Did Huawei violate Iran sanctions? No, it shows deeper US-China battle for global influence as power coming from high-tech sector


Professor Dr. Wang
Former Executive of Halliburton

DID HUAWEI VIOLATE IRAN SANCTIONS?

No, they didn’t.

CFO Meng was arrested supposedly for “violating Iran sanction”. This has to be the most grotesque distortion of justice since the US was the country who unilaterally pulled out IN VIOLATION of an agreement they had signed with multiple nations earlier !!! In other words, the guy who broke a solemn promise made, violated the agreement, then made sanction an American domestic law is now force feeding this law arbitrarily on the rest of the world by arresting someone who refuses to violate the agreement ! Is this making any sense to anybody?

Huawei created a subsidiary to do business with Iran, and the CFO is being charged with lying about the relationship between Huawei and the subsidiary.

This seems totally ridiculous to me since when I worked at Halliburton, we did EXACTLY the same thing ! Not only was our CEO never arrested, he was invited to join the government & became Vice President Dick Cheney !!!!!!!

The moral of this story is for normal businesses to be extremely vigilant & recognise the true faces of America & Saudi! One tosses you in jail for breaking twisted laws they make up as they go along & the other goes after you with a bone saw. Both are gangsters, far worse than the Mafia, because the Mafia at least have the decency to commit crimes secretively, while the thugs in American & Saudi governments commit their crimes blatantly in the open, with complete disregard to the laws & sovereignty of another country, bullying their way through, trying to justify their actions by smearing the victims… then run publicity campaigns to sway public opinions while accusing others of crimes against human rights.. ??!!

I am sure there are nice people in USA & in Saudi & i don’t want to generalise, but i have seen time & again in the States that if ever their oversized egos feel threatened, they can turn into totally evil, nefarious subhumans capable of the most despicable deeds.

The arrest of Meng is a case in point.

I went to the States starry eyed with high hopes & expectations, ready to learn a democratic system far superior than ours. Well, after my Ph.D and a few working years, I stand corrected.

Life in the States has taught me to be proud of my people and my country. Grass is definitely NOT greener on the other side. America is very strong in “hypes”, they talk big but deliver little. China does the opposite. American government spends on military, lives in “now”, supports the rich, & works for re-election. The Chinese government spends on infrastructure, works for the people, eradicated poverty & follows 5-30 year plans. These are facts, not propaganda, not campaign promises.

I can’t tell you how happy I am to be home again. Not only is the food much better, more importantly, I can finally stop worrying myself sick… about my elderly mom getting mucked, my attractive wife getting raped…my children getting bullied, drugged or shot in schools…Having to live in constant fear everyday is the ultimate violation of my human rights.

Gosh, it’s good to be back in civilisation.

Dr. Wang Wins Halliburton

Huawei clash shows deeper US-China battle for global influence as power coming from high-tech sector

Bail hearings proceeded this week after Meng Wanzhou(pic), the chief financial officer of Huawei Technologies Co, was arrested in Canada on Dec 1 because of alleged violations of US sanctions against Iran. The case threatens to derail a trade truce struck the same day between Donald Trump and Xi Jinping.

HONG KONG: The Trump administration has insisted the arrest of a top Huawei executive has nothing to do with trade talks. In Beijing, it’s just the latest US move to contain China’s rise as a global power.

Bail hearings proceeded this week after Meng Wanzhou, the chief financial officer of Huawei Technologies Co, was arrested in Canada on Dec 1 because of alleged violations of US sanctions against Iran. The case threatens to derail a trade truce struck the same day between Donald Trump and Xi Jinping.

Even if the two leaders manage to strike a broader deal, the arrest shows that the US-China conflict goes far beyond trade. The world’s biggest economies are now engaged in a battle for global influence that will ultimately determine whether the US remains the globe’s predominant superpower, or China rises as a viable counterweight.

“The sentiment in Washington now is not just a Trumpian mercantilism – the desire to bring back factory jobs to Wisconsin or wherever,” said Nick Bisley, a professor of international relations at La Trobe University in Melbourne who has written books on great-power politics. “It is a desire to significantly cut ties with China because of that larger perception it presents a strategic risk.”

A bipartisan consensus has emerged in Washington that China’s entry into the World Trade Organisation hollowed out US manufacturing and allowed it to grow rich. That increased economic power is now at a point where it risks eroding key American military advantages around the globe.

