information collated and published on beneficial owners. In the absence of any legal obligations on companies to disclose beneficial owners, accountants are being hung out to dry in terms of getting hold of reliable information on beneficial owners.

As the world develops and improves, so do criminals who are capable of devising the most innovative and clandestine way to hide information. More needs to be done to help accountants.

One proposal championed in the European Union (EU) is to have centralised registers containing information about beneficial owners. Law enforcement agencies should have unrestricted access to the information. The public may also obtain the information if cogent arguments can be put forward for such requests.

According to information released by the EU Office of Transparency International in May 2015, four out of five EU citizens support imposing requirements on companies to reveal information about their beneficial owners.

At the Anti-Corruption Summit 2016 held in May in London, the former United Kingdom Prime Minister David Cameron announced that Britain will set up public registers of the true owners of companies. France and the Netherlands will take similar action.

The efforts of one person alone cannot eradicate money laundering. To effectively combat money laundering, everyone needs to contribute, including accountants. The last thing we need is another BSI Bank. As long as we stay committed in our endeavours to fight money laundering, we can keep the evildoers away from this place we call home.

  • The writer is assistant director of technical advisory and professional standards, and learning and development at the Institute of Singapore Chartered Accountants.

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

Income Tax (Amendment No. 2) Act 2016 - Income Tax (Amendment No. 2) Act 2016 (Commencement) Notification 2016 (S 340 of 2016)

How an RTO achieves a win-win for all

24 Jun 2016

Upset over Swiber Holdings' disclosures ... or lack of

Business Times
20 Jul 2016
Tan Hwee Hwee

IF the intent of the underlying tone of Swiber Holdings' adverse announcements following its July 4 share trading halt was to reassure the market, the offshore and marine group could not have veered further off the mark.

BT has received letters from readers appealing for the paper to air their misgivings relating to its announcements on July 8 and July 11. The crux of their concerns is late announcements and lack of details in what they perceive as material disclosures.

The first announcement they refer to is that on July 8 when Swiber said that a US$710 million offshore field development off West Africa that was first announced as a project award to the company on Dec 15, 2014 was deferred due to "weakness in the oil and gas sector".

On the same day, the O&M player announced "outstanding letters of demand" relating to trade claims totalling US$4.76 million, of which it said it has sufficient resources to satisfy. It also said that it would "vigorously defending any claims that are without proper basis".

Then on July 11, Swiber said that it was pursuing legal recourse against AMTC Ltd for non-payment of a US$200 million subscription for preference shares in a Swiber subsidiary. The share subscription was to have been completed on June 29.

It would have been even obvious to anyone new to this listed company that it has been going through a very rough patch. For others more familiar with Swiber, the disclosures raised more questions than answers.

Back in December 2014, Swiber touted the US$710 million project award as its first breakthrough into West Africa and laid claim to having clinched contracts totalling to US$1.03 billion for that year-to-date. The value of that so-called first project in West Africa was notably one of the highest the company has secured since oil prices collapsed in the second half of 2014. It said that the project was to be executed from the first quarter of 2015 through to the middle of 2017. Yet, it chose to disclose only this July that the project delivery has been delayed. The July 8 disclosure ("Update on offshore field development project") also neither identified nor disclosed further details of the client. It also didn't elaborate on the reason behind the deferment.

To be fair, Swiber is not the first listed O&M player here to blame non-performance (of contracts or corporate developments) on the industry weakness. Historically, listed O&M firms have also cited confidentiality as justification for non-disclosure of either of three key parameters of the strength of a contract - client, name of project or field development and the value of the award. But every bit of information counts during times when even oil majors have been cancelling or deferring projects. So why should Swiber - for that matter any listed O&M company - withhold details that would have helped the investors assess the sanctity of a material contract?

In Swiber's case, it could be further argued the market should be regularly updated on the progress of the US$710 million project because the highly-geared listed company has a series of bond deadlines from 2016 through to 2017.

Likewise, as a reader calling himself a market practitioner pointed out in a letter to BT, it is reasonable to expect the listed company to have kept the market informed of AMTC's US$200 million preference share subscription. The deal was signed on June 9 and Swiber said that it did not announce this as the subscriber had requested completion to be postponed. Instead, it disclosed the subscription deal on July 11, about two weeks after the transaction was due to have been completed and only after it turned sour. Again, the July 11 announcement did not provide details on the counter-party AMTC Ltd. This led BT readers resorting to their own research and offering two possible clues to AMTC's identity - that this could be a hedge fund with links to Rawabi Holdings, Swiber's erstwhile partner in Saudi Arabia. Swiber subsequently denied in response to BT's query that Rawabi has anything to do with the preference share subscription deal.

Swiber's net debt-to-equity ratio stood at 1.57 times as at March 31, with S$310 million notes and certificates and another 450 million yuan (S$90.8 million) bond due for redemption through to 2017.

As one investor pointed out, given Swiber's stretched financial position, the circumstances surrounding the US$4.76 million trade claims would have also been considered material information for shareholders and bondholders.

Stakeholder confidence reigns supreme and it is in Swiber's interest to respond to calls for greater transparency.

READ MORE: Swiber downplays retrenchment talk

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

Statutes (Miscellaneous Amendments) Act 2016 - Statutes (Miscellaneous Amendments) Act 2016 (Commencement) (No. 2) Notification 2016 (S 339 of 2016)

SHC: Recognition of foreign liquidators – Universalism in Singapore insolvency law

24 Jun 2016

Well-known cancer doctor fined $25,000 to appeal against ruling

Straits Times
20 Jul 2016

Dr Ang Peng Tiam, a prominent cancer doctor in private practice, has been fined $25,000 by the Singapore Medical Council (SMC) following complaints by a patient in 2010.

Dr Ang's company, TalkMed Group, issued a release on Sunday to say that Dr Ang has "been strongly advised to appeal against the decision" and that he has decided to do so.

TalkMed is publicly listed, and the release by Mr Lee Boon Yong, its chief financial officer, is in compliance with rules of the Singapore Exchange.

A spokesman for TalkMed told The Straits Times: "We have not yet communicated with the SMC as the formal and full grounds of appeal are still being prepared."

In 2010, a family member of a patient who had been treated by Dr Ang filed four complaints against the oncologist with the SMC, the professional watchdog.

When asked what the complaints were, the company spokesman said: "We are unable to release the information requested as the matter is currently under appeal."

It was one of 152 complaints against doctors that the SMC received that year.

All the complaints are seen by the Complaints Committee. If there is merit, the case is heard by a disciplinary tribunal.

The tribunal heard the complaints against Dr Ang, who is also the medical director at the Parkway Cancer Centre. It cleared Dr Ang of two charges, but found him guilty of the other two and imposed a $25,000 fine on him.

Doctors found guilty by the SMC are told of the findings and are usually given a month to decide if they would like to file an appeal.

Such appeals are heard by the High Court.

If there is no appeal, the decision of the tribunal, and the reasons for the decision, would be made public after a month.

