Singapore Marina Bay Sands seeks to hire those who underwent retraining under SPUR

Singapore Marina Bay Sands seeks to hire those who underwent retraining under SPUR

By Pearl Forss

SINGAPORE: Marina Bay Sands is ramping up its hiring of retrenched professionals who have undergone retraining under the Professional Conversion Programme.

This comes after the Skills Programme for Upgrading and Resilience (SPUR) was expanded in this year’s Budget to give professionals more subsidies to undergo training and take up jobs in a different industry.

When it was first announced that the Marina Bay Sands Integrated Resort will open its doors at the end of this year, many in the industry were worried about labour shortage.

But with the current recession, it appears this may no longer be the case.

Sands has been busy interviewing 8,000 rank-and-file workers retrained by the National Trades Union Congress (NTUC) recently.

It’s now working with the labour movement’s training arm to fill 2,000 supervisory and management positions in the integrated resort.

Sands said it will consider hiring retrained professionals for these positions.

Ang Hin Kee, CEO, Employment & Emplyability Institute, E2i, said: “They’ve agreed to work together to see how we can take advantage of this budget which will provide more resources. Let’s take advantage of the fact that there are more talents who may be interested in entering the IR industry, and that is win-win for both.

“Someone with prior experience in another industry who is familiar with dealing and managing a group of people, working shifts can actually move across and take up these positions. This alleviates the manpower crunch from the hospitality trade because if everybody starts to take from the same pool, that pool will dry up soon.”

Training institutes including polytechnics and universities are currently designing professional conversion programmes for those interested in joining the tourism sector.

90 per cent of the course fees will be subsidised by the government.

More details on these programmes will be released in February. -CNA/vm

Source : Channel NewsAsia - 29 Jan 2009

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Jobs Credit scheme may help lessen impact of job cuts

Jobs Credit scheme may help lessen impact of job cuts

By Hoe Yeen Nie,

SINGAPORE: Singaporeans are unlikely to be spared from the wave of global job losses. But Acting Manpower Minister Gan Kim Yong hopes the tripartite relationship in Singapore can help lessen its impact on workers here.

Job cuts in Singapore were unavoidable when consumer electronics giant Philips announced global manpower cuts last month, and Mr Gan said retrenchments are set to worsen.

“They’ll be MNCs in Singapore which will have to take into account decisions by their headquarters. But that is where our tripartite relations are very important.

“Many of these MNCs work very closely with the unions and we want to convince them that the tripartite relationship in Singapore is very different from what they have back home,” he said.

The acting manpower minister said the new Jobs Credit scheme, unveiled last week by Finance Minister Tharman Shanmugaratnam, will help local management persuade their head offices to reconsider any job cuts.

The Jobs Credit scheme is designed to help employers with their cash flow, while providing an incentive to retain workers.

But the question remains on how much of these benefits would, or should, be passed down to the employee? Mr Gan said it all depends on the individual company – for instance, companies that can afford it could offer moderate wage increases or a one-off bonus.

He also explained the decision to pay out the wage rebate quarterly.

“If we offer a monthly Jobs Credit, there is a risk that the company may retrench the worker (after) a month… whereas if you pay out on a quarterly basis, it means the company has to keep the worker for at least a quarter,” Mr Gan said.

He was speaking on Wednesday after recording “Budget Forum 2009″ which will be shown on Thursday January 29, at 10.30pm on MediaCorp’s Channel 8.

- CNA/so

Source : Channel NewsAsia - 29 Jan 2009

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Koh Brothers awarded contract to build part of Punggol Waterway

Koh Brothers awarded contract to build part of Punggol Waterway

SINGAPORE: Construction firm Koh Brothers has won a contract to build the first part of the Punggol Waterway in Punggol Town.

The contract, which is awarded by the Housing and Development Board (HDB), is worth S$144.6 million.

Under the deal, Koh Brothers will build a 2.4-kilometre waterway and its related engineering works in Punggol Town.

The waterway, which will have a promenade on both banks, will be connected to Sungei Punggol.

The Punggol Waterway is part of a larger project by HDB towards making Punggol a vibrant people-centred township.

With the latest deal, Koh Brothers said it would have total contracts-in-hand of over S$690 million.

Work on the project will start next month and is expected to be completed by fourth quarter 2010.