China insists it plays by the rules, and doesn’t challenge US dominance. Even so, three areas in particular worry American strategic planners: Technology, the dollar and the ability to project military power overseas.

A year ago, the White House identified China’s growing technological prowess as a threat to US economic and military might. American companies have long argued that China forces them to transfer intellectual property and sometimes steals trade secrets – all of which Beijing denies.

In justifying tariffs, Trump’s team has cited Beijing’s “Made in China 2025” strategy to become a global leader in state-of-the-art technologies from aerospace to robotics. So far, China has resisted those demands, arguing that doing so would crush its economic potential.

Huawei in particular epitomises the threat. Earlier this year, Trump blocked Broadcom Inc’s US$117bil hostile takeover bid for Qualcomm Inc over concerns that Huawei would end up dominating the market for computer chips and wireless technologies.

The fear is that wireless carriers may be forced to turn to Huawei or other Chinese companies for 5G technology, potentially giving Beijing access to critical communications. Those concerns have prompted the US to ban Huawei’s products for government procurement, and Australia, Japan and New Zealand have reportedly followed.

China has fought back, with foreign ministry spokesman Lu Kang saying this week that Huawei didn’t “force any enterprise to install forced backdoors.”

“The competition is really focused in the areas where future strategic and economic dominance come from,” said Michael Shoebridge, director of the defense and strategy programme at the Australian Strategic Policy Institute.

“The Huawei arrest is right in the middle of this because both America and China see their future global power as coming from the high-tech sector.”

The dominance of the dollar has allowed the US to effectively control the world’s financial system, underpinning its superpower status. Yet Trump’s increased use of sanctions to assert its foreign-policy goals has prompted a wide range of nations – from China to Russia to the European Union – to look for an alternative.

The Trump administration added nearly 1,000 entities and individuals to its sanctions list in its first year, almost 30% more than the Obama administration’s last year in office, according to law firm Gibson Dunn. The complete list now runs to more than 1,200 pages.

Sanctions are a key tool for the US to subdue potential adversaries like North Korea, but they also can affect friends and allies. The EU, which objected to reimposing sanctions on Iran, this month unveiled plans to mitigate the so-called “exorbitant privilege” of the dollar.

During a visit to China last month, Russian Prime Minister Dmitry Medvedev said the two nations were looking at ways to boost the use of their currencies through allowing the use of China’s UnionPay credit card in Russia and Russia’s Mir card in China. “No one currency should dominate the market,” he said.

“We are potentially at the beginning of a systemic shift that may take some time to play out,” said Gregory Chin, associate professor at York University in Toronto, and a political economy specialist. “The political will is building and coalescing.” — Bloomberg

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In custody: A profile of Meng is displayed on a computer at a Huawei store in Beijing. The Chinese government, speaking through its emb.

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Huawei Surprise goldfish in a bowl


Uncertain future: In this courtroom sketch, Meng sits beside a translator during a bail hearing in Vancouver. She
faces extradition to the US on charges of trying to evade US sanctions on Iran. – AP 
The arrest of Huawei ‘heiress’ has thrown a rare spotlight on the family of the reclusive smartphone giant founder, Ren Zhengfei.

WHEN Huawei CFO Sabrina Meng Wanzhou appeared on Wednesday in a Vancouver courtroom, clad in an unbranded green tracksuit, the moment was witnessed by a single reporter from the local Vancouver Sun newspaper who happened to notice her name on the hearings list that morning.

By the end of the day, Meng’s arrest in Canada at the request of Washington was the biggest story in the world.

And when her bail hearing resumed on Friday, Meng entered court to see about 100 reporters, craning to look at her through two layers of bulletproof glass.

Meng who faces extradition to the United States, was charged for helping Huawei allegedly cover up violations of US sanctions on Iran.

Like many top Chinese executives, Meng is a mysterious figure even in her home country, but the 46-year-old chief financial officer of Huawei Technologies had been widely tipped to one day take the helm of the tech giant her father founded.

That was until her shock arrest, a move that has entangled her in the protracted diplomatic tensions between Washington and Beijing.

Crucially, Meng is the daughter of Huawei founder Ren Zhengfei – one of China’s leading businessmen, an ex-People’s Liberation Army officer and an elected member of the 12th National Congress of the Communist Party of China.

In other words, Meng is part of China’s elite.

Her father Ren moves in the highest government circles in China and founded Huawei in 1988, after he retired from the Chinese armed forces. Born into a rural family in a remote mountainous town in the southwestern province of Guizhou, Ren rose to the equivalent rank of a deputy regimental chief in the PLA and served until 1983, according to his official Huawei biography.