TalkMed's release added: "We have full confidence in Dr Ang and the day-to-day operations of the company are not affected." facebook.com/ST.Salma

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

Road Traffic Act - Road Traffic (Authorisation of Use) Notification 2016 (S 338 of 2016)

Singapore joins international framework for implementing BEPS

23 Jun 2016

Laws being reviewed to further curb family violence: Tan Chuan-Jin

20 Jul 2016
Kelly Ng

SINGAPORE — In light of recent high-profile cases of child abuse, the laws are being reviewed to enhance deterrence of family violence and to ensure that those responsible are appropriately dealt with, said Minister for Social and Family Development Tan Chuan-Jin yesterday.

“(We) need to look at our laws in terms of whether there is sufficient deterrence, whether the way consequences are meted out is the way we want to go,” said Mr Tan, who added that the Home Affairs Ministry and Law Ministry are looking into the issue.

Two weeks ago, a couple were jailed for their ruthless torture of a two-year-old toddler, Mohamad Daniel Mohamad Nasser, which led to his death last November.

The toddler’s mother, Zaidah, 41, was sentenced to 11 years’ jail for voluntarily causing grievous hurt and child abuse.

Her boyfriend Zaini Jamari, 46, was given a 10-year jail term and 12 strokes of the cane for voluntarily causing grievous hurt to, and ill-treating, the boy.

Two days after the verdict, Law and Home Affairs Minister K Shanmugam posted on his Facebook page: “For cases like this, we need to see whether the current legal framework is adequate. They ruthlessly tortured the child for more than a month, and effectively killed him.”

He also said people must be encouraged to make a report “immediately” when they are aware of cases of abuse.

Expressing similar sentiments yesterday, Mr Tan said cases of family violence, including child and elderly abuse, often persist because bystanders have kept silent.

“We always wonder, ‘Why did it happen?’ ... You look at the rest of the people involved, you will always ask, ‘Why did you not say something? Why did you not step in, if you knew that something was amiss?’,” said Mr Tan, who was speaking on the sidelines of an inaugural social service summit at Mandarin Orchard hotel.

Enhancements in detection and reporting of child abuse cases by a host of agencies — ranging from schools to hospitals — have led to more cases being investigated by the Ministry of Social and Family Development’s Child Protection Service (CPS).

Last year, the CPS looked into 551 serious abuse cases, almost half of which — 47.7 per cent — were instances of physical abuse, 37 per cent involved neglect, while the remaining involved sexual abuse.

Between 2012 and 2014, the CPS investigated between 380 and 400 cases of serious abuse per year.

In September last year, two former employees at Pertapis Children’s Home — a welfare and religious teacher, and a social service assistant — were convicted of abusing children under their charge.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Public Transport Council Act - Public Transport Council (Ticket Payment Service Licence) (Exemption) (Amendment No. 2) Order 2016 (S 337 of 2016)

MAS responds to feedback on proposals for securities-based crowdfunding

23 Jun 2016

Serving court papers electronically ‘needs more safeguards’

19 Jul 2016
Valerie Koh

SINGAPORE — While a recent landmark judgment allowing court papers to be served on individuals through new media — Skype, Facebook or Internet message boards — ensures that the law keeps pace with technological advancements, more safeguards may be needed to make sure a defendant is not disadvantaged as a result, wrote two law graduates.

In a commentary posted last Saturday on Singapore Law Blog, an online platform for legal news discussions, co-authors Benjamin Tham and Yuen Kit Kuan cautioned against being swept away by the “brave new world” of social media and instant messaging applications, despite how cost-effective, convenient and efficient they could be for serving claims on defendants.

They were commenting on a High Court judgment in May, which ruled that a freelance software developer could serve notice via electronic means for alleged copyright and contract breaches. Mr David Ian Andrew Storey had sued local computer games developer Planet Arkadia, its managing director David Michael Dobson and its director Peter Laurence Dobson for using his works “promotionally and in-game” without permission.

Noting the failed attempts to reach Mr David Dobson at his last-known Australian address, assistant registrar Zhuang Wenxiong allowed substituted service through Facebook and WhatsApp.

If a claimant wants to serve papers through such methods, he has to meet several conditions, including making sure physical copies of the court papers are posted on the front door of a defendant’s last-known address or through registered mail, and he will have to prove that the electronic platform was used by the defendant recently. While the commentary authors lauded the general parameters the court set out for such methods, they listed several areas that needed safeguarding, such as the defendant’s literacy level and age.

“It is commonplace for people of all ages to own a Skype or Facebook account. However, not all may be conversant with all of the functions of these platforms,” they said. Citing the example of an elderly woman, Mr Tham and Ms Yuen questioned whether she would know how to read messages on Facebook or access the legal documents online.

“The Court should be vigilant and scrutinise in greater detail applications for substituted service via electronic means on the parties to be served, who are prima facie vulnerable in this regard,” they added.

Fake accounts could also be a problem, said the authors. One way to circumvent this would be to require substituted service to be carried out via a minimum of two electronic platforms.

And while the judgment stated that the defendant has to be active online within a “reasonable time frame”, the authors felt that this duration would differ according to each case. “The courts can consider the following factors: The personal characteristics of the party to be served (e.g. age), the frequency of usage of the relevant electronic means, any ‘downtime’ or other forms of technical difficulties which render the relevant electronic mean inaccessible prior to the application for substituted service,” they said.

Mr Tham and Ms Yuen noted that the use of electronic means to serve court documents was still in its infancy, and further refinement of the safeguards will “invariably occur” over time.

But they stressed the need to “balance the rights between two competing interests — on one hand, a claimant ‘should be entitled to bring before the court any subject-matter in respect of which he wishes to sue, and on the other hand, that every one sued should have a full opportunity of defending himself against the claim made against him’”.

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Medicines Act - Medicines (Medicinal Products as Clinical Research Materials) Regulations 2016 (S 336 of 2016)

Goods and Services Tax Act: Changes to GST policies and administration

23 Jun 2016

SGX to hive off regulatory functions

Business Times
19 Jul 2016
Cai Haoxiang

MAS must approve and can also appoint members to board of new independent unit; some say move may sieve out lower-quality listings initially

[Singapore] IN a move welcomed by market watchers as long overdue, the Singapore Exchange (SGX) said on Monday that it is hiving off its regulatory arm from its commercial activities.

A new company temporarily dubbed RegCo will be set up as an SGX subsidiary by the second half of next year. It will house SGX's current regulatory team of around 100 people.

RegCo will be run by current SGX chief regulatory officer Tan Boon Gin, who reports directly to a board separate from the exchange. Central bank and regulator Monetary Authority of Singapore (MAS) will ensure SGX gives RegCo adequate resources for its duties.

Asked about the timing and rationale behind the move, an SGX spokeswoman said the exchange regularly considers developments in the industry and possible enhancements.

"Any change comes only after careful and thorough deliberation, including discussions with MAS. Today's announcement was no different," she said.

