Major reforms of Singapore's insolvency laws expected: Indranee Rajah
- POSTED: 25 Aug 2014 17:46
- UPDATED: 25 Aug 2014 23:40
The Senior Minister of State for Law highlighted recommendations from the Insolvency Law Review Committee that she hopes would position Singapore as a hub for insolvency and corporate restructuring work in the region.
SINGAPORE: Major reforms of insolvency laws are in the process of being enacted, as Singapore tries to position itself as a regional hub for insolvency work and debt restructuring, said Senior Minister of State for Law Indranee Rajah on Monday (Aug 25).
Speaking at the Regional Insolvency Conference organised by the Law Society of Singapore, she noted that an increase in global interest rates and a tightening of liquidity in markets are likely to increase the risk of corporate defaults. This could in turn lead to an increase in a number of restructuring and insolvencies. As an open economy, Singapore would have to deal with insolvencies within the country, as well as the impact of regional insolvency events, she said.
Ms Indranee highlighted recommendations from the Insolvency Law Review Committee (ILRC) that she hoped would position Singapore as a hub for insolvency and corporate restructuring work in the region.
"Firstly, Singapore remains a convenient and neutral location which provides proximity and connectivity to major Asian economies. Secondly, the legal processes such as schemes of arrangement or judicial management that are used to effect a restructuring in Singapore are well established and offer a flexible approach towards restructuring," she said.
The final set of the ILRC recommendations were submitted to the Ministry of Law in October last year. The ILRC suggested extending judicial management to foreign companies, giving them the option of coming to Singapore and using a Singaporean process to restructure its debts.
It also recommended reforms to strengthen the effectiveness of judicial management and schemes of arrangement as tools of restructuring. This includes adopting certain features from US Bankruptcy Law. In addition, the ILRC also recommended reforms to regulate the insolvency profession, to ensure a strong base of insolvency professionals in Singapore.