Koh Brothers expects the contact to have a positive material impact on its financial performance for the year ending December 31, 2009.

- CNA/so

Source : Channel NewsAsia - 29 Jan 2009

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A bigger Budget deficit next year?

A bigger Budget deficit next year?

Govt will see lower tax revenue but will spend more to bolster economy

By Fiona Chan

AFTER turning in an eye-popping $15 billion basic Budget deficit this year, the Government may have to run an even bigger shortfall next year.
Revenue looks certain to fall amid less tax being collected, yet ministries will be ramping up their spending to help bolster the economy.

And if the recession turns out to be even longer and deeper than forecast, 2011 might see a fourth deficit in a row, economists said.

This means that the Government may have to rely heavily on the returns it gets from investing Singapore’s reserves in order to keep its books more balanced over the next few years.

These returns are known as net investment returns, or NIR. They comprise 50 per cent of the interest, dividends and expected long-term real returns on the reserves.

NIR is added to the Government’s basic surplus or deficit - calculated as its operating revenue minus total expenditure and special transfers - before arriving at the overall Budget position.

NIR contributions are projected to come in at $7.7 billion this year, helping to halve the basic deficit of $15 billion.

After allowing for all the special transfers, the overall deficit will be $8.7 billion - still a record amount of red ink for Singapore.

Part of this year’s shortfall is due to assistance programmes, such as the new Jobs Credit Scheme and Special Risk-sharing Initiative, as well as goods and services tax (GST) credits, Workfare payouts, and rebates for lower-income households.

Spending on development projects will also climb by almost 20 per cent to $11.5 billion this year, which includes a portion of the $18 to $20 billion in construction projects to be awarded.

Major infrastructure works to be undertaken include the Downtown and Circle Lines, the Jurong Rock Cavern and Tuas View Extension.

Revenue will also drop this year. Estate duty was abolished last year, dragging down asset taxes, while the soft property market is depressing stamp duty collections, and falling business earnings will reduce corporate income tax revenue.

The Government’s 2009 financial year runs from April 1 to March 31 next year.

As for next year, tax receipts will likely fall further, while operational and development expenditure will be scaled up ‘quite exponentially’ as many of the projects brought forward involve multi-year spending, said OCBC economist Selena Ling.

Corporate taxes will slide: the downturn will hit company profits and the corporate tax rate itself was cut by 1 percentage point in last week’s Budget.

Collections of personal income tax are also likely to fall, as retrenchments gather steam and workers earn less pay and smaller bonuses.

Stamp duty will probably take another hit, given the subdued property market. And property taxes, already down about 21 per cent this year, are almost certain to fall next year due to the 40 per cent property tax rebate.

‘It’s quite likely that next year, the primary deficit will be higher than this year,’ said Ms Ling.

But she added that ‘there are some mitigating factors’. The Government has resisted cutting GST, which is expected to be the second largest component of revenue this year.

With the Government now able to tap on more of the returns from the reserves - thanks to a change to the Constitution last year - the NIR component can also have a bigger offsetting impact on the overall deficit position, economists said.

Citigroup economist Kit Wei Zheng believes that the overall deficit next year - including NIR and special transfers - could come in slightly smaller than this year’s, even if the basic deficit is bigger.

‘There could be off-Budget measures later this year that would widen this year’s overall deficit,’ he said. ‘Barring a scenario where the recession is protracted well into 2010, aggressive fiscal stimulus of the same magnitude as this year’s may not be as likely next year, so the overall deficit will probably not be as big.’

Much still depends on whether a recovery will come soon, and how strong it will be. ‘Once the economy starts to turn, the Government will probably hold back on spending,’ said Mr Kit.

‘If, for instance, the Jobs Credit Scheme expires next year, a significant chunk of the expenditures in the form of special transfers will disappear.’

Source : Straits Times - 29 Jan 2009

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Tougher rules cut queue for new Singapore HDB flats

Tougher rules cut queue for new Singapore HDB flats

By Jessica Cheam

THE queue of buyers for new Housing Board flats has become shorter and it is moving faster too.
Serious house-buyers are getting the flats they want sooner because a group of ‘frivolous’ buyers, who used to clog up the queue and waste everyone’s time by rejecting flats offered to them, appear to have dropped out.

The change has followed new HDB rules introduced last May to deter time-wasters from applying for flats they are not really keen to buy.