SGX CEO Loh Boon Chye said in a statement that together with its introduction of independent listings committees last October, the exchange has demonstrated its commitment "to do all that we can within the self-regulatory organisation framework to address potential conflicts between our commercial objectives and our regulatory responsibilities".

Market players hailed SGX's move as a crucial one to resolve the long-running perception that the exchange was conflicted in having to regulate its clients, which include China-related S-chips and penny stocks that had been the focus of extreme speculative activity.

David Smith, head of corporate governance at Aberdeen Asset Management Asia, said the move resolves a "damned-if-they-don't" situation for the exchange.

Otherwise, SGX will continue to draw flak for corporate governance failures in spite of the improvements it has made to its regulatory framework. "The direction is positive, but we have to wait and see the details," he said.

Ernest Kan, chief of operations for clients and markets at Deloitte Singapore, said: "You always enhance regulations to make sure they are up to date. So from the reputation point of view, certainly, you'll score."

While some might still gripe that the regulatory unit is not totally independent of the SGX, others countered that RegCo's board, at least, will be separate and the majority of its members independent of SGX.

David Gerald, president of investor lobby group Securities Investors Association (Singapore), said: "The devil is in the details and it is better for MAS to be the appointing body of this new regulatory body to give it complete independence."

In response, the SGX spokeswoman said the exchange can only appoint members of the RegCo board subject to MAS approval, and MAS can also directly appoint members of the board. In a statement on Monday, MAS said the independence of the subsidiary will be an important factor for its success. It requires the chairman of RegCo as well as a majority of its directors to be independent of SGX and its subsidiaries. All directors also have to be independent of SGX-listed companies.

The central bank added that it will continue to directly regulate SGX in terms of its obligations as a listed company and market operator. It will also maintain oversight of RegCo's responsibilities.

SGX might improve market perception with the move, but on the flip side, observers wondered if there will be more and unnecessary regulation.

Stefanie Yuen Thio, joint managing director of TSMP Law Corporation, said the crux of the matter for the Singapore market was not the quality of SGX's regulation, but whether the exchange can attract new listings. SGX continues to face difficult challenges of companies trading at low price-earnings ratios, along with a slew of ongoing privatisations, she said.

The exchange must thus take a "holistic and commercial" approach to regulation and avoid over-regulating. "It needs to assure the market that the new RegCo will not increase compliance costs and submission time," she said.

For its part, SGX said the move will "not add to the requirements of the current initial public offering listing process".

Corporate governance advocate Mak Yuen Teen, an associate professor at the National University of Singapore Business School, said that in the short term, the move might lead to lower-quality listings shunning the market.

"This is not a bad thing. In the long term, this should improve the quality of listings and will improve investor confidence," he said.

Looking ahead, the next big change in the offing might be around quarterly reporting, said Deloitte's Dr Kan.

"I believe something will come. Exactly in what form or shape, I do not know. It has become a time and cost burden especially for smaller counters."

SGX closed at S$7.80, up six cents or 0.8 per cent.

Spinning off SGX's regulatory role: seeds sowed after penny stock saga

[Singapore] EVEN from before its listing at the end of 2000, the Singapore Exchange (SGX) has been dogged by much criticism - from readers, analysts and writers of The Business Times - that commercial considerations will lead to a lighter regulatory touch, harming investors and the reputation of the stock market.

In reply, the establishment position was that there was no conflict, as a well-regulated exchange will lead to a vibrant market that attracts new listings. As a market operator, SGX was also deemed to be in the best position to regulate according to what the market needed.

Through the years, criticism of the exchange's dual roles flared up whenever market interests were perceived to be harmed, be it a corporate governance scandal, higher fees imposed by the exchange, stock manipulation or takeover issues.

In the meantime, SGX operated under rules set by the Monetary Authority of Singapore (MAS), the ultimate regulator. These rules were gradually tweaked over the years, even as SGX also made improvements to its regulatory framework.

And thus for many years, people understood the position of MAS to be that there was no need for a separate market regulator.

An MAS-SGX consultation paper reviewing securities market structure and practices in February 2014 summed up the existing arguments.

The paper noted there were statutory and internal safeguards to mitigate conflicts of interest. SGX's regulatory functions are supervised by MAS, and the exchange has statutory obligations to maintain a fair, orderly and transparent market. Internally, potential conflicts are referred to a regulatory conflicts committee comprised of independent directors.

Yet the February 2014 paper, which came out in the wake of the 2013 penny stock crash, gave a signal that bigger changes were coming.

Among other stock market reforms such as a minimum trading price, it proposed additional checks and balances, such as the setting up of three independent committees on listing, disciplinary and appeal matters.

The proposals came after MAS and SGX studied the regulatory models of exchanges around the world.

The three committees were set up in September 2015. A listings disciplinary committee, for instance, was empowered to impose sanctions. This was meant to separate the judgement process from the SGX-led investigatory function.

Meanwhile, MAS also hinted that further changes could be on the way to separate SGX's regulatory functions from its commercial mandate.

MAS deputy managing director of financial supervision Ong Chong Tee said in an opinion piece last June that there "could be scope to reduce any overlaps between the oversight functions of the MAS and the exchanges".

This was given a more competitive multi-exchange landscape, he said.

With the latest developments, the debate over SGX's dual roles in the past 16 years is now being settled in favour of a bigger separation.

Cai Haoxiang

Forming RegCo should be only the start

[Singapore] THERE'S little doubt that the market will welcome the Singapore Exchange's move to set up a separate subsidiary to house and discharge its regulatory functions as, to quote from the SGX press statement, it will make "more explicit the segregation of its regulatory functions from its commercial and operating activities".

Granted, it is a move that is overdue and should go some way towards satisfying critics of the present arrangement as it is explicit acknowledgement that greater independence means better regulation, a point which has been repeatedly raised since 2000 when SGX was listed.

Furthermore, the exchange itself would very likely be privately relieved that it can focus its energies on its primary goals of profit maximisation and shareholder wealth enhancement - after all, 16 years of having to juggle money making with surveillance/regulation and then having to answer to a sceptical public constantly criticising and asking questions about conflicts of interest must have been extremely taxing and tiresome, to say the least.

It is important, however, that regulation of the Singapore stock market does not end with the establishment of the new unit, currently referred to as RegCo. Instead, it should be seen as a first step -- albeit significant - in a developmental process that ideally will culminate with RegCo evolving into a fully independent and adequately empowered entity that has no ties whatsoever to the exchange.

The endgame in this development has to be a market where a competing exchange could easily enter if ever another licence was to be granted, without any one operator being perceived as having an unfair advantage because it enjoys a regulatory edge.

In this connection, Australia's experience is instructive. In early 2010, Canberra passed legislation stripping the Australian Securities Exchange (ASX) of its market surveillance responsibilities and transferred that role to the independent Commonwealth-funded, non-profit Australian Securities and Investments Commission (ASIC).

