Red is the color! (Updated)

If one were to stand by the Karak highway today and observe the flow of the traffic, one would notice something obvious. There would be a lot of cars, and even buses, carrying red flags. He or she could be observing Kelantan supporters heading towards Stadium Bukit Jalil, where the final of the FA Cup will be played between Kelantan or more fondly known as The Red Warriors and Sime Darby Football Club.

As a Kelantanese myself I could understand the passion of these supporters. Others may perceive us as fanatics, not just in soccer but in many other aspects of life. To a certain extend I agree that Kelantanese can be too passionate that their emotions could persevere over their brains, sometimes good, other times otherwise. This could also be reflected in the ways soccer is played on the pitch.

I first experienced tear gas when Kelantan was losing against Perak at the Sultan Muhammad IV stadium in Kota Bharu. This was in the 70's. If I am not mistaken, it was also a FA Cup match. When Perak scored their goal, the spectators were unhappy and invaded the pitch. It was so chaotic that the Federal Reserve Unit had to use tear gas to control the crowd. Yes, tear gas, even those days, could be very stinky and really hurt your eyes. To cut the story short the match was abandoned. When it was pealed again at the same stadium, Kelantan won 4-1.

Kelantanese are also passionate about their politics. It is one of the states in Malaysia where government changes are normal. The people understand about risks and don't mind to venture. Some say Kelantan is a poor state but the people are rich. At least rich as heart, from my humble point of view. The political undertone will be obvious today. The Kelantan team is managed by a group and the other group is running the state at present. The state government has declared tomorrow as a holiday and I am sure the other side will claim the credit if Kelantan wins this evening. At stake would be the hearts and minds of the young Kelantanese supporters who could be voting in the next election.

Beyond party politics, a Kelantan win will also stir the leadership of the Football Association of Malaysia (FAM). Not only FAM may be embarrassed if somebody that they had recently "disciplined" is able to lead a cup winning team, people might start to questioned the status quo in the FAM's leadership. I just can't understand why most of them are still proud to be there when the Malaysian national team remains steadily slotted at the lower end of the world ranking. I suppose many of this kind of questions will surface in the near future.

Back to tonight's match, Kelantan is certainly the favourite. Based on its track record so far, there is no reason why it should not win. However, Kelantan was in the same position last year but they lost 2-1 to Terengganu, their traditional nemesis. Could this happen again?

As a Kelantanese I hope that red will be the color of the evening. However, as mentioned above, should this happen, the vibration could be felt beyond the soccer pitch in Bukit Jalil.

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Updated:

Kelantan won the FA Cup for the first time with a 1-0 victory over Sime Darby, courtesy of a penalty kick. It was not really a match that we expect in a cup final but as most people will say, a win is a win. The pitch was really terrible that it attracted a lot of commentary. 

The competition did not end last night. The next chapter would be the race to reward the winners. I am sure the state government and other parties are now planning to come out with goodies to demonstrate their conviction towards the game and the warfare of the players. The cup will be paraded in the districts of Kelantan and many people will try to score as many political mileage as possible. I hope they would not go overboard to the extent of killing the sporting spirit generated by the whole episode.

English the preferred language for world business

I am sure the debate regarding the usage of english in education will not subside although those who can afford could now send their children to international schools to get them educated in English. In addition to this, these kind of schools focused more on the development of mental capacity and the ability to rationalize and challenge.  The article below is just another point about the importance of English in the context of a more globalized and competitive world.

Happy reading.

(Reuters) - Workers whose jobs require them to interact with people in foreign countries say that English is the dominant language of business, according to a new poll.

By Chris Michaud

NEW YORK | Wed May 16, 2012 10:02am EDT

More than one quarter of employees in 26 countries around the world told an Ipsos poll that their jobs involve dealing with people in other countries. And of those, two-thirds said that English is the language they use most often.

Workers in India, Singapore and Saudi Arabia were the most likely to say their jobs involved interacting with people in other countries, with 59 percent, 55 percent and 50 percent saying so, respectively.

But only nine percent in Japan and 13 percent in Russia said their work required communication outside the country.

"The most revealing aspect of this survey is how English has emerged as the default language for business around the world," said Darrell Bricker, CEO of Ipsos Global Public Affairs which conducted the poll for Reuters.

The survey of 16,344 employed adults in 26 countries showed that 67 percent, or just over two-thirds, of workers who deal with people beyond their borders said English was the language used most often, with Spanish a very distant second at five percent.

Nearly as many, 61 percent, said the language used for such interactions was different from their native one.

Bricker said the findings suggest "that all those in the English-speaking world who suggested that our children should learn Mandarin or Japanese to have successful careers were beaten to the punch by the Chinese, in particular, learning English first."

While more than three quarters of people in North America said they used English most often to communicate with those in other countries, 63 percent in China said the same thing. The same was true for France.

More than two thirds of workers in the Asia-Pacific region, the Middle East and Africa also defaulted to English.

In Latin America only one-third said English was most common when dealing with people in other countries. In Argentina and Mexico the choice was Spanish, in Brazil, Portuguese.