The HDB says that since the change, the number of applications has dropped. It now gets two to three times the number of applications than flats available; previously, the number received could be 5.6 times the number of flats.

Fewer are also turning down the flats offered to them. The rejection rate used to be between 22 and 77 per cent; now it is between 14 and 50 per cent.

The changed behaviour of applicants is seen as a vindication of the HDB’s ‘two strikes and you’re out’ approach to discourage frivolous applications. People appear to be more selective when applying and more likely to say yes when offered a flat.

The rule change meant that a first-time buyer who rejects an offer to buy a flat twice or more in any HDB sales exercise, loses his first-timer priority for a year. That effectively moves him to the back of the queue with second-timers.

Mr Mark Zhou, 26, a first-time home buyer working in the financial industry, said the change made him think twice before applying. ‘I think the new rules have changed the behaviour of home buyers for the better,’ he said. ‘It makes getting a flat more efficient, and people give it more serious thought before applying.’

Chesterton Suntec International head of research and consultancy Colin Tan said the change has likely ’shortened the whole booking process’.

Property agency ERA Asia-Pacific’s associate director Eugene Lim said latest data has proved that the new rules do work. ‘Demand has stabilised due to the tweaking of rules, and also due to market sentiment. First-timers are shown to be taking their applications seriously,’ he said.

The changes have also reduced the HDB’s administrative load considerably.

Previously, a new HDB project would see many more applicants than units, but the high rejection rate would see many flats still available for sale in the end.

After the rule change, projects such as Compassvale Pearl in Sengkang last May saw no units left over.

The tougher HDB regime was put in place to allay growing concern that the thousands of applications for HDB’s build-to-order (BTO) projects bore little relation to the actual take-up rate.

Demand for new flats picked up at the end of 2007 and shot up last year after young couples priced out of the resale market swamped the HDB with applications for new homes.

Such homes are only built when a set demand level is reached, take up to three years to complete, and are typically cheaper than flats in the resale market.

Source : Straits Times - 29 Jan 2009

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Koh Brothers wins $145m Singapore HDB contract

Koh Brothers wins $145m Singapore HDB contract

By UMA SHANKARI

(SINGAPORE) The Housing and Development Board (HDB) said yesterday that it has awarded a $144.6 million contract to build the first part of Punggol Waterway to Koh Brothers. The win brings the value of contracts Koh Brothers has on hand to over $690 million.

Waterfront town: An artist’s impression of the new Punggol development. Construction of the first part of Punggol Waterway - a 2.4km stretch of a total 4.2km waterway connected to Sungei Punggol - is set to start next month and will be completed by the fourth quarter of 2010.
Construction of the waterway is scheduled to start next month and will be completed by the fourth quarter of 2010. The waterway is part of the government’s plan to make Punggol a ‘waterfront town’.

Koh Brothers expects the contract win to have a material impact on its financial performance for the year ending Dec 31, 2009. Chief executive Francis Koh said he is confident the company’s track record and ability to innovate will serve it well as it continues to tender for higher-value projects.

The contract, awarded to Koh Brothers’ fully-owned subsidiary Koh Brothers Building & Civil Engineering Contractor, includes construction of the 2.4km waterway and related engineering works in Punggol Town. This 2.4km stretch is the first part of a planned 4.2km waterway connected to Sungei Punggol.

‘Residents can look forward to enjoying various recreational activities ranging from water sports to a leisurely walk along a landscaped promenade on both banks of the waterway,’ HDB said.

HDB launched more than 4,000 flats in Punggol last year. The agency also plans to launch the first site at Punggol’s town centre for a mixed commercial and private residential development by 2010/2011.

By end-2011, there will be about 23,000 completed flats in Punggol. In the longer term, another 21,000 public and private homes will be built along the waterway, HDB said.

Koh Brothers shares closed unchanged at 13 cents last Friday, the last day the stock was traded.

Source : Business Times - 29 Jan 2009

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Rush for Singapore URA approvals before window closed

Rush for Singapore URA approvals before window closed

Developers sought provisional nod in Q4 2008 just prior to new rule on GFA

By KALPANA RASHIWALA

(SINGAPORE) All’s quiet on the property front but developers secured a raft of approvals (provisional permission) for private residential projects from the Urban Redevelopment Authority in the last quarter of 2008.