According to The Australian Financial Review on Feb 10 2010, "the shake-up of market supervision was driven largely by allegations of a conflict of interest against the ASX in its role as both markets supervisor and profit-driven listed company, as well as the onset of competition".

The competition in question was dark pool operator Chi-X, which had applied for an exchange licence in 2008 but had to wait two years to allow ASX time to get its act together and for the necessary laws to be amended.

Once all these formalities were completed, Chi-X started operations in November 2011 with just eight listed stocks. In less than five years, it now offers a full suite of 2,100 listed companies, accounts for 20 per cent of daily volume and has also last year launched its own warrants market.

So far, the question of a competing exchange here has not been fully aired, received wisdom being that Singapore's market is too small to accommodate another exchange. Maybe so, but the same was claimed of the telecommunications sector before it was deregulated.

That RegCo may eventually not be perceived to be fully independent of SGX was raised by some observers who, in response to Monday's announcement, quite validly pointed out that even though the company will have an independent board to be manned by directors who are not on the boards of any listed company, it will still derive its resources from SGX.

David Gerald, president and founder of shareholder activist organisation Securities and Investors' Association (Singapore) has also pointed out that "the devil is in the details and it is better for MAS (Monetary Authority of Singapore) to be the appointing body of this new regulatory body to give it complete independence".

"It is crucial as this new regulatory body will have to deal also with SGX as a listed company."

Clearly then, ensuring independence, both actual and perceived, is an ongoing process that should have in mind the entry of possible competition. RegCo's incorporation is undoubtedly a step in the right direction - but hopefully it is only the first of more to come.

R Sivanithy

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

Medicines Act - Medicines (Clinical Trials) Regulations 2016 (S 335 of 2016)

The art of crossing: The pedestrian and contributory negligence - Bte Ab Rahman v Li Jianlin [2016] 2 SLR 944

SLW Commentary
22 Jun 2016

MAS probes case of UOB's unshredded client data

Business Times
19 Jul 2016
Jamie Lee

Action will be taken against banks which fail to safeguard confidentiality of customer information; Personal Data Protection Commission says it is aware of case

[Singapore] THE Monetary Authority of Singapore (MAS) is investigating a case involving UOB, which had its clients' unshredded documents found in a trashbag under a tree at Boat Quay, and said that it will take action against banks that do not safeguard the confidentiality of customer information.

"MAS is currently looking into this matter. MAS expects banks to have in place measures to safeguard the confidentiality of customer information, and will not hesitate to take action against banks which fail to do so," a spokeswoman told The Business Times in response to queries.

It said that in cases involving disclosure of banking customers' personal data, MAS will work with the Personal Data Protection Commission (PDPC) to review the matter.

A PDPC spokeswoman told The Business Times the commission is aware of The Middle Ground articles that highlight the issue of documents containing personal data being disposed of by organisations, and has sought information from The Middle Ground on the matter.

A report from The Middle Ground, an online news website, revealed last week that an entire trash bag filled with UOB documents was found in June behind the bank's headquarters at Raffles Place. The reporters' "dumpster dive" unearthed several corporate statements, loan applications, and internal reports from the bank.

UOB did not deny the report and its findings. It had told The Business Times that it has concluded its investigation in the matter. But it declined to provide more details on the findings of its probe.

The bank said that it "takes very seriously" any breach of customer confidentiality. "We have a strict policy and procedures in place which govern the secure handling and disposal of confidential and sensitive information. Any staff or vendor found in breach of the policy and procedures will be dealt with accordingly."

The news portal put up pictures of the documents - with the sensitive information redacted - that had details of at least one guarantor behind a loan, with his personal details such as his NRIC number and date of birth, in full view, it said.

The Middle Ground found a document seeking a credit increase in millions from a "well-known sports apparel company". It said that it found handwritten scribbles in a notebook with client details and log-in passwords. The bank had also thrown out unshredded documents - marked confidential - of a performance report that highlighted a mix of assets and liabilities, as well as customer loans for its wholesale and retail banking units.

Checks with DBS and OCBC by The Business Times showed that banks typically shred sensitive client documents. The documents should not be discarded in trash bins, recycle bins or other publicly accessible locations.

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

Health Products Act - Health Products (Medical Devices) (Amendment) Regulations 2016 (S 334 of 2016)

Income Tax Act: Amendments to implement Common Reporting Standard passed

22 Jun 2016

Put a lid on insurers' excessive agent buyouts through disclosures

Business Times
19 Jul 2016
Claire Huang

THEY say what goes around, comes around, so it is not surprising to witness that some of the insurers who in the past had resorted to poaching insurance agents are now victims of the very same game they had played - perhaps more costly this time.

In recent weeks, the insurance arena has been abuzz with news of a mass resignation at Peter Tan Organisation (PTO), the biggest group of agency units at Prudential Singapore. Since a July 4 BT report on this, it is understood that PTO's founder Peter Tan is himself also leaving. Mr Tan did not respond when approached.

On July 6, Aviva's global chief executive Mark Wilson told investors that 250 agents were joining its new financial advisory (FA) firm in Singapore.

Industry veterans will remember that in 2009, Prudential's aggressive recruitment tactics, including buyout packages that had up-front lump-sum payments, had earned the wrath of rival insurers who then complained to the regulator. It may not be back to square one for Prudential, but it surely has to fill the vacancies in its large agency force.

Poaching hit fever pitch those few years as others like AIA, Great Eastern Life and Manulife also joined the race to expand their agency forces. After all, agents are the key channel for product distribution. This resulted in the Life Insurance Association Singapore (LIA Singapore) having to issue a new code on recruitment to try and stamp out poaching and other shady practices such as churning of insurance policies.

No one knows exactly how rampant the practice of churning insurance policies is but the risk invariably goes up when agents switch employers. This can come in the form of clients being persuaded to surrender policies - to the detriment of the insured - and using the proceeds to buy new plans from the agents' new employers. The problem is not new and there are guiding rules for agents but, given this new round of poaching, the antenna has to be raised.

For several months now, insurers and FA firms here have tried to outbid each other to woo high performers and their teams over by offering higher and more tempting sign-on deals with up-front lump sum payments and bonuses.

Those whose packages don't match current market offers grumble and complain but will, in all likelihood, up the ante when they have the financial resources.

Agents and financial advisers - especially the good performers - will quite understandably welcome bigger buyouts, but their employers' unhealthy obsession with higher offers needs to stop.

And this can be achieved through disclosures.

Those who are poached have inevitably to face the pressure of hitting higher sales targets. It doesn't take a rocket scientist to logically conclude that risks of policy churning, over-selling and even mis-selling go up in tandem.

It is in consumers' interests to know which of these poached agents are under greater pressure to push or even switch products.

To achieve this, regulatory measures have to be found for those whose sign-on packages are more than 150 per cent of their past annual income to disclose this information to policyholders - those who have already bought policies from the individual agent and potential ones. That way, consumers will then know what they're getting themselves into.

