Independent Directors Beware

In a significant prosecutorial and judicial milestone of sorts, two Independent Directors who were members of the Audit Committee of public-listed company, Transmile Group Berhad, were convicted for submitting a misleading statement on the company to Bursa Malaysia Securities Bhd.

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KUALA LUMPUR, Oct 28 (Bernama) -- Two former non-executive directors of Transmile Group Bhd were sentenced to a year's jail and fined RM300,000, in default six months jail, each by the Sessions Court here today for submitting a misleading statement on the company to Bursa Malaysia Securities Bhd.

Judge Datuk Jagjit Singh Banth Singh made the decision after finding Chin Keem Feung, 46, and Shukri Sheikh Abdul Tawab, 47, guilty of the offence.

In the judgment, Jagjit Singh said Chin and Shukri had failed to raise reasonable doubts against the prosecution's case at the end of the defence case.

However, the court allowed a stay of the sentence pending an appeal at the High Court.

The court also allowed Chin and Shukri's application to pay their fine in installments, with the first payment of RM150,000 to be paid today and the balance before Nov 30.

Chin and Shukri were charged with knowingly authorising the making of a misleading statement in the company's annual quarterly report on its unaudited revenue for the financial year ending Dec 31, 2006.

They were charged with committing the offence at Bursa Malaysia Securities Berhad, Exchange Square, Bukit Kewangan here on Feb 15, 2007.

The offence, under Section 122B(b)(bb) of the Securities Industry Act 1983 (ACT 280), carries a fine not exceeding RM3 million or to imprisonment for a term not exceeding 10 years or to both.

Deputy public prosecutor Shanti Geoffrey and prosecuting officer Nor Rifhan Rozi appeared for the prosecution, while Chin and Shukri were represented by lawyers Mohd Firuz Jaffril and Tan Hock Chuan, respectively.

Budget 2012 Real property gains tax: Gradual impact

The existing rate is not effective in curbing speculation and could jeopardise the ability of the low- and middle-income groups to buy houses, says Najib

Kuala Lumpur: The impact from the real property gains tax (RPGT) hike, a move to curb speculation in the property market, will be gradual.

RPGT is a tax on properties sold less than five years after they are bought. Only the profit from the sale of a property is subject to RPGT.

It has been doubled to 10 per cent for the first two years and will remain at the previous level of 5 per cent in the third, fourth and fifth year. There will be no tax on gains after the fifth year.

RPGT exemption on a residential property is given to both husband and wife on one residential property each, once in a lifetime.Yesterday, Prime Minister Datuk Seri Najib Razak in his 2012 Budget speech said that the existing rate of 5 per cent is not effective in curbing speculative activities and could jeopardise the ability of the low- and middle-income groups to buy houses.


These changes, he said, are low enough not to affect genuine property owners and will curb speculative activities.Chairman of the Property Management, Valuation and Estate Agency Division of the Royal Institution of Surveyors Malaysia Adzman Shah Mohd Ariffin said that the move will deter future sales of property within two years of purchase. 


With prices stabilising and should they sell fast, they will not be able to make a killing."But, for those who bought a property three years ago, the price appreciation would have been much higher than the 10 per cent RPGT imposed," Adzman said, adding that this category of buyers will continue to make a profit.According to him, properties can appreciate by 20 per cent or more once completed.


Real Estate and Housing Developers' Association Malaysia president Datuk Seri Michael Yam welcomed the move. "The fact that there is no drastic change to the ruling on RPGT encourages long-term ownership of property which also helps the owner with capital appreciation and wealth creation as they will hold on to the property longer," said Yam. 


He added that the first two years are effectively a 100 per cent increase, thus it will help discourage short-term speculation.


"It is a gentle/soft landing which will avoid a dip in the supply and demand of property," Yam told Business Times.


"The increase in this instance is not unreasonable, given that there are no speculative activities in the entire country but only confined to pockets of urban areas like Kuala Lumpur and Penang. 


These pockets of activities are insignificant compared with the total supply and demand for housing in Malaysia," he added. However, real estate agent Rahim & Co's managing director Robert Ang said the 10 per cent increase is not an effective measure to try and curb speculation activities."If you want to curb speculation, why not something higher?" he said.

Sourced from: BT