Thursday, 30 June 2011

MALAYSIA-Practice of Inflating Purchase Price in Sale and Purchase Agreements for the Purpose of Obtaining a Higher Loan Amount

Practice of Inflating Purchase Price in Sale and Purchase Agreements for the Purpose of Obtaining a Higher Loan Amount


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Circular No 133/2011
Dated 27 June 2011

To all Members of the Malaysian Bar

Practice of Inflating Purchase Price in Sale and Purchase Agreements for the Purpose of Obtaining a Higher Loan Amount

The Conveyancing Practice Committee ("CPC") of Bar Council recently received a query from a Member of the Bar on how to deal with the practice of inflating purchase price in sale and purchase agreements for the purpose of obtaining a higher loan amount.

CPC notes that in general, a request to inflate the purchase price in a sale and purchase agreement originates from a purchaser who wishes to fraudulently misrepresent to his financier that he is buying the property at the inflated price so that he can secure a higher loan.

After having considered advice given by the Criminal Law Committee of Bar Council, CPC is of the view that:

(a) in a transaction where both the vendor and the purchaser agree to increase the purchase price for the purpose of enabling the purchaser to obtain a higher loan, the vendor or the purchaser and/or both may be guilty of the offence of cheating or fraud, or abetment, as the case may be, which are offences punishable under the Penal Code;

(b) if a solicitor acts, either for the vendor or the purchaser, and has full knowledge of the increase in price for the purpose stated in (a), and prepares the sale and purchase agreement or related "side arrangements", the solicitor may also be guilty of the offence of cheating or fraud, or abetment, as the case may be, which are offences punishable under the Penal Code; and

(c) in any event, a solicitor who acts in the circumstances described in (b) may be guilty of misconduct within the definition ascribed to it in section 94(3) of the Legal Profession Act 1976.

Members are therefore advised not to be a party to such a practice.

Thank you.


Abdul Murad b Che Cik
Chairperson
Conveyancing Practice Committee

MALAYSIA-Press Release: Democratic rights – protect and promote, not stifle, them

Subject: Press Release: Democratic rights – protect and promote, not stifle, them


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Press Release
Democratic rights – protect and promote, not stifle, them

The Malaysian Bar regrets the Malaysian Government's wanton, unjustified and wholly disproportionate crackdown on freedom of movement, expression and assembly this past week. Various individuals have been summoned by police for questioning or to have their statements recorded, and numerous others have been arrested nationwide, some merely on the basis of their attire. Today alone, the police raided the office of the BERSIH 2.0 secretariat and arrested some of its staff, and various arrests were also made in Perak.

Most alarming has been the arrest and remand for seven days of a group of individuals (including two juveniles in their teens) in Penang, who are now being investigated under section 122 of the Penal Code for allegedly "waging war against the Yang Di-Pertuan Agong". The unreasonable and unwarranted use of this provision, which provides for potentially severe penalties, and the length of the detention period reflect the Government's determination to clamp down on the citizenry's right to express their viewpoints peaceably and to intimidate anyone wishing to exercise that right.

Repeated calls for the Government to embrace the public's increased articulation of viewpoints as a positive development in our society, and to accord it the necessary democratic space to flourish, continue to fall on deaf ears. The Government has indicated its intention to review section 27 of the Police Act to allow more latitude for public rallies, but its recent actions stand in stark contradiction to this avowed goal.

The Malaysian Bar reiterates that we support and defend any individual or group's fundamental freedom to speak, assemble or walk in support of a cause, if the freedom is exercised responsibly and peaceably. We commend SUHAKAM, the Human Rights Commission of Malaysia, for also speaking out earlier this week to remind the Government of the people's rights of assembly and expression, as enshrined in our Federal Constitution and the Universal Declaration of Human Rights.

Malaysia is a member of the UN Human Rights Council, and was recently elected as chairperson of the Third Committee for the forthcoming 66th session of the UN General Assembly, which is responsible for tackling social, humanitarian and human rights issues. Furthermore, our Prime Minister showcases Malaysia as a moderate and progressive nation.

It therefore behooves the Government to speak and act consistently both domestically and internationally, by protecting and promoting democracy and human rights, not restricting or stifling their exercise.

The Malaysian Bar is concerned about the current tendency of various quarters, including certain media, to sensationalise the issues and demonise those who are involved. Irresponsible journalism and inflammatory remarks that are unchecked can unleash dangerous forces in society. We call on all individuals and groups to engage in civil discourse and a mature exchange of views.

The Malaysian Bar urges the Government to act reasonably, responsibly and proportionately, and to recognise and uphold the clear wish of the people to assemble peaceably and to express their opinions. The police has shown that it is possible for peaceful public rallies to take place when organisers of such gatherings and the police cooperate with each other.

We therefore call on the police to permit all walks and public rallies, and the activities leading up to them, to take place peacefully and with minimal disruption, while preserving public order and ensuring the safety of all participants.


Lim Chee Wee
President
Malaysian Bar

29 June 2011



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