The survey showed that people with higher levels of income or education were among the most likely to say English was most commonly used for foreign business relationships.

Gender and age had no bearing on the dominant language for conducting business.

Countries surveyed included Indonesia, Turkey, the United States, Sweden, Great Britain, Spain, Canada and Italy among others.

It’s time to study the likely impact of listed companies issuing audited accounts sooner

OPTIMISTICALLY CAUTIOUS
By ERROL OH
errol@thestar.com.my

WHAT if the fourth-quarter results of listed companies are in fact the audited full-year financial statements, as opposed to the practice now of releasing unaudited figures first? Is that entirely a good thing or should we be concerned that there may be drawbacks to such a change?

What's for certain is that we ought to start thinking about this possibility, because it appears that the regulators are already soliciting feedback on a proposal to require listed companies to issue their annual audited accounts sooner than within four months after the financial year-end, as currently stipulated by Bursa Malaysia's listing requirements.

The Securities Commission (SC) signalled the likelihood of bringing forward this deadline when it published the Corporate Governance Blueprint 2011 last July.

Arguing that there was a need to consider reducing the timeframe for dissemination of certain information to shareholders, the SC said: “Currently, the time frame for the submission of quarterly and annual reports is two months and six months respectively. To ensure investors receive critical information in a timely manner, there is a need to consider the possibility of shortening the submission period for these reports.”

The Blueprint recommended the formation of a task force of industry representatives and regulators to review the framework for periodic disclosure of financial and non-financial information, including the shortening of the submission period for quarterly and annual reports.

Nothing more was heard about this until February, when the World Bankcame out with a report on the observance of standards and codes in the accounting and auditing environment in Malaysia.

According to the report, Bursa wants to move the deadline for submitting audited financial statements from four months after the end of the financial year to two months. The World Bank adds that the stock exchange is conducting a consultation process with other stakeholders.

In addition, it is understood that the task force mentioned in the Blueprintwill soon be set up.

At present, listed companies are given two months to announce their unaudited results for the fourth quarter. This means there's as big as a two-month gap between the release of the unaudited numbers and that of the audited financial statements.

This has led to situations in which investors have bought or sold securities based on the fourth-quarter results of the companies, only to find out several weeks later that the audited financial statements were significantly different.

A decision to halve the timeframe for the submission of audited accounts will eliminate this because the listed companies will no longer make public their unaudited full-year figures.

Being able to go through a listed company's audited annual accounts two months earlier than before is certainly a good thing for the investing community. But such a change doesn't happen without other consequences, including unintended ones.

The World Bank report points out that one potential problem lies within Section 174 of the Companies Act 1965. If strictly interpreted, that section demands that the auditors of a holding company (which is what every listed company is) review the audit opinion for each of the holding company's subsidiaries before issuing an audit opinion on the consolidated financial statements.

As such, the bank says a move to bring forward the deadline for the submission of audited accounts is a challenge for listed companies with many subsidiaries. It suggests that Section 174 be amended or clarified, and adds that the Audit Oversight Board is leading a discussion with stakeholders to clarify this legislative requirement.

However, there's also the worry that audit firms may have to make tough choices in meeting the tighter deadlines. To ensure that their workload is manageable and thus the quality of the audits is maintained, firms may be compelled to jettison some listed companies from their client lists.

The question then is, who would step in to be the new auditors of these listed companies? What if the new auditors are smaller outfits with limited resources and yet they have no qualms about taking on more jobs? What if these audit firms are willing to charge lower fees to secure these clients?

If not studied carefully and implemented wisely, a move to ask listed companies to be quicker in issuing their audited accounts may backfire. There is indeed a huge difference between haste and timeliness.

Executive editor Errol Oh wonders why a handful of listed companies are always among the first to announce their quarterly results, while so many of the rest just barely meet the deadlines.

How Much is Your Price?

RM 100? RM 200? RM 500? RM 15,000? Not for sale? Well, I just cooked these numbers. Unfortunately, the common believe now is that everybody has a price. It is the price for doing something against what he or she believes in, if the person has any principle in the first place. In the absence of any values, anything goes I suppose.

If we are honest and sincere enough in observing people's behaviour, we could see these sort of trading happening everyday in many forms. Trying to encourage our children to do something? Offer him or her cakes or chocolates. As they grow older, the value of the incentive get larger. I'm not saying that we should not reward our kids for behaving in the way we want but there could be a line somewhere where this sort of practice may not be sending the right signal to them.

As they grow older and have more key decisions to make in their lives, they may need more incentives to behave "appropriately". Sometimes I just wonder what is the different between this practice from offering our cats and dogs food for doing things that we want them to do?

People have many needs and wants in their lives. In the words of Gordon Gekko, a character in the movie the Wall Street "Greed is good". In fact, it is greed that get the Wall Streets of the world going. The lessons from the recent global economic crisis is pretty obvious about how people will go all the way to make money even by selling bad debts with fancy names. In the movie, greed resulted in Gekko to be sent to prison. In the real world, this may not necessarily be the case all the time. In contrast, those committing evil could be cheered by the society and their hands got kissed instead.