The key reason for this is that developers rushed to make their submissions for provisional permission (PP) before a new ruling that scraps the exemption of bay windows and planter boxes from gross floor area (GFA) took effect on Jan 1, noted Credo Real Estate MD Karamjit Singh.

He said: ‘With effect from Jan 1, 2009, for any submission for PP, URA will consider bay windows and planter boxes as part of GFA, and that brings down the total saleable area in a project by about 5-12 per cent. So developers were making submissions to secure PP before the change in ruling kicked in - even if they didn’t intend to develop or launch their projects in the near future, given the current downturn.’

Agreeing, DTZ executive director Ong Choon Fah said: ‘Bay windows and planter boxes are an important contributor to developers’ profit margins. In the past when they bought land, they would have assumed these would be exempt from GFA.’

Hong Realty (part of the Hong Leong Group) received PP in Q4 2008 for a 1,517-unit condo project at Pasir Ris Drive 8, while Far East Organization unit Arts Associate Co secured URA’s approval for a 234-unit condo at Jalan Datoh/Jalan Dusun in the Balestier area. And Bukit Sembawang bagged PP for a 200-unit condo at St Thomas Walk.

Horizon Partners Pte Ltd - whose shareholders are Hotel Properties, Morgan Stanley Real Estate and Qatar Investment Authority - picked up URA’s consent to develop a 253-unit condo and eight detached houses on the Horizon Towers site at Leonie Hill Road.

URA also granted PP between October and December to NTUC Choice Homes unit Choice Homes Gamma for a 571-unit condo at Lor 2/3 Toa Payoh; to TID Pte Ltd for a 282-unit condo at New Upper Changi Road/ Tanah Merah Kechil Ave; and to an MCL Land unit for a 520-unit condo at Yishun Ave 1/2 fronting Lower Seletar Reservoir. The three proposed developments are on 99-year leasehold sites sold through the Government Land Sales Programme last year.

Casuarina Properties, controlled by the Lee Foundation and members of the Lee family, received URA’s permission for a cluster housing development at Mount Rosie comprising 191 terrace homes and two semi-detached units.

The proposed Pasir Ris condo project by Hong Realty is on a massive 2.1 million square feet plot that Hong Leong Group owns in Pasir Ris - which the 1,822-unit Livia condo launched last year is part of. City Developments has a 51 per cent stake in the site. Sources say the site was bought for just $10 million decades ago, was originally treated as land for rural or agricultural use and had restrictions on its title.

In the commercial property segment, Hotel 81-linked Citywide Land secured PP to develop a 902-room hotel at Kallang Road in Q4. The project will also have about 4,090 sq ft gross floor area of shop space.

At Jalan Besar/Laven- der Street, Prominent Plaza Investments/Prominent Site Pte Ltd secured URA’s consent to develop about 133,800 sq ft of offices and 13,500 sq ft of shop space. Over at Changi Business Park Ave 1, United Engineers Developments picked up URA’s consent for a project comprising a 301-room hotel and 59,740 sq ft of shop space.

URA also approved several industrial property projects in Q4. Keppel Shipyard received PP for additions and alterations to its existing factory at Pioneer Sector 1, as did Yamazaki Mazak Singapore for its existing plant at Joo Koon Circle.

URA also granted PP for factory developments to General Magnetics (at Lorong 4 Toa Payoh), Index-Cool Furniture Design & Construction’s (Eunos Avenue 3) and Oxley Opportunity #9 Pte Ltd (Pioneer Crescent).

Source : Business Times - 29 Jan 2009

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Making S’pore a more exciting place to visit

Making S’pore a more exciting place to visit

By ROBIN HICKS

THE Singapore Tourism Board (STB) is looking to breathe new life into its Uniquely Singapore campaign amid dwindling visitor numbers, sparking debate on whether the campaign needs a complete overhaul.

‘Uniquely Singapore is a powerful brand idea but it has been poorly executed. It fails to capture the heart and soul of the city. Besides, few of the executions portray Singapore as unique, and too many people still think of it as the place where you can’t chew gum.’

- Dan Paris,
managing director of TBWA Singapore

STB issued a tender for marketing activities recently, which will bring the Uniquely Singapore campaign and the disbursal of its $30 million advertising budget under scrutiny.

Marketing consultancy R3, which handled the $100 million Singapore Airlines pitch last year, has been brought in to gauge the performance of STB’s marketing agencies and hear presentations from others vying for the prestigious account.