Penalties should be handed out to those who breach this.

To increase transparency and safeguard consumers' interests, regulators should also introduce a cooling-off period of, say, one year so that products can only be pushed to those representatives' existing clients after the period ends.

Of course, in cases where policyholders want to purchase another plan during the cooling-off period, they should be able to do so. But this should only be allowed after they acknowledge their agents' disclosures.

The 150 per cent is a reasonable benchmark that takes into account natural industry movements as those who perform should be incentivised and their freedom to go to greener pastures should not be curbed. But agents will be quick to point out there are strict checks when they switch employers. They will also tell you that their new employers monitor policy switching and they can lose their jobs when they are found to have churned policies.

Let's not forget the operative words here are "when they are found" because monitoring and enforcement by employers get more difficult when the migration of agents and advisers is frequent and the numbers large.

Furthermore, to wait until there is a sizable number of policies churned will be too little and too late for policyholders as they will have suffered losses already.

Most agents, according to observers, prefer sourcing for new clients than to attend to the existing ones anyway because it's tougher to sell products to those who've already purchased something. A key reason why insurers and FA firms throw up such high offers is that recruiting talent is difficult and it's only getting harder. More so, as the industry is now packed with a greater number of players while the supply of fresh graduates, experienced agents and advisers willing to take up purely commission-based jobs remain stagnant, which in turn explains the merry-go-round poaching that persists.

But how does pumping in more money to woo agents and advisers contribute to a sustainable industry? Agents and advisers benefit, insurers have to fork out millions and in the end, consumers are worse off.

Granted we are a free market so industry players have to have room to do what needs to be done to stay competitive. However, when weighed against consumer interest, keeping a lid on excessive buyouts through disclosures will send a loud and clear message that toxic and shady practices in the industry is not just frowned upon, it is forbidden.

In the absence of such disclosures, consumers are the ones who are ultimately losing out no matter which way you look at it.

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

Health Products Act - Health Products (Advertisement of Therapeutic Products) Regulations 2016 (S 333 of 2016)

SHC: Penalty clauses - How to avoid falling foul of them

21 Jun 2016

Counselling a must for couples before resorting to divorce: Forum

Straits Times
19 Jul 2016

The increasing divorce rates are of concern ("2015 marital break-ups 3rd highest on record"; last Thursday).

We need to consider why marriages fail. Ineffective communication skills, high expectations of each other and insufficient preparation for the journey of marriage are some of the reasons.

Estranged couples should consider seeking professional counselling when they experience marital woes. This will help them to identify the problems, find solutions and work on the marriage.

They can also obtain clarity as to whether their marriage is capable of being saved or has to be ended.

Often, couples whose marriages have broken down hold on to the marriage for the sake of their children, to provide a complete family to them. Sometimes, more harm is done to children in these marriages, as they become badly affected by their parents' disputes.

As a family lawyer, the first question I ask clients is whether they are absolutely sure they want to file for divorce. I have seen many cases where clients have a change of mind after the commencement of divorce proceedings and decide to discontinue them.

This is not only a waste of financial resources for the couple, but the aborted divorce proceedings also have a negative impact on the marriage. This often leads to further problems in the marriage.

To support couples whose marriages break down, the ecosystem must consist of lawyers, counsellors and the court, working together to assist in saving marriages or helping the parties to end the marriage amicably with minimum emotional pain.

Family lawyers have a civic responsibility to assist their clients who are uncertain about divorce in seeking professional help.

Couples must also be given an opportunity to attempt to resolve their marital, child, financial and property matters amicably through mediation or collaborative family practice.

Only when the couple have sought the help of family mediators and collaborative family practitioners, should they consider filing for divorce in court.

Rajan Chettiar

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

Health Products Act - Health Products (Therapeutic Products as Clinical Research Materials) Regulations 2016 (S 332 of 2016)

MinLaw consults on recommendations to strengthen Singapore as an international centre for debt restructuring

21 Jun 2016

Former Sentosa beach-patrol officer convicted of raping drunk woman at Siloso Beach

19 Jul 2016
Siau Ming En

SINGAPORE — A man who used to work as a beach-patrol officer in Sentosa was on Monday (July 18) convicted of raping and sexually assaulting a drunk partygoer at Siloso Beach in 2012.

A High Court judge found that the prosecution had, over the 15-day trial from last August to April this year, proved beyond reasonable doubt that Pram Nair, 27, had committed both offences on the resort island. Nair will be sentenced at a later date.

In the prosecution’s closing submissions, they pointed to holes in Nair’s testimony, noting that his evidence was “inconsistent, self-serving and even incredulous at points”.

The court earlier heard that the victim, a relief teacher then, had decided to go with a friend to attend a beach party at Wave House, a surfing and restaurant-bar venue on the island, on May 5 that year. At the party, she drank shots of whisky, Cointreau liquor and juice before Nair approached and chatted with her and her friend.

They also played a drinking game where Nair poured the orange-flavoured Cointreau liquor from the bottle directly into the victim’s mouth for 20 seconds, since she had just turned 20 years old.

Noticing that the victim looked like she was “really drunk”, her friend wanted to leave the party and went to collect the victim’s bag. When she returned, she could not find Nair and the victim.

The victim testified that she remembered waking up on the sand as she felt the pain of Nair raping her and tried to push him away, but was too weak and drunk.

Two eyewitnesses saw the two of them on the beach and one of them called the police after he noticed the victim trying to push Nair away.

The victim’s friend, who had been looking for her, found the victim lying on the sand, the lower half of her body naked. Nair told the friend that he found the victim at that spot, completely naked. He walked away but was later arrested by the police.

One of the inconsistencies highlighted by the prosecution was that Nair had initially put to the victim that she had performed oral sex on him but changed his account during cross-examination. Later, he reverted to his original statement that she did indeed perform oral sex on him.

The prosecution also said that Nair lying about how he found the victim on the beach completely naked was evidence of his guilty conscience.

The defence made the case that even though Nair wanted to have sex with the victim, he could not get an erection. This point was, however, not mentioned to the doctor during examination when it would form a “material aspect” of the defence’s case, the prosecution said.

When asked in court how the incident had affected her life, the victim said that this was a “painful, painful lesson” and she still feels “disgusted” with herself at times. She also mentioned that she was terrified for a time that she might have contracted HIV.

“I’ve never been more sorry to my parents because they raised me up really well,” she said, “and because I was disobedient and went out on that one night... it brought so much pain that there’s a long time after that where I couldn’t even lie in bed without feeling like ripping my own skin off because I just couldn’t remove myself from what happened to me.”

Copyright 2016 MediaCorp Pte Ltd | All Rights Reserved

Public Prosecutor v Pram Nair [2016] SGHC 136

Health Products Act - Health Products (Clinical Trials) Regulations 2016 (S 331 of 2016)

[GBR] Latest developments: Intellectual property

21 Jun 2016

Hague ruling 'a guide' for maritime disputes

Straits Times
18 Jul 2016
Raul Dancel

Ruling on Beijing-Manila spat offers template for settling other S-E Asian claims: Analysts

One windfall from last week's landmark ruling that struck down Beijing's claims to nearly all of the South China Sea is that it provides a helpful template for resolving disputes among South-east Asia's own littoral states, analysts said.