Officials in some governments, particularly the United States, have voiced concern that his company is close to the Chinese military and government. Huawei has repeatedly insisted Beijing has no influence over it.

Ren is one of the most watched entrepreneurs in China and was on Time magazine’s list of 100 most influential people in the world in 2005 and again in 2013.

But like his elder daughter, Ren has largely kept a low profile.

Ren has married three times. His first wife was Meng Jun, daughter of a former senior official in Sichuan province, Meng Dongbuo; she bore Ren two children: Sabrina Meng Wanzhou and a son, Meng Ping.

Meng’s current wife is Yao Ling, who gave him a younger daughter, Annabel Yao, 20. In a rare move, the three posed last month for a family photoshoot for French lifestyle magazine Paris Match. Annabel, a Harvard computer science student, became a sensation at last month’s Le Bal des Debutantes (or Crillon Ball) in Paris.

Ren’s third wife is Su Wei who, according to Chinese media reports, is a millennial who was formerly his secretary.

Interestingly, all his children opted not to take on their father’s surname – Meng adopted her mother’s surname after her parents divorced. According to Chinese news websites, Meng’s brother Ping, who also works for Huawei, followed her in taking their mother’s surname to “avoid unnecessary attention” – though the son was also known as Ren Ping in the past.

(This practice is not uncommon among the families of China’s elite. The co-founder of Chinese auction house China Guardian, Wang Yannan, opted not to take her father’s surname – she is the daughter of late Chinese premier Zhao Ziyang.)

Born in 1972, Meng joined the company in 1993, obtained a master’s degree from Huazhong University of Science and Technology in 1998, and rose up the ranks over the years, mostly holding financial roles.

In her first media appearance before the Chinese press in 2013, Meng said she had first joined the company as a secretary“whose job was just to take calls”.

In the interview with China’s 21st Century Business Herald, Meng said she began her first job at China Construction Bank after graduating with her first degree in 1992.

Arrested Meng: Like her father, the Huawei CFO had led a quiet life, out of the spotlight. – Reuters

Arrested Meng: Like her father, the Huawei CFO had led a quiet life, out of the spotlight. – Reuters

“I joined Huawei one year later because a branch closed its operations due to the business integration [of CCB],” said Meng, describing her early jobs in Huawei as “very trivial”.

Meng has served in various roles at the company since, until her latest role as the Hong Kong-based CFO of Huawei.

In 2003, Meng established Huawei’s globally unified finance organisation, with standardised structures, financial processes, financial systems, and IT platforms.

Since 2005, Meng has led the founding of five shared service centers around the world, and she was also the driver behind completion of a global payment center in Shenzhen, China. These centres have boosted Huawei’s accounting efficiency and monitoring quality, providing accounting services to sustain the company’s rapid overseas expansion.

Meng has also been in charge of the integrated financial services (IFS) transformation program, an eight-year partnership between Huawei and IBM since 2007. This has helped Huawei develop its data systems and rules for resource allocation, and improve operating efficiency and internal controls.

In recent years, Meng has focused on advancing detailed financial management at Huawei, working to align these efforts with the company’s long-term development plans.

Meng’s importance at Huawei became apparent in 2011, when she was first named as a board member. Company insiders describe her as capable and hardworking. Earlier this year, Huawei promoted Meng, to vice-chairwoman as part of a broader reshuffle. Meng is one of four executives who hold the vice-chair role, while retaining her CFO position. Despite assertions by Ren that none of his family members would succeed him in the top job, it is widely speculated that she was being groomed to take over the reins of the company eventually.

Married with a son and a daughter, Meng’s revelation that her husband did not work in the industry, dispelled the speculation she was married to a senior Huawei executive.

Meng did not conduct public interviews before 2013 and has seldom mentioned her personal life until recently, when she used her son to illustrate the importance of persistence.

“My son did not want to go swimming one day and he almost knelt on the ground and begged my husband so that he would not have to go. But he was rejected,” Meng said in a speech at Chongqing international school in 2016. “Now my son is proud to represent his school in swimming competitions.”

Meng recently made a speech at a Singapore academic conference in 2018, in which she talked of Huawei’s future role in technology development.

“Without universities, the world would be left in darkness. Without industry, science would be left in the ivory tower,” said Meng. “The fourth industrial revolution is on the horizon and artificial intelligence is one of its core enabling technologies. Huawei is lucky to be part of it.”