The advertising account is being defended by Young & Rubicam (Y&R) and media agency Starcom Media Worldwide, whose contracts expire on March 31. Singapore Computer Systems is STB’s current Web vendor.

Competing agencies have been tasked with identifying solutions to stem falling tourist numbers, which shrank 9.7 per cent year- on-year last November after contracting 8 per cent in October.

The first campaign to result from the STB tender is expected to launch around the same time as the opening of Resorts World on Sentosa next year. But first, agencies must get through to the second round of the review, which depends on their ability to answer STB’s initial brief and credentials requirements.

Agencies with complementary expertise are expected to group together in ‘pitching clubs’ to give shops of all sizes and disciplines a chance of winning.

According to the tender document, STB wants to ‘enhance Singapore’s position as a compelling, exciting and must-visit destination’.

Marketing ideas will focus on boosting tourist numbers and receipts from high-growth visitor-generating countries such as Indonesia, China, Australia, India and Japan. STB also wants to widen its focus beyond mainstream tourism to include segments such as business, medical and education.

Industry watchers say a weakness of the STB marketing operation has been a preoccupation with mainstream tourists and an overuse of traditional media, particularly TV, to reach them. The global review will cover media strategy and buying, advertising and digital marketing - a discipline observers say could be better utilised by targeting influential travel bloggers and websites.

Still, STB’s communications director Rostam Umar has said the decline is a reflection of ‘the challenging global economic environment and outlook for the tourism sector’ as opposed to the campaign.

Mr Umar points out that before last June, Singapore had enjoyed year-on-year visitor increases every month since 2004, when the Uniquely Singapore campaign was introduced. However, questions have been raised as to why Singapore’s tourism decline began before that of its Southeast Asian neighbours.

In June 2008, tourism numbers in Malaysia, Indonesia, the Philippines and Thailand were still growing healthily year-on-year, according to the World Tourism Organisation. Even as the global economic slowdown began, Malaysia and Thailand - Southeast Asia’s most popular tourist destinations - reported year-to- date tourism growth while Singapore saw a net fall despite high-profile events such as the Formula One night race.

Singapore’s reputation as an expensive place to visit, coupled with rising hotel rates in recent years, has been blamed for its early exclusion from holidaymakers’ travel plans even as a stopover destination.

Dan Paris, managing director of TBWA Singapore (which creates advertising for Singapore Airlines and Resorts World), said it is unfair to blame the Uniquely Singapore campaign for the slump and does not suggest the platform should be replaced altogether. However, he reckons it needs refreshing.

‘Uniquely Singapore is a powerful brand idea but it has been poorly executed,’ he said. ‘It fails to capture the heart and soul of the city - the Singapore brand has been undersold to the world. Besides, few of the executions portray Singapore as unique, and too many people still think of it as the place where you can’t chew gum.’

David Tang, president and CEO of DDB Singapore, which handles the StarHub and Health Promotion Board accounts, says STB’s advertising is ‘waiting for a definite idea and a deliberate strategy’, but also argues that Uniquely Singapore should stay.

‘We should build on it and go all out for the high-net- worth market, both the holidaymakers and business chaps,’ he said. ‘We have been winning on quality visitors, as we offer quality treats and infrastructure. Bangkok can have the backpackers; we want the high rollers.’

STB has said that it will not cut its marketing budget in the short term, which is being spent on initiatives such as the Uniquely Singapore Weekends campaign to attract short-haul regional travellers.

Meanwhile, Tourism Malaysia has said it will try to remedy its own slowdown in visitor growth through ‘aggressive promotion’ to meet its target of 20 million visitors in 2009. The country will target the MICE (meetings, incentives, conventions and exhibitions) sector as it attempts to position Malaysia as a business hub.

It will also revamp its ‘Malaysia My Second Home’ campaign by addressing complaints it has received from tourists, and will promote Malaysia as a health and eco-tourism hotspot.

In troubled Thailand, the tourism authority has announced a US$625 million rescue package for the ailing sector, which is feeling the effects of the country’s political uncertainty. The rescue effort will involve a PR offensive to improve the kingdom’s image abroad.

Increased efforts to lure tourists are also planned by Indonesia, the Philippines, Vietnam and India, which expects a sharp downturn in tourism numbers in the wake of the terror attacks in Mumbai.

