Malaysia-Come and Vote in Favour of the Building Fund Motion (AGM, 14 Mar 2015)

Come and Vote in Favour of the Building Fund Motion (AGM, 14 Mar 2015)






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Circular No 039/2015
Dated 4 Mar 2015
To Members of the Malaysian Bar
Come and Vote in Favour of the Building Fund Motion (AGM, 14 Mar 2015)
The Bar Council will table a motion proposing an increase in the amount of subscription to the Building Fund at the 69th Annual General Meeting ("AGM") of the Malaysian Bar on 14 Mar 2015 (Saturday).  The reasons underlying the need for the increase, which is in the immediate and long-term interest of the Malaysian Bar, are described below.
                                                     
The Bar Council Building Fund
The Bar Council had, at its meeting on 2 Mar 1979, decided to impose an annual levy of RM100, payable by each Member of the Bar, towards the Building Fund.  The monies in the Building Fund are to be used to purchase buildings not only to house the Bar Council Secretariat ("BC Secretariat") but also the State Bar Committee Secretariats, as well as to cover expenditure relating to repayment of loans taken to finance the purchases.
Since then, using the Building Fund monies, the Malaysian Bar currently owns a total of 13 properties that house the BC Secretariat and various State Bar Committee Secretariats, as follows:
(1) Penang (1991 and 2012)                                                           RM1,200,000
(2) Pahang (1995 and 2011)                                                           RM510,000
(3) Malacca (1996 and 2012)                                                         RM1,092,000
(4) Perak (1999)                                                                           RM330,000
(5) BC Secretariat (2002)                                                              RM10,829,080
(6) Selangor (2005)                                                                       RM743,480
(7) Negeri Sembilan (2005)                                                            RM346,000
(8) Kedah (Kedah / Perlis, as it then was) (2006)                            RM320,000
(9) Johore (2011)                                                                          RM850,000
(10) Kelantan (2013)                                                                     RM850,000
 No property has yet been purchased to house the Kuala Lumpur, Perlis and Terengganu Bar Committees, which are still operating from rented premises.
Staggering wastage due to annual rental payments
The BC Secretariat is substantially located in a property owned by the Malaysian Bar, but the following are situated in rented premises:
Entity
Location
Rental
(per annum)
Advocates and Solicitors Disciplinary Board Wisma Maran RM334,800
Raja Aziz Addruse Auditorium Straits Trading Building RM248,268
Kuala Lumpur Bar Committee Wisma Hangsam RM169,646
Bar Council Legal Aid Centre (KL) Wisma Hangsam RM115,080
Risk Management and Professional Indemnity Insurance ("PII") Department Wisma Maran RM39,000