They said that the ruling by a five-man arbitral tribunal in The Hague, while mainly involving disputes between the Philippines and China, narrows the scope of disputes involving maritime overlaps among the 10 Asean member states.

"The tribunal ruling is not just about the Philippines and China," said Mr David Han, research analyst at the S. Rajaratnam School of International Studies (RSIS), but "has legal and political implications" beyond the South China Sea.

The 479-page verdict handed down on July 12 ruled that China cannot lay claim to over two-thirds of the South China Sea based on historic rights or ancient maps.

Claims of maritime entitlements must instead be defined under the 1982 United Nations Convention on the Law of the Sea, it said.

Under that treaty, adopted by 165 countries including China and the Philippines, land features, not historic rights, determine maritime claims. The tribunal then concluded that there is no "island" in the Spratlys that would have economic rights of up to 200 nautical miles, but just "rocks" with, at most, a 12-nautical mile "territorial sea".

South-east Asia's complex geography of exclusive economic zones (EEZ), territorial seas and archipelagic waters has resulted in a multitude of overlapping claims.

Nine out of the region's 10 states are coastal states, and two - Indonesia and the Philippines - are among the world's largest archipelagic states. From 1969 to 2009, at least 37 arrangements have been made to resolve disputes over sea borders. But many are still unsettled.

Cambodia still has to resolve its boundaries with both Vietnam and Thailand in the Gulf of Thailand.

Indonesia has already concluded several continental shelf boundary agreements, but it has yet to firm up EEZ boundaries with Malaysia in the Northern Malacca Strait, Vietnam in the South China Sea, and Thailand in the Strait of Malacca and in the Andaman Sea.

Malaysia, meanwhile, has disputes to resolve with Indonesia in the Celebes Sea, and with the Philippines in the Celebes Sea, the Sulu Sea and South China Sea.

Analysts said the arbitral court's ruling has made it easier to set ground on settling these disputes, whether through bilateral or multilateral channels. Historic rights as a basis for economic rights at sea, for instance, are out.

"The Asean way encourages flexibility and constructive cooperation. How this would work out... after the Hague ruling remains to be seen," said RSIS' Mr Han.

But he added: "I believe that moving forward, Asean would seek to focus on peaceful cooperation in line with the principles laid down in the 2002 Declaration on the Conduct of Parties in the South China Sea."

Ms Elina Noor, director of foreign policy and security studies at the Institute of Strategic and International Studies in Malaysia, said: "The tribunal ruling clarifying the nature of the features in the Spratlys may make joint development initiatives more palatable, provided claimants do not make acceptance of sovereignty or sovereign rights a precondition".

A couple of countries in South- east Asia have already proceeded with economic arrangements, notwithstanding their competing claims. These include the Thai-Malaysian Joint Development Area agreement, and a standing Malaysia-Vietnam agreement on oil and gas exploration.

For Justice Antonio Carpio, who helped guide the Philippines' case against China, the ruling provides instructions on working out contracts between two states seeking to tap resources inside EEZs.

"We can't have joint development in our EEZ in the sense that we'll share jurisdiction over it with another state," he clarified. "But it doesn't mean foreigners can't help us in exploiting our resources. We can award concessions. Foreigners can be contractors of the state. We can pay them in kind or cash, but there is no joint development."

Thailand's former deputy prime minister Surakiart Sathirathai said "functional cooperation" - efforts to tap resources in overlapping waters while settling claims - is not a solution itself. "But it provides another track to preserve peace and avert future armed confrontations," he said.

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

Health Products Act - Health Products (Licensing of Retail Pharmacies) Regulations 2016 (S 330 of 2016)

SHC: Wrongful arrest of a vessel – dealing with applications and appeals

20 Jun 2016

TalkMed CEO acquitted of 2 charges, found liable on 2 others

Business Times
18 Jul 2016

[Singapore] THE CEO of medical oncology company TalkMed Ang Peng Tiam has been acquitted by a medical disciplinary tribunal of two charges relating to a complaint by a relative of one of his former patients, but found liable of two others, resulting in a fine and a censure, according to a submission by the company to Singapore Exchange. Dr Ang, one of Singapore's prominent oncologists, will appeal the decision.

The charges, the nature of which were not specified, are related to a complaint submitted to the Singapore Medical Council in 2010, which was then referred to a disciplinary tribunal. The tribunal fined the doctor S$25,000, as well as censured and ordered him to provide a written undertaking not to engage in similar conduct, said TalkMed's disclosure.

The company, which was listed on Catalist in 2014, added that "we have full confidence in Dr Ang and the day-to-day operations of the company are not affected". TalkMed will continue to monitor the progress of Dr Ang's appeal and will make further announcements as appropriate, it said.

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

Health Products Act - Health Products (Therapeutic Products) Regulations 2016 (S 329 of 2016)

SHC rejects debtor’s second attempt to raise same arguments in bankruptcy proceedings

20 Jun 2016

So you want to go en bloc...

Straits Times
18 Jul 2016
Lee Liat Yeang

The collective sale market in Singapore had been relatively dormant for years but a major deal in May, one of the largest since 2007, revived the hopes of many owners of older properties across the island. Lee Liat Yeang describes in detail what prospective sellers need to know about the process for selling a property this way

When Chinese developer Qingjian Realty signed a conditional contract to buy the 358-unit Shunfu Ville for $638 million in May, some believed this could herald the dawn of a new wave of collective sales in Singapore.

Under Section 84A of the Land Titles (Strata) Act (LTSA), if the sale en bloc is supported by 80 per cent of the development's owners (in terms of both share value and strata area) and the development is at least 10 years old, owners can receive an order of sale from the Strata Titles Board or the High Court. But owners should be mindful of the salient issues before launching such a sale.


The election of responsible collective sale committee (CSC) members is a good starting point.

Owners of developments which had failed to secure a collective sale in an earlier round should note a higher threshold requirement of 50 per cent (by way of the total number of owners or by their total share value) for the signing of a requisition for an extraordinary general meeting (EOGM) to elect a CSC within two years from the relevant event of a failed sale attempt.

Otherwise, the usual requirement for such a requisition is to get the signatures of owners holding 20 per cent of total share value or of owners comprising 25 per cent of the total number of owners.

Owners should aim to appoint CSC members from owners across all types of units in the development so as to ensure better cross-representation of different interests. Candidates for the CSC should, at the time of election and at other relevant times, make full disclosure of any actual or potential conflicts of interest.


The CSC could be empowered at the EOGM to appoint lawyers and property consultants to act for the owners in the sale process. Otherwise, the appointment of lawyers and property consultants should be made at an EOGM.