Source : Business Times - 29 Jan 2009

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Geithner sets limits on lobbying for US$700b bailout funds

Geithner sets limits on lobbying for US$700b bailout funds

Aim is to prevent political interference in decisions on which banks get assistance

(WASHINGTON) New Treasury Secretary Timothy Geithner announced on Tuesday that he would crack down on lobbying to influence the US$700 billion financial bailout programme by companies that are receiving billions in taxpayer money.

Mr Geithner: Said the bailout needed serious reform and pledged tough conditions to protect taxpayers
Mr Geithner, who was confirmed on Monday, also said he would set new limits intended to prevent political interference with decisions about which companies received bailout money.

Among other steps, the Treasury Department said it would make public a log of all contacts by public officials and bank officials regarding specific financial institutions. The log will be posted on the department’s website and updated weekly, it said.

The announcement followed several recent news reports about attempts by corporate lobbyists and members of Congress to influence the bailout programme, including decisions about which banks should receive taxpayer funds.

‘American taxpayers deserve to know that their money is spent in the most effective way to stabilise the financial system,’ Mr Geithner said in a statement. ‘Today’s actions reaffirm our commitment towards that goal.’

The details of the new rules, whose text has not been completed, were not released. But in a news release, the Treasury Department outlined the Obama administration’s intent to restrict corporate and political lobbying to influence the bailout programme.

Among the changes will be rules to ‘combat lobbyist influence’ over the bailout programme, including by ‘restricting contacts with lobbyists in connection with applications for, or disbursements of’ bailout funds, the department said.

A Treasury spokeswoman said the department’s lawyers were developing rules to adopt such a restriction to the extent allowed by law, and would make the procedures public. The changes will not require legislation by Congress or regulations, she said.

Eugene Volokh, a constitutional law professor at the University of California, Los Angeles, said there was no legal impediment to barring Treasury officials from talking about specific matters with lobbyists, although the First Amendment would not permit the government to forbid people from trying to lobby it.

The New York Times reported last Saturday that at least a dozen companies that received taxpayer funds from the bailout programme lobbied the government about the programme in the final months of 2008, according to their lobbying disclosure forms.

The new rules will also ‘ensure that political influence does not interfere’ with bailout ‘decision making, using as a model for these protections the limits on political influence over tax matters’, the Treasury said.

The tax investigation safeguards include rules to keep executive branch officials, including those at the White House, from ordering the Internal Revenue Service (IRS) to conduct or terminate an audit of a particular taxpayer. If copied for the bailout programme, the rule would prevent such officials from intervening in particular decisions about which banks get which funds.

The Treasury spokeswoman also said the department would disclose communications with members of Congress, along with bank executives, as part of its plan to make public all contacts about the bailout programme.

The Wall Street Journal reported last Wednesday that several members of Congress, including lawmakers from Ohio and Alabama, had tried to ensure that regulators would steer bailout funds to banks in their states.

The article focused in particular on efforts by the chairman of the House Financial Services Committee, Barney Frank of Massachusetts, to help a troubled minority-owned bank in Boston. It later received US$12 million in bailout money.

In a phone interview, Mr Frank said he had no problem with Treasury posting a log of communications with members of Congress. He said he had been very public about his support for the Boston bank, and said lawmakers wanted their constituents to know of such efforts.

The Treasury Department said letters and calls from Congress played no role in its decisions about which banks received money.

Mr Geithner also declared that the Office of Financial Stability at Treasury, in making reports to Congress about how it was disbursing the bailout funds, would certify that each decision was based only on ‘investment criteria and the facts of the case’. The department said it would soon publish a detailed description of its investment review process.

And it said that only banks recommended by their primary bank regulator would be eligible for bailout funds.

The announcement on Tuesday represented the latest step by the Obama administration to make the bailout programme more open and accountable as it moved to disburse the second US$350 billion, following criticism of the Bush administration’s handling of the first US$350 billion of the programme.

Another set of rules on lobbyists imposed by President Barack Obama would affect Mr Geithner’s chief of staff, Mark Patterson, who lobbied for Goldman Sachs as recently as last April. Under the new rules, Mr Patterson cannot be involved in dealing with any issues involving Goldman or other issues on which he lobbied.