While her brother, Meng Ping, as well as her father’s younger brother and his current wife all work at Huawei and related companies, none has held such senior management roles.

“The other family members are in the back office, Sabrina is CFO and sits on the board,” a Huawei source said. “So she is viewed as the boss’s most likely successor.”

But her fate now is uncertain.

She faces up to 30 years’ jail for the alleged crime. Her lawyer in Canada, David Martin, had told the court that Meng posed no flight risk and should be granted bail. To flee would shame her in front of her father and all of China, said Martin.

“Her father would not recognise her. Her colleagues would hold her in contempt. She would be a pariah,” he said.

Meng leaned forward in her seat and dabbed at her eyes with a tissue.

When the hearing adjourned, she was led away with her head bowed, a goldfish in a bowl that is the biggest story in the world. – South China Morning Post

Younger Huawei daughter: ‘I’m just a normal girl’

Arresting Yao: ‘My daily life is actually pretty boring compared to this.’

JUST last month, the reclusive Huawei founder Ren Zhengfei made headlines by appearing in French lifestyle magazine Paris Match with his younger daughter and current wife.The daughter, Annabel Yao, 20, posed with a smile in front of a grand piano with her mother, identified by the magazine as Yao Ling, and Ren, who wore a blue shirt with his hand resting on her shoulder.

Suddenly, the whole family are making headlines again – even if for quite different reasons.

Few outsiders had previously heard of the younger daughter, a Harvard computer science student and ballerina. But Yao recently made a high-profile appearance at the exclusive Le Bal Debutante ball in Paris.

While Le Bal des Debutantes in Paris each year is a nod to the tradition of young society ladies entering the elite social scene of Europe, these days it courts modern debutantes, aged 16 to 21, who are chosen for their looks, brains and famous parents – prominent in business, entertainment and politics.

They parade in glamorous couture gowns, waltz with their cavaliers – young men who accompany the “debs” for the evening – and take part in photo shoots and interviews.

The schedule at the event, organised by Ophélie Renouard, is full of young women such as Baroness Ludmilla von Oppenheim, from Germany; Julia McCaw, daughter of AT&T founder Craig McCaw; and Yao – one of three debutantes chosen for the opening waltz this year.

“I definitely treated this as a debut to the world,” said Yao after the ball. “From now on, I’ll no longer be this girl living in her own world, I’ll be stepping into the adult world where I have to watch my own actions and have my actions be watched by others.”

Today’s Le Bal, is a diverse affair, a microcosm of the shifting tides of the global elite. Of the 19 debutantes of 2018, there were young ladies from India and America, Europeans from Portugal, France, Belgium and Germany, as well as Hong Kong’s Angel Lee, Kayla Uytengsu from the Philippines and China’s Yao.

Yao – who has lived in Britain, Hong Kong and Shanghai – was one of several Chinese debutantes in recent years. Hollywood offspring, such as the daughters of actors Forest Whitaker, Bruce Willis and Sylvester Stallone, have also become Le Bal regulars.

“All the girls were down-to-earth, easygoing, helpful and outgoing. No one was pretentious,” said Yao.

“All of them attended top universities or high schools like Stanford, Brown and Columbia, so it’s a group of girls who are privileged, but also work really hard.”

 

Diverse affair: Today’s ‘Le Bal’ is a microcosm of the shifting tides of the global elite like Yao (far right, front row).

 

As they swapped their jeans for tiaras and couture gowns and trade teenage antics for waltzing, the girls got to play fairytale princesses for three days and make their grand debut in high society.

They all arrived in Paris two days before the ball to meet, socialise with other girls and their cavaliers (Yao’s cavalier was the young Count Gaspard de Limburg-Stirum), rehearse and take part in portrait sessions.

Girls are given questionnaires about the fashion styles they like, and then choose from a selection. Yao donned a champagne gold J Mendel gown.

“An American designer with a very French style I wanted something modern,” she said. “I’m not super girlie inside, so I prefer something more chic and not so princessy It’s very elegant, and I’m not a fan of very [strongly] pigmented hues. I also loved the tulle texture of the dress, as it reminds me of a ballerina.”

“I definitely feel very honoured to be included, as there are only 19 girls in the world this year,” Yao added. “It means I have to work harder, try to accomplish great things in my life and be a role model for other girls.”

She said: “As people who have more privilege than others, it’s more important for us to help those with less opportunity. I want to get involved in philanthropy and charity I still consider myself a normal girl; it’s important for me to work hard and better myself every day.

“My daily life is actually pretty boring compared to this. I usually live like a normal student.”

Computer science is a heavy subject with a high workload, so she studies a lot. Her spare time is often taken up at the Harvard Ballet company (she’s been dancing since childhood). “I try to dance as much as possible,” she said.

A quick glance at the Ivy League student’s social media shows her jetting around the world wearing Dior, Louis Vuitton and Saint Laurent, but she’s quick to show her serious side. This summer, she did an internship at Microsoft “on a team focusing on machine learning and image recognition”.

However, she noted: “As much as I enjoy coding, I enjoy personal interactions a lot I have a passion for fashion, PR and entertainment.”

In the future, she sees herself working on the business side of technology. “I’ll try to integrate the tech knowledge I have,” she said. “I don’t think I’ll be a software engineer but maybe I’ll be more on the management side. I enjoy building connections.” – South China Morning Post

Growing stronger, opening wider key to resolving Huawei crisis

Huawei is now facing its most severe test since it became the world-renowned innovative tech company.

With executive’s arrest, US wants to stifle Huawei

The Chinese government should seriously go behind the US tendency to abuse legal procedures to suppress China’s high-tech enterprises. It should increase interaction with the US and exert pressure when necessary. China has been exercising restraint, but the US cannot act recklessly. US President Donald Trump should rein in the hostile activities of some Americans who may imperil Sino-US relations.

 

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In custody: A profile of Meng is displayed on a computer at a Huawei store in Beijing. The Chinese government, speaking
through its embassy in Canada, strenuously objected to the arrest, and  demanded Meng’s immediate release.  
AP

China-US trade truce set to benefit world


Illustration: Peter C. Espina/GT

Chinese President Xi Jinping and his US counterpart Donald Trump’s meeting in Argentina on Saturday yielded results that boosted the confidence of both countries and the world. The US agreed to hold off on raising tariffs on $200 billion of Chinese goods to 25 percent and the two countries decided to start a new round of negotiations in the next three months. The meeting has prevented bilateral relations from going into a nosedive, showing how rewarding diplomacy between heads of state can be.

The meeting lasted an hour longer than expected, created a cordial atmosphere for talks and ended with a spontaneous group photo. A White House statement released on Saturday said the meeting was “highly successful.”

These details are very indicative. After US Vice President Mike Pence delivered a stinging speech on its China policy at the Hudson Institute in the beginning of October, many worried that a new Cold War between the two countries was looming. But now, the Xi-Trump meeting on the sidelines of the G20 summit has shown that Beijing and Washington have the wisdom and ability to avoid the shadow of the Cold War shroud the world once again.

The compromise between China and the US is a wise decision to deal with their respective domestic challenges. The intensified trade war in the past few months upset farmers, enterprises and financial institutions of both countries. US farmers planted 89.1 million acres of soybeans this year, some were reportedly letting their crops rot as they were unable to sell them to their biggest buyer and the storage costs rose amid the trade conflict with China.

In addition, US companies involved in the international economy are suffering because of a worsening global economic environment. Although the US economy has maintained relatively rapid growth thanks to tax cuts and increased federal expenditure, the economies of Europe, China and Japan have all contracted.

Just as IMF Chief Christine Lagarde recently warned, the headwinds of trade friction, notably between China and the US, “could have slowed momentum even more than we had expected.” She also said that if Trump follows through on this threat to impose steep tariffs on auto imports, it would result in retaliation from trading partners on US exports and could cut a large chunk out of the world economy.

An escalation in trade disputes worldwide will inevitably bring more pressure on both Chinese and American companies. According to a statement by the WTO on November 22, countries belonging to the G20 group of the world’s biggest economies applied 40 new trade restrictive measures between mid-May and mid-October, covering around $481 billion of trade. Trimming its outlook for the global economy, the OECD calculated that a full-blown trade war and the resulting economic uncertainty could knock as much as 0.8 percent off global gross domestic product by 2021.

In this context, the efforts made by China and the US in Argentina to ease trade tensions are valuable to save the global economy. How to take the next step is of course full of challenges. Reaching an agreement on a number of sensitive issues within the next three months will be a big test for both countries.

The Trump government should not overestimate its bargaining chips. It should review the fundamental role healthy and balanced globalization can play in helping the US economy maintain sustainable growth. Trump recently asked General Motors to stop making cars in China and open a new plant in Ohio. As General Motors is highly dependent on the Chinese market, such requirements appear to run counter to common sense and reason.

Besides, the Trump government threatened to impose export controls on new technologies like robotics, hoping to weaken China’s position in the global supply chain and win an upper hand in technological competition with China. Such an approach has been opposed by sane minds in Silicon Valley who argue that it will only benefit companies in Europe and Japan.

China needs to accelerate the implementation of the new round of reform and opening-up policy in the following three months. The Chinese government in the past few months rolled out more policies to support private companies, which is necessary, but more importantly, it should hasten steps to establish a more mature market economy.

If China can reform its own development model based on its own plan under the pressure of a trade spat, it will be the biggest winner and the whole world will also benefit from it.

By Zhao Minghao Source:Global Times

The author is a senior research fellow with The Charhar Institute and an adjunct fellow at the Chongyang Institute for Financial Studies at Renmin University of China. opinion@globaltimes.com.cn

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Salary hike prospects ‘bleak’


THE Malaysian Employers Fund (MEF) announced its findings of four latest publications for 2018. The publications focus on the forecast of salary increases and bonuses for 2019. The outlook was “bleak”, according to the survey due to the global recession, increasing social costs and political uncertainties following GE14 which were among factors influencing the employers’ cautious attitude.

A few incentives were placed into the labour structure of the companies surveyed including productivity linked wage system (PLWS) and the Discrimination Reporting Procedure.

About 90% of companies and more indicated that the main reasons that they implemented PLWS was to reward good employees followed by aiming to improve productivity (which more than 80% responded) and to motivate average employees (more than 70%).

The findings also focused on the types of leaves provided where all participating companies provided annual leave and sick leave for top/senior managers, managers, execu- tives and non-executives.

The average total hours of total working hours per week for top/senior managers and managers were considered where they worked 41 hours compared to the executives where the average total working hours per week was 42 hours. In the case of non-executives the average total working hours was 43 hours.

About 42.5% of respondent companies implemented flexible working hours at the workplace. With implementation of flexible work arrangements 82.4% of the respondent companies indicated that there was increased employees’ engagement, commitment and satisfaction, quality of work and quantity of output (62.7%) and the company’s ability to retain talent (62.7%).

The survey for executives and non-executives were participated by 242 companies from manufacturing and non-manufacturing sectors.

The executive report covered 160 benchmark positions of 14330 executives while the non-executives report covered 324654 non executives with 109 benchmark positions. – The Star

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Are you overpaying your property maintenance fee?


A property, no matter how great-looking it is, is only as good as its management and maintenance. It will look clean and polished when it is new but the good news is, it can still look as good even as it ages.

According to the Strata Management Act 2013 (SMA 2013) which came into effect in June 2015, a strata owner or occupier needs to pay a monthly maintenance fee or service charge to the Joint Management Body (JMB) or Management Corporation (MC) which will be used to manage and maintain the common property of the development.

Other than the maintenance fee, strata owners are also required to contribute to the sinking fund which is normally at the rate of 10% of the total amount of charges.

“A sinking fund is a reserve fund collected from the strata owner for future expenditure which is typically less predictable and cost a lot more than the usual maintenance fee. The sinking fund is usually used for large scale repairs such as a painting job or refurbishment of the interiors of common facilities,” says Chur Associates managing director Chris Tan.

However, some owners may feel that the maintenance fee is too much. But how much is too much? How is the fee amount calculated or set? Is there a formula or a guideline?

Formula to derive the share units

Under the SMA 2013 and Strata Titles Act 1985 (STA), a residential or commercial unit is technically known as a parcel and each parcel has a share value that is expressed in whole numbers under the STA.

“Upon the approval of computation and allocation of share units prepared by the licensed land surveyor, the director of Land and Mines will issue the Certificate of Share Unit. To derive the share units in a strata scheme, there is a standard formula under the Fourth Schedule of the Strata Titles Rules 2015,” explains Burgess Rawson Malaysia managing director Wong Kok Soo.

The standard formula for maintenance fee:

Refer to Table A for an example of how the share unit is derived for an apartment parcel.

What does the maintenance fee cover?

The MC chairman of Sri Penaga, one of Bangsar’s oldest condominiums, Khaw Chay Tee shares with EdgeProp.my that one of the biggest components in the operations expenditure of a residential condominium is security, followed by the property management staffing and cleaning.