Some people could be poor enough that they are willing to sell anything including their mothers, just to live. While there are people who will do this without blinking, there are others who will try to camouflage this by calling these sort of behavior with more respectful names. We see this being done around the world. Instead of admitting that they are corrupt, abuser of power and outright crooks, they create images of being benevolent after illegally obtaining the wealth at an insulting proportion. Some may even feel they are Robin Hoods!

While we could not prevent other from selling their souls to the devil, we could control ourselves. We have to be honest enough to accept that there are rights and wrongs. There is a line somewhere where right become wrong. It does not matter how we sweat talk ourselves, getting kickback for the favour we give is corruption. Further, corruption is evil irrespective of the reasons behind the despicable conduct. We cannot use a good cause to justify corruption and abuse of power. Don't sell ourselves to the devil, at whatever price.

Federal Court makes final decision in the SC's favour

Kuala Lumpur, 8 May 2012

Federal Court makes final decision in the SC's favour
Ramesh Chelliah ordered to pay costs of RM10,000

The Federal Court today dismissed Ramesh Chelliah's application for leave to challenge the Court of Appeal's decision on the Audit Oversight Board (AOB)'s registration of PricewaterhouseCoopers (PwC) on 1 April 2010 under the Securities Commission Act 1993. He was also ordered to pay costs of RM10,000 to the Securities Commission Malaysia (SC). The decision of the Federal Court today concludes the case.

In May 2011, the High Court had dismissed an application by Ramesh for leave to commence judicial review proceedings against the AOB's decision to register PwC. The High Court agreed with the SC that there were flaws in the application and that the applicant did not have the locus standi to commence judicial review proceedings. The High Court also ordered the applicant to pay costs to the SC.

The Court of Appeal, on 6 October 2011, upheld the High Court's decision and ruled in favour of the SC. Ramesh subsequently appealed.

Today's Federal Court's dismissal of the appeal application officially concludes the case.

The Federal Court panel was made up of Tan Sri Md Raus bin Sharif, Tan Sri Abdul Hamid bin Embong, Dato' Hasan bin Lah, Datin Paduka Zaleha bt Zahari and Datuk Seri Paglima Sulong bin Matjeraie.

The AOB was established in 2010, under the Securities Commission Act 1993, to protect investor interests and promote confidence in the quality and reliability of audited financial statements of public interest entities (PIEs) and licensed institutions.

SECURITIES COMMISSION MALAYSIA

Boiling the Frog

I am sure we have heard about the moral behind the story anecdote of boiling the frog. It goes by arguing that if we throw a frog into a boiling water it will jump out of the water but if we place a frog in a nice cold water and heat it up slowly, the frog will enjoy the warming water and will fall asleep and realises the danger when it is already cooked.

Whether or not it is really an anecdote or just a fiction, there is something to learn from it. The lesson is simply that we will eventually suffer from a gradual change if we choose to ignore it's consequences. Worse if we were not able to detect the change due to our ignorant attitude.

In a fast changing world, change is inevitable. In fact many people has argued that the only constant is change itself. Change could happen in many dimensions, not just in technological terms as what many of us are familiar with. It could happen in our social structure, business practices and many more aspects which affect our lives.

If we look at what the Americans and Europeans are experiencing now, they have themselves to be blamed. These developed economies have been living beyond their means for far too long, perhaps believing that their successes in the past could be repeated in the future without much efforts. I don't have problem with them if they want to sustain their standards of living. The challenge is that somebody has to pay for it and if there is no other party that is doing that, they have to be the payers. Without real productivity, they will be eating out the capital that they had built over the years. Given the growth in other markets with lower production cost such as China, Brazil and Russia, the centre of global growth is slowly but surely shifting from the economies which used to lead the world. Interestingly, the demand of goods produced by the emerging economies were created by the hunger of the developed economies, financed primarily through debts.

What could we learn from the Americans and Europeans? Well, to me we should not be living based on whatever little success that we had in the past. We need to pay for the kind of life that we want. If we are lazy, eventually, time will catch up with us. There is no such thing as guaranteed rights or privileges. We can't blame others for our own weaknesses. We need to accept that change will continue to happen and we have to positively respond to it. Otherwise, we could end up being cooked like the frog.

Unfortunately, some changes require the mass to change. This is where in most cases involving societies, change would never be easy. By nature, most of us are selfish, we think about ourselves more than our concern towards others or the society at large. Unless or until something come knocking our heads, not many would be willing to move from our comfort zone and do something different. We could even feel that those advocating for change are traitors if  we are the benefactors from the status quo, despite knowing that our lifestyles may not be sustainable without significant change. 

Whether or not change is required, in what ever aspects of our lives, depends on the facts before us. We could accept or ignore those facts. However, such ignorance could cost us dearly, the only question is when. It could come later and our children or their children would eventually foot the bill. However, I am not surprised if many of us could not be bothered as that would not be their problem, they could already be 6 feet underground by that time. It is going to be the problem of their children and grandchildren! What's the problem?