The experience, track record and commitment level of the lawyers and the property consultants should be fully considered before they are appointed.


The sale committee should propose a reserve price in the CSA, taking into consideration factors such as development gross plot ratio, development baseline, special height controls (if any), lease top-up premium (if any) and general market conditions.

The committee should be mindful that, while a high reserve price will facilitate the collection of signatures to the CSA from owners, it may turn away potential buyers.

The committee should understand the importance of enticing developers to invest time and money to do feasibility studies on the development's land and of allowing the spirit of competition to take the eventual winning offer above the reserve price.


The CSC should propose a method that is fair and reasonable to all owners, and that should not disadvantage any particular type of units or class of owners. There is no "one size fits all" method or distribution of sale proceeds for a collective sale.

The Singapore Institute of Surveyor and Valuers recommends that one or a combination of two or more of the following methods or factors for apportionment - namely, valuation, strata area and share value.

Valuation could be made of a typical unit of each type, ignoring the unit's renovation cost, facing or floor level. However, the siting or location of a unit should be taken into consideration during the valuation of retail units.

While valuation is an important factor for commercial or mixed-use developments, it is rarely used for purely residential developments. Strata area is understandably a commonly adopted factor.

Owners of smaller units may argue for weightage to be given to their share value in the management corporation strata title (MCST) since a collective sale relates to unlocking the potential of the land. But they should also appreciate that share value is approved by the Commissioner of Buildings at the onset of the development for the purpose of determining maintenance contributions and the voting rights of owners in the MCST, and not for purpose of apportionment of sale proceeds.

The method of apportionment is often an emotional topic as everyone thinks his unit or unit type is worth more than others.

Practically speaking, the method of apportionment to be adopted must also be able to garner the support of 80 per cent of owners. Otherwise, the sale effort will fail.


It is provided explicitly in the LTSA that the Strata Titles Board or the High Court will not approve a collective sale that is not in good faith, taking into consideration only the sale price, the method of apportionment and the relationship (if any) between the buyer and any of the owners.

The importance of the CSC's role in a collective sale was explained by the Court of Appeal in the landmark case of Horizon Towers. The court decided that CSC members are fiduciaries of all the owners, including those who do not consent to the sale. The duties of CSC members include loyalty, even-handedness, avoiding any conflict of interest, making full disclosure of relevant information and acting with conscientiousness to exercise its powers in the best interest of all owners. The duty to act with consciousness in relation to the sale price requires the CSC to to use all possible diligence to secure the best reasonable price.


Non-consenting owners can raise a valid objection on the grounds of financial loss. The CSC should get the property consultants to check whether any owner will suffer a financial loss, meaning the proposed sale proceeds for his unit, after such deduction as the High Court may allow, will be less than the purchase price. Such deductions include what is stated in the Fourth Schedule of the LTSA, namely stamp duty on the purchase, legal fees for the purchase, costs related to privatisation and costs incurred in the process of the collective sale which are to be shared by owners under the CSA.


Incentive payment arrangements made or participated by CSC members or the property consultants in breach of their fiduciary duties would constitute bad faith in the transaction and are disallowed in law.


The need to ensure that the highest market price is achieved is safeguarded by a sale by public tender or auction. This will allow maximum exposure of the development to potential buyers so that there is competition to get the highest offer.

The CSC must obtain a valuation report prepared by an independent property valuer on the date of the close of the tender or auction.

The CSC may, within 10 weeks from the close of the tender or auction, enter into a private treaty contract with a buyer.

• Lee Liat Yeang is a senior partner with real estate practice group Dentons Rodyk & Davidson.

• This article is for general information only and should not be relied upon as legal advice for any specific matter or case.

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

Health Products Act - Health Products Act (Amendment of First Schedule) Order 2016 (S 328 of 2016)

Singapore signs anti-corruption declaration

20 Jun 2016

Injured worker's long wait for payout

Straits Times
18 Jul 2016
Olivia Ho

Firm has not paid compensation after 2 years as it had not insured worker, says director

A workplace accident left Chinese national Tang Zengshun blind in one eye. But nearly two years later, he has yet to get a cent in compensation from his employer.

Last September, a labour court granted the 51-year-old construction worker $93,000 in compensation over the accident. However, his employer, construction company Yao Xing, did not pay up.

Last Wednesday, the amount was increased to more than $122,800 in injury compensation and lost wages and Yao Xing was given 21 days to stump up the money.

But the construction company's director, Mr Lu Xiuqi, claims he cannot afford the payout because he had not insured the worker.

If he fails to pay up in time, he could be prosecuted by the Manpower Ministry (MOM) and fined up to $10,000, jailed for up to a year, or both.

In October 2014, Mr Tang had been working on the renovation of a terraced house in Jurong West.

Another worker on the scaffolding above him was using a rivet gun, and as Mr Tang looked up, a piece of metal from the gun fell into his left eye, slicing through the cornea.

He underwent surgery at Changi General Hospital and again at Singapore General Hospital. But last January, his left eye became infected and vision was eventually lost.

A spokesman for Healthserve, one of the migrant worker groups supporting Mr Tang, said such a delay is unusual. In most work injury cases its assists with, the employer usually pays up within a couple of months.

An MOM spokesman said investigations revealed that Yao Xing did not have a valid insurance policy to cover its liabilities as Mr Tang's employer under the Work Injury Compensation Act (Wica).

Employers are legally required to buy Wica insurance for foreign workers to secure their work permit. Failure to do so can result in a fine of up to $10,000, up to a year's jail, or both.

Insurance is only scrutinised by the authorities when the work-pass term starts, according to Migrant Workers' Centre (MWC) executive director Bernard Menon. Afterwards, it is managed as a contractual relationship between employer and insurer.

A failure to service the insurance policy or other lapses might go unnoticed until something befalls the worker.

The MOM convicted one employer for not insuring workers last year, down from two in 2014 and four in 2013.

In a letter to MOM's Work Injury Department in January, Yao Xing's Mr Lu said it is beyond the firm's means to pay Mr Tang's compensation or medical fees.

He also claimed Mr Tang's condition was partly due to "possible neglect" on the part of doctors in the hospitals that treated him, and said he had lodged a complaint with the Singapore Medical Council.

The Straits Times was unable to reach Mr Lu for further comment.

Migrant worker groups said they see a handful of cases each year in which an injured worker is uninsured, but this could be just the tip of the iceberg.

Humanitarian Organisation of Migration Economics operations manager Luke Tan has seen 10 such cases this year. He said these are of "serious concern" as the injured workers are likely to end up going home without compensation.

The MWC, which has sheltered Mr Tang for the past nine months, saw one other such case this year. The worker was owed $32,000, but ended up accepting a smaller sum and has since left Singapore.

Mr Tang is not sure he can stay in limbo for how much longer.

Floods hit his village in Jiangsu earlier this month, and he has lost touch with his family. He worries about them, especially his 90-year-old mother and grandson, three. "I can't do the work I used to," he said. "My home is gone. I have nothing left."