“Normally these components make up 50% of your service charge. So at the end of the day, it really boils down to how well-managed that property is. If you are able to manage the property well, then you can keep the cost reasonable. There are some condominiums where the MC likes to carry out projects which incur costs, but that is a separate matter. As each condominium differs in its number of facilities and the density of the development, it is not so easy to compare and ask why this condominium in Bangsar is different from that condominium in Bangsar,” says Khaw.

Knight Frank senior executive director Kuruvilla Abraham concurs that the service charge will vary depending on the service level the JMB or MC requires.

“One can find cheaper options for the various services required which no doubt will result in lower service charges. However, don’t expect good service levels. The right thing to do is to get value-for-money services that commensurate with the expected service levels,” he says.

It also depends on the design of the development, he adds.

“The development with a reasonable number of facilities and a greater number of units will generally pay a lower proportion of service charge compared to one with similar facilities but with lower density.”

Furthermore, developments with more facilities such as fountains, gardens or swimming pools would naturally command a higher fee as more maintenance is needed.

When it comes to maintenance, the level of quality is subjective, reminds Chur Associates’ Tan. Hence, questions often arise on whether what they are paying is actually put to good use.

Kuruvilla points out that he has yet to come across a developer that has charged parcel owners more than what they are supposed to pay. (Photo by Knight Frank)

“What is the definition of “clean” to you? For some, clean means I don’t see any rubbish. For others, it means it has to be squeaky clean and sparkling. We cannot even come up with an industrial standard for door size and window size, how do we even budget the cleaning cost then? If I were the cleaning company, how would I charge you if your windows are bigger than others? Do I charge more? Or can I say the unit price is RM2 per window per cleaning [regardless of size]?” Tan questions.

He adds that the priorities of residents in different projects mean the maintenance fee charged for each development would be different.

“Some residents place a lot of emphasis on security, so they would rather [the JMB or MC] spend more money hiring guards from a prestigious company while there may be some who think that [the JMB or MC] should spend the money to clean the swimming pool daily because they use it often,” he explains.

Wong: To derive the share units in a strata scheme, there is a standard formula under the Fourth Schedule of the Strata Titles Rules 2015. (Photos by Low Yen Yeing/EdgeProp.my)

The problem with a low maintenance fee

The Malaysian Institute of Property and Facility Managers (MIPFM) president Sarkunan Subramaniam tells EdgeProp.my that problems often arise when the property developers set a lower-than-normal maintenance fee in the initial period to induce sales.

“During the first two years, the equipment is still under the defects and liability period, so if say, the swimming pool has an issue, you can just call the technician to come over for free. However, when the JMB or MC takes over when the warranty period has passed, cost will start to be incurred,” says Sarkunan.

Under the STA 2013, developers are not supposed to pass on any deficits or liabilities to the JMB and MC.

Chur Associate’s Tan says problems can also crop up later when a developer designs a very over-the-top facility or development but prices the property at a low selling price, hence attracting the wrong user/buyer profile to the project.

Sarkunan: Problems often arise when the property developers set a lower than normal maintenance fee in the initial period to induce sales.

“If I ask you what you want in your development, you will surely say you want everything. But nobody tells you that in order to have everything, moving forward, the monthly contribution will be higher. When the entry point is low, everybody wants to buy but nobody thinks about the maintenance fee in future.

“On many occasions, it is not about who gives the best facility but who is paying for it. Are you going to use it? How often do you go to your condo’s gym or would you rather go to a gym outside? Why? Maybe because you have your own personal trainer or you don’t want to be seen by your neighbour. So are we overdesigning and overproviding?” Tan questions.

In accordance with the Strata Management Act 2013 (Act 757) (SMA), developers shall hand over the maintenance and management of the strata development (common property) to the JMB not later than 12 months of vacant possession or the MC, should the strata titles be issued and transferred to the purchasers, whichever is earlier.

The items developers are required to hand over include the list of assets, fixtures and fittings, as-built plans, operation manuals as well as the audited accounts of the service charges, deposits and sinking fund as prescribed under the SMA via Form 4 (for JMB) and Form 13 (for MC).

The JMB and MC can then decide by votes or by appointing a registered property management company to suggest an amount for the maintenance fee.

“The owner has the right to request to see the accounts during the Annual General Meeting related to expenditure and raise the matter during the meeting,” says Knight Frank’s Kuruvilla.

However, he points out that he has yet to come across a developer that has charged the parcel owners more than what they are supposed to pay. In fact, the chances are higher that due to non-payment, the management account is likely to be in deficit resulting in there being insufficient funds to carry out proper maintenance and management of the development.