The Obama administration has already said it will step up its monitoring of lending patterns by financial institutions that have received bailout money. It also said it would seek to limit executive compensation at banks that receive taxpayer help in the future.

During his confirmation hearings, Mr Geithner said the bailout needed ’serious reform’ and pledged that the administration would impose ‘tough conditions’ to protect taxpayers. — NYT

Source : Business Times - 29 Jan 2009

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Downturn demand makes Big 4 hire more

Downturn demand makes Big 4 hire more

Accountants gear up to manage risk and restructuring, keep an eye on fraud

By LYNETTE KHOO

(SINGAPORE) Bad times in the corporate world translate to even busier times for accountants. No wonder the big boys are hiring.

Audit firms are hoping to tap the new pool of senior talent from the once-sizzling financial industry that is now downsizing. During the boom years, financial institutions are often a more attractive choice for job seekers.

As the downturn throws up more distressed companies, there is now greater demand for restructuring and risk management advisory. Incidents of possible fraud will call for more forensic investigations.

The Big Four audit firms say they are still recruiting at both the entry-level and for senior positions.

Ernst & Young says it expects to hire over 250 new staffers in Singapore this year. Over the past six months, it has recruited over 20 partners in the Far East Area, of which some are in Singapore.

‘Certain parts of our business - for example, restructuring and advisory in helping our clients manage the financial volatility - are more active and we will deploy resources to meet such increased activity,’ said Steven Phan, country managing partner at Ernst & Young Solutions LLP.

The recent pay cuts thrust upon KPMG’s middle to top management had stoked speculation that its peers could follow suit. The other three audit firms said, however, that they had not cut salaries.

Ernst & Young and PricewaterhouseCoopers LLP (Singapore) said they would manage their staff costs through a flexible wage system.

PwC’s human capital partner Deborah Ong told BT that the firm has no plans to slow down recruitment or retrench staff, and is on the lookout for senior talent.

As demand for its transactions advisory eases, PwC is deploying staff to areas of growing demand such as distress M&A deals, business recovery work, risk and governance compliance, she added. PwC is the appointed receiver for the Lehman Minibonds series that have defaulted.

Audit firms say they are also hoping to tap the new pool of senior talent from the once-sizzling financial industry that is now downsizing. During the boom years, financial institutions are often a more attractive choice for job seekers.

Chaly Mah, CEO of Deloitte Asia Pacific, told BT his firm has not been able to hire enough, and is now taking the opportunity to consolidate resources and make strategic hires. The audit firm is scaling back its recruitment of new graduates from 200 to 160 this year but is looking to step up its recruitment of more experienced hires.

‘The past few years have been a difficult market for employers, especially the accounting profession. This is why many companies are likely to take this opportunity to take stock,’ Mr Mah said.

Meanwhile, as fraud cases creep into view, there are growing murmurs that they should be detected by external auditors. Audit firms could find themselves busier than ever if they are to fulfil these expectations.

A recent scandal involving Indian IT giant Satyam Computers faking accounts has led the public to question why its auditor PwC did not discover the false inflation of profits for years.

But the Big Four stressed that the key objective of external auditing is not to sniff out fraud, but to present ‘a true and fair view’ of the financial statements.

While external auditors need to assess internal controls to make sure financial statements prepared by management are fairly presented, it is not the same thing as sniffing out and nailing fraud from the outset, said Danny Teoh, managing partner at KPMG LLP.

‘Uncovering fraud is the purview of forensic specialists,’ Mr Teoh said. ‘The objectives are very specific and different from that of an auditor reporting on financial statements.’

To integrate the two roles would be an overkill, he added. ‘The best approach therefore is to prevent fraud in the first place, by implementing a robust risk management programme within an organisation.’

KPMG is the special auditor for Advance Modules, and its stunning report last November showed the company faking sales records to meet an internal profit target for fiscal 2005 and undertaking a series of complex actions to cover up. This saga implicated another listed firm, NEL Group.

Mr Mah, who is also president of CPA Australia (Singapore division), noted that since the Enron days and the collapse of Arthur Andersen, the audit profession has stepped up to pay attention to potential fraud in the course of its work.

‘In an economic downturn, there is probably going to be an increased possibility of fraud,’ he said. ‘We have to do the right thing to satisfy ourselves that this is not happening by probing further, not believing in some of the things that we are told but to independently verify the matter.’

Source : Business Times - 29 Jan 2009

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