I can't do the work I used to... My home is gone. I have nothing left.

MR TANG ZENGSHUN, an injured construction worker who is waiting for compensation. His village in Jiangsu, China, was hit by floods earlier this month.

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

Companies Act - Companies (Amendment) Regulations 2016 (S 327 of 2016)

MAS announces policy posture on securities-based crowdfunding

17 Jun 2016

South China Sea ruling: About the arbitral tribunal

Straits Times
17 Jul 2016
Goh Sui Noi

The ruling on the South China Sea dispute has had critics questioning the authority of the tribunal, its source of legitimacy and the strength of its ruling. East Asia Editor Goh Sui Noi examines the processes that led to the findings and legal standing of the arbitration panel.

Q How did the Philippines start the arbitration process?

A The Philippines started the arbitration process against China on Jan 23, 2013, by issuing a Notification and Statement of Claim to the Chinese, in accordance with the dispute settlement provisions of the United Nations Convention on the Law of the Sea (Unclos).

China formally rejected the Notification and Statement of Claim, returning it to the Philippines on Feb 19, 2013. However, under Unclos, the refusal of one party to participate in the arbitration process does not bar it from proceeding.

As neither side has made known which of the four dispute settlement procedures under Unclos it would like to use, it is deemed that they have chosen arbitration by an arbitral tribunal constituted in accordance with Annex VII of Unclos.

The other three are the International Tribunal for the Law of the Sea (Itlos), the International Court of Justice and a special arbitral tribunal constituted in accordance with Annex VIII.

Q What is the five-man arbitral tribunal and what powers does it have?

A Parties to the case choose their arbitrators from a list of arbitrators that is maintained by the secretary-general of the United Nations. Each side picks one arbitrator and the other three are appointed by agreement between the two sides.

As China had decided not to participate in the case, the president of Itlos appointed China's arbitrator on its behalf. Itlos' president also appointed the other three arbitrators.

The tribunal determines its own procedure, with each party given full opportunity to be heard and to present its case. Decision is taken by a majority vote of the tribunal's members, and the award is final and binding and without appeal. It should be complied with by the parties to the dispute.

The expenses of the tribunal, including the remuneration of its members, are borne equally by the parties to the dispute. In this case, as China did not take part in it, the Philippines has paid its and China's shares of the expenses so far, leading the Chinese to question the credibility of the tribunal.

China has also insisted that the tribunal has no jurisdiction over the case as it involves sovereignty over islands in the South China Sea. But the tribunal in its first award in October last year said it had jurisdiction as matters submitted by the Philippines did not concern sovereignty but reflected a dispute that concerns Unclos.

Q What is Unclos?

A Unclos is a treaty concluded in 1982 that came into force in 1994. Ratified by 168 parties, including the Philippines and China, it establishes a legal order for the seas and oceans that promotes the peaceful use of the oceans and facilitates international communication.

It establishes rules for allocating and managing natural resources of the oceans and rules for protection and preservation of the marine environment.

An integral part of Unclos is the dispute settlement regime and when a party signs up to Unclos, it agrees in advance to the system of compulsory dispute settlement that can result in a final and binding decision.

Q What is the Permanent Court of Arbitration?

A The Permanent Court of Arbitration (PCA) is an inter-governmental organisation in The Hague that facilitates arbitration and other forms of dispute resolution between states.

In this arbitration case, it acts as a registry for the arbitral tribunal and provides administrative support to the tribunal.

While there have been frequent, loosely phrased references to the ruling as emanating from the PCA, strictly speaking the arbitration tribunal derives its authority from a body of international laws sanctioned by the UN.

Q Critics say the ruling is rubbish because it touches on sovereignty. Is this the case?

A This case is not about sovereignty but about maritime rights under Unclos. The tribunal did not rule on sovereignty.

In the case of China's claims to historic rights within the nine-dash line, such rights were extinguished when it ratified Unclos if those waters are now within the 200 nautical mile, exclusive economic zones (EEZs) of other coastal states.

Under Unclos, coastal states have rights to explore and exploit all living and non-living resources in their EEZs.

The tribunal also ruled on the status and entitlement of the reefs occupied by China, including whether they were entitled to a territorial sea or an EEZ.

Q Is the ruling invalid because Manila violated the DOC?

A The tribunal established in its October 2015 award that the 2002 China-Asean Declaration on the Conduct of Parties in the South China Sea "is a political agreement and not legally binding, does not provide a mechanism for binding settlement, and does not exclude other means of settlement". It came to the same conclusion with regards to joint statements of China and the Philippines on resolving their disputes through negotiation.

Q Is the ruling enforceable?

A The ruling is not enforceable because Unclos does not have an enforcement mechanism. Some analysts have pointed out that studies have shown that the vast majority of decisions by international courts and tribunals are implemented. However, others have said that where a ruling infringed on a great power's sovereignty or national security interests, it has never been accepted or complied with.

An integral part of Unclos is the dispute settlement regime and when a party signs up to Unclos, it agrees in advance to the system of compulsory dispute settlement that can result in a final and binding decision.

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

Accounting and Corporate Regulatory Authority Act - Accounting and Corporate Regulatory Authority (Filing Agents and Qualified Individuals) (Amendment) Regulations 2016 (S 326 of 2016)

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17 Jun 2016

Apex court to hear compensation lawsuit in rare case

Straits Times
16 Jul 2016
K.C. Vijayan

When homeowner Ng Huat Seng won a lawsuit against a contractor and its director who damaged his property during demolition works on a neighbour's unit, it was effectively a " paper judgment".

Esthetix Design failed to pay the $136,796 in damages and costs awarded in the State Courts last year to Mr Ng as it was apparently in financial difficulties and its insurers had repudiated liability for the company.

Mr Ng also obtained a default judgment against the company's owner Steve Lim in 2013 but to no avail as he did not show up in court.

He found it was not practical to pursue enforcement proceedings, such as winding up, as the costs of doing so were not likely to be recovered.

His next move however - seeking compensation from the neighbour for the contractor's negligent acts - is set to get a hearing at the top court after the High Court on Wednesday gave the go-ahead upon hearing the application from Senior Counsel N. Sreenivasan and lawyer Tan Cheow Hin.

The move is rare, as appeals for cases like Mr Ng's end at the High Court and cannot proceed for further appeal unless the judge who heads the case gives permission on grounds that points of law are involved.

The case arose after Esthetix carried out demolition works on a three- storey unit in Jalan Lim Tai See located behind Mr Ng's house in 2011.

Owner Munib Mohammed Madni had hired the company to turn his existing house into a three-storey detached structure with a basement and swimming pool, but debris from demolition works broke window panes, damaged four air-conditioner condenser units and cracked the backyard tiles.

Although successful in his negligence suit in the State Courts against Esthetix, Mr Ng failed in court to make Mr Munib liable for the damage as well.

Mr Ng appealed to the