The problem with strata living is, everybody wants to have a well-maintained place to live but not everyone is prepared to pay for it.

“This is why the government passed the Strata Management Act 2013 (and Acts before this) so that after one year post development, it will give the parcel purchasers/proprietors the opportunity to manage the property and thereby giving them an understanding by getting first-hand knowledge in what it takes to maintain and manage a development well. Until one is directly involved, one will not be able to appreciate why service charges have to be paid on time to ensure there is sufficient funds to pay for the maintenance and management of the development.”

This story first appeared in the EdgeProp.my pullout on Nov 30, 2018. You can access back issues here..
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Environmental impact of cryptocurrency


Ten years ago, an anonymous cryptographer laid out the principles of an online currency that would operate beyond
the reach of governments and central banks. — dpa

BITCOIN was supposed to solve the problems of analogue currencies. Instead, it created a new one: an enormous amount of global energy consumption that rivals the power usage of an entire country like Ireland.

According to findings of a new study, the implementation of this cryptocurrency could lead to enough emissions being produced so that global temperatures rise 2°C by 2033.

The study, which was published in the journal Nature Climate Change, found that the hardware and electricity needs of Bitcoin alone could significantly impact climate change for the worse.

“Currently, the emissions from transportation, housing and food are considered the main contributors to ongoing climate change. This research illustrates that Bitcoin should be added to this list,” said Katie Taladay, one of the paper’s co-authors from the University of Hawaii at Manoa.

The technical design of how transactions are processed causes Bitcoin and many of the growing numbers of rival cryptocurrencies to consume an enormous amount of energy in so-called Bitcoin mining centres around the world.

And yet the digital currency Bitcoin is still enjoying hype as one of the greatest financial phenomenons of our time.

The foundation for Bitcoin was laid out 10 years ago when an anonymous cryptographer using the name “Satoshi Nakamoto” published a paper laying out the principles for autonomous digital money.

The ideas it contained were revolutionary: No control by central banks, no national borders.

Instead, a mechanism called blockchain would provide trust and security in the system. In broad strokes, blockchain is a publicly viewable ledger of transactions, each saved one after the other.

But as the cryptocurrency’s wild fluctuations and electricity needs have attracted a lot of media attention, the ramifications of the latter have only recently been brought to light.

In a different article published in May by financial economist and blockchain specialist Alex de Vries, the electricity consumption of Bitcoin was estimated to be around the same as the electricity use of the Republic of Ireland.

De Vries also predicted that Bitcoin could be using as much as half of a percent of the world’s total electricity consumption by the end of this year.

“To me, half a percent is already quite shocking. It’s an extreme difference compared to the regular financial system, and this increasing electricity demand is definitely not going to help us reach our climate goals,” de Vries said.

“With the ever-growing devastation created by hazardous climate conditions, humanity is coming to terms with the fact that climate change is as real and personal as it can be,” said Camilo Mora, associate professor of geography in the College of Social Sciences at UH Manoa, Hawaii.

“Clearly, any further development of cryptocurrencies should critically aim to reduce electricity demand,” Mora, the lead author of the new study warns.

So as Bitcoin celebrates 10 years since its creation and it gains more and more supporters each year, we should probably take a moment and give this energy-sucking technology a re-think. – dpa By AMY WALKER

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Money for favours: millions demanded and paid, bribes from property developers


The court cases involving Datin Seri Rosmah Mansor, her former aide Datuk Rizal Mansor and ex-Cabinet member Datuk Seri Tengku Adnan Tengku Mansor centre upon allegations that millions have been demanded and paid in connection with projects pursued by companies. 

Meanwhile, a property developer is charged with bribing Tengku Adnan and the names of other companies and businessmen have appeared in the charges  – The Star

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Rosmah slapped with graft charges

  • RM1.25bil solar hybrid project scandal!
Datin Seri Rosmah MansorvShe’s accused of soliciting bribes linked with projects to provide electricity to Sarawak

 

Ku Nan charged with receiving RM3mil bribes from developers – Nation

 

Facing the law: Tengku Adnan being led to the Sessions Court in Kuala Lumpur.
Facing the law: Tengku Adnan being led to the Sessions Court in Kuala Lumpur.

//content.jwplatform.com/players/owD4o7xA-dBiC3tzP.html

Property developer Tan is a self-made businessman – Nation

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