Total

RM906,794
Overall, the Malaysian Bar is wasting in excess of RM900,000 each year in rental payments, with monies being drained from the Bar Council Main Fund, the Discipline Fund, the Legal Aid Fund, and the funds of the Kuala Lumpur Bar Committee.
History of the BC Secretariat premises      
From 1976 to 1986, the BC Secretariat occupied two lots in Wisma Central on Jalan Ampang.  As the size of the BC Secretariat expanded to cope with the increasing membership, the BC Secretariat first moved to No 3 and No 5, Jalan Tun Perak in 1986, and then to Wisma Kraftangan in 2000, where three floors were rented to house the BC Secretariat.  In 2003, the BC Secretariat moved into the present building at No 15, Leboh Pasar Besar. 
Due to space constraints, the Bar Council Library and the Auditorium have often been situated separately from the BC Secretariat premises.  From 1984 to 1987, the Library was housed in the premises of the then Federal Court (in the Sultan Abdul Samad Building) on Jalan Raja, and subsequently on the 5th floor of the Straits Trading Building from 1987 to 1997.  From 1997 to February 2003, both the Library and the Auditorium were located in the Loke Yew Building on Leboh Pasar Besar. 
When the Malaysian Bar purchased its present building on Leboh Pasar Besar in 2003, the Library and the Auditorium were situated in the BC Secretariat building.  However, due to an acute lack of space, the Raja Aziz Addruse Auditorium had to be shifted out of the BC Secretariat building to rented premises in the Straits Trading Building in mid-July 2014.
Some of the infrastructure problems that continue to plague the BC Secretariat in its Leboh Pasar Besar building include the following:
(1) Staff still work in cramped conditions;
(2) The lack of meeting rooms for the use of Bar Council committees, which carry out a multitude of important activities in the interest of the Malaysian Bar and the public;
(3) The Library faces space constraints and is not accessible by lift; and
(4) There is a complete lack of parking facilities at the BC Secretariat building for Members of the Bar and visitors.
Solution — Purchase of a new building
The solution to the shortage of space and the wastage of money spent on rental payments each year is to purchase a building sizeable enough to house the BC Secretariat, the Kuala Lumpur Bar Committee, Raja Aziz Addruse Auditorium, Bar Council Legal Aid Centre (KL), Advocates and Solicitors Disciplinary Board, and Risk Management and PII Department, under one roof.
It certainly makes prudent financial sense to move forward with this plan, as there will be significant savings in terms of rental payments and maintenance costs for the various premises, which will translate into immediate and substantial savings for the Malaysian Bar.
Facts and figures
The membership of the Bar has grown rapidly. In 2003 (when the BC Secretariat moved to its current premises) there were roughly 11,200 active practitioners.  Today the number of Members stands at approximately 15,700, which is a remarkable increase of 40% over a 12-year period.  There has been a corresponding increase in the number of BC Secretariat employees needed, in light of the increased workload, to cater to the range of activities and services provided to Members and the public.
It is projected that the ideal amount of space required for the BC Secretariat to function effectively and efficiently is approximately 50,000 square feet.  An additional 30,000 square feet of space is required to accommodate the Kuala Lumpur Bar Committee, Bar Council Legal Aid Centre (KL) and Advocates and Solicitors Disciplinary Board. 
A purchase of a building of 80,000 square feet in Kuala Lumpur will cost between RM50 and RM55 million.  The current market value of the present BC Secretariat building is conservatively assessed at between RM15 and RM18 million, whereas the available cash balance in the Building Fund is RM5.55 million (as at 28 Feb 2015).  Even if we cross-borrow from the other funds of the Malaysian Bar, we would still not be able to purchase such a property unless we take a commercial loan of approximately RM25 million.  In order to service such a loan, an increase in the amount of subscription to the Building Fund would still be necessary.
The Bar Council is thus moving a motion to seek an increase of RM150 to the amount of annual subscription to the Building Fund, for a limited period of 15 years.
Although we have inspected prospective buildings in the last few years, we have not been able to realise our intention to purchase any of them, in light of the significant shortfall in the finances available in the Building Fund, when measured against the budget required for such a purchase.
The increase in subscription that is being sought will not only stop the annual wastage of funds due to payments for rented properties in the Klang Valley, but will also allow the Bar to fulfil its target of purchasing properties to house the Perlis and Terengganu Bar Committees.
Come and vote in favour of the Building Fund motion
The longer we delay in taking the necessary steps to purchase a building, the more difficult it will be to achieve this goal — the more our funds will have been drained, and the higher the prices of buildings will have become.  It is really no longer a question of whether we will buy a building, but merely when the purchase will be made.   
We therefore urge Members to critically assess our financial position and to take concrete and immediate action to stem the wastage — which is in excess of RM900,000 per year — resulting from rental payments by the Bar.
We strongly urge Members to make the prudent — and right — choice.  Vote to save RM1 million in rental expenses each year and to strengthen the financial standing of the Bar. 
Come and vote in favour of the Building Fund motion!
We look forward to seeing you at our AGM on 14 Mar 2015.
Thank you.

Karen Cheah Yee Lynn
Treasurer
Malaysian Bar

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