When you set a goal for yourself

I am currently on holiday in Thailand in a small island called Phi Phi Island. We have been to here before and we know what we want to see or do.

There is a Viewpoint on the hill of the island and the climb can turn your legs to jelly if you don't have the determination.

Yesterday, I left my wife with the intention of going to another part of the island. I got sidetracked when I see one road leading to a viewpoint which I thought was difference from the one that I know of.

So, I climbed.

It was steep and I nearly gave up.

Then a girl, of Eurasian origin cut me off. Walking very fast. Without breaking a sweat.

Being a man with the normal ego that a man is supplied with, I gave chase.

The reward?

We actually enjoyed the view together as she also asked me to take a picture of her.

My legal firm Facebook fan page (re)launch

As most of the readers of this blog should know by now, I own a medium size legal firm here in Malaysia and last Monday, I did a small event at my office to relaunch a Facebook page which I have created for my legal firm in 2007 but was very little promoted. As social media in Malaysia and most part of the world is currently being the 'in' thing, I realised the potential that a Facebook will have in promoting my firm and whatever activity that I may held at my firm (such as the launch of my first book, which is another matter altogether).

The event was a success although those who did RSVP'ed to the event through Facebook and other method did not all turned up. However, we had enough food, satisfied lucky draw winner (I think) and friends old and new. I am quite active in the social media circle as you might have read that I attend events and befriend so many bloggers and social media advocates since I started blogging nearly 2 years ago.

The event was simple. A prayer, a speech by me where I introduced my legal firm, the reasons why I use Facebook to promote my legal firm and an announcement about my first book (which I will blog later), a shorter speech by my partner, a cake cutting ceremony by my partner as it was her birthday and a lucky draw while the guests tucked in into their meal.

Let me not bore you with what happened at the event anymore as you can see all the photos from the events through this link : Pictures from KSH Facebook launch but here are some pictures :

 My staff

 Me introducing my book

My partner with her special birthday cake

Some of the bloggers and guests who were there that day

Independent Director and Audit Committee Board Member

This is not a how-to guide or a detail explanation of a duty of an independent director or an audit committee member in a listed company. This is more of a rant of a member of an audit committee with the recent amendments to the listing requirements of Bursa Malaysia (not sure is this allowed or not but this is just a personal opinion)

I have been an audit committee member of a public listed company since 2006 in which I was given the task to be an independent non-executive member of the Board of Director. An independent non-executive Board of Director member is someone who is independent of the management of the company and is not holding any post at all in the company. Among them, it is also required for at least one of them to be competent in accountancy and one of the next best thing is a lawyer (which I am). So, there you have it, at the moment I was appointed I was actually over my head.

If you know my full name, and if you ever google it (I did!), you will find which company. It may seems like a big deal but let me tell you that in term of fiduciary rewards, it is not. You will  only get some allowance south of RM3,000 if you are lucky and maybe lesser if you not so lucky. I remembered the gossips that all of us had when I attended the compulsory course I had to attend conducted by Bursa Malaysia (the Malaysian stock exchange) when we were to be appointed to the Board. Most of us felt we are not paid enough with the responsibilities that we carry. And one of those in attendance in that course was a former Federal Court judge!

That is what most of us are lamenting about nowadays when we hear that an audit committee  member can be found at fault if they did not disclose any indiscretion or anything which will devalue the share of a company especially those dubious investments company can sometimes make. It means that we are supposed to know everything the company do as if we are the management. It also require us to have communications with the employees as if we mingle with them every other day. They have just launch a whistle blowing policy in Malaysia due to a few corporate scandals which have been happening all over Malaysia. We are to reprimand the management and also to report any mismanagement to the authorities which can be Bursa or the Securities Commission. Not so easy if we are to have nothing to do with management isn't it?

Yes, we can question the Board of Directors (those in management) when we have the meeting but being entrepreneurs, we can't actually stifle them can we? If they want to invest in something, I usually try to question the viability of the project and sometimes, at the risk of sounding trying too hard ( which I don't really care as long as I discharge my duty), I do step on a few management toes. But, I do give a caveat in a form of the trust that I have in the founder of the company which had actually founded the company in the 70s himself. He did dabble in politics but that seems to be going downhill after March 8, 2008, which makes him concentrate on his company again.

As much as I like to rant, being an investor myself, I am actually someone who believe in what the authorities are doing (in contrast with the politicians). As much as I hate being on a tight leash as an independent director and an audit committee member, I understand the rationale of it and is all for it. That is why sometimes, as much as I love the idea of entrepreneurship as the next entrepreneur, when you raise money from the public for your listed company, you need to know you are already in a different ball game...

Real Property Gain Tax amendment finally out

Buying for investment? Factor in RPGT too

Of course the government has announced it month ago and seems to have imposed it immediately when New Year comes. There were two announcements made with regards to Real Property Gain Tax in 2009 which basically announced the resurrection of the dormant RPGT, as it is widely known, after it was put to sleep in April 2007. Everyone was happy when it was announced in 2007 that Malaysian who sold off their properties is not subjected to any more tax. As Malaysians do not have to declare any of their assets in their income tax (except for companies and individual who wants to get the benefit of paying interest to finance the purchase of their properties), within April 2007 until December 2009, Malaysia got away with the full profit of selling and making a profit of any house they owned.

Then in Budget 2010, the Prime Minister announced the return of the dreaded RPGT. Everyone was surprised of its severity as ANY transaction will be subject to RPGT. Which means that anyone selling his or her property, if they make a profit, they will have to pay a flat tax of 5%. Which means that, if you make a profit of RM10,000, your RPGT will be RM500 (this is a simplistic explanation without any exemption being taken into account). All this is supposed to be imposed on the people immediately on 1.1.2010.

Then, in another announcement, at the very last moment before the date of implementation, the Prime Minister announced a kind of reversal which gives the people some kind of reprieve. Basically, the government decided to give a kind of an exemption (which may not last forever) to the people in which only properties below 5 years being held by an individual will be taxed. How the tax is calculated is another matter.

So, what is the salient points of the new RPGT? Here are the basic operation of the new RPGT :

1) You will have to submit the forms for the determination of RPGT called CKHT 1 (for seller) and CKHT 2 (for buyer), either you think you will be taxed on the sale of your property or not. Even if you held the property more than 5 years, my advice is to ensure that you have submitted your form to the nearest Lembaga Hasil Dalam Negeri (LHDN). When you get an exemption letter or better known as a clearance letter, only then will you be in the clear.

2) You have to file these forms within 60 days of the signing of your Sale & Purchase Agreement. When it says 'days' there, it means 'working days'. It was changed from 'one month' to '60 days' in the Real Property Gain Tax Act.

3) The next important point is that the buyer (referred to as the acquirer in the Act) of the property has to forward a sum of two percent (2%) from the total purchase price to the LHDN regardless whether the buyer (or the seller) thinks he will or will not be taxed.

This is a very controversial and unprecedented piece of law in which the buyer has to pay this 2 percent regardless of any reason and can only be returned if it is determine that the seller is not liable to pay any RPGT or if he has to, it will be utilised for the payment of such amount.

 

These basic points are the important points that people must know about Real Property Gain Tax.

Just a reminder, all lawyers will offer the service of filing and ensuring you get the letter of clearance or make the necessary payment to LHDN. The burden of retaining the 2% of the purchase price and its payment under the law is on the acquirer or better known as the buyer. Buyer will be subject to penalty if he does not act on this. However, once you appoint a lawyer to do the filing of CKHT 1 or CKHT 2, the burden will be shifted to the lawyer under the Contract for Service you have appoint him under. Of course, as the buyer, you will be the one who will be penalised, if it was found you fail to file or pay anything to LHDN under RPGT but then, if you have a lawyer, you can claim the failure on him (unless he can prove back that you were at fault or he has done everything his power to enforce this part of the Act on you)

p/s : There are other explanations in the amendment about the calculation of RPGT which are actually done by LHDN (meaning you can huff and puff but in the end they are the one which will determine how much is the RPGT you have to pay) but as a lawyer, I am too dumb to understand it. Let me give you an example the wordings used :

"is the amount of tax charged on the chargeable gain on the person at the appropriate tax rate reduced by the amount of tax charged on such chargeable gain at the rate of five per cent"

Huh?

p.p.s : Every time I tell my wife of such a piece of law exist, she will coolly says, "Wasn't it drafted by a lawyer?"

The making of company pictures

Last Friday, we had fun taking some official office pictures for our company profile. The last time we had a real photo shoot was when we officially open our firm in November 2007. All the pictures of our partners, our staff and our office that the clients see in our company profile were at least 2 years old. Not that we changed much from then (My weight did yo-yoed from heavy then slimmed a bit then back to heavy, making me back to what my weight was before) but we do love to take pictures.

So, here are some of the making of pictures where our official photographer Evo  from euveng.com who did a superb job and was patience enough with all the impromptu request for personal shots after the official photo had been taken.

If you want to see the full pictures which have been posted in Facebook, you can join our fan page here :

Khairul, Suhaila & Hazlina Facebook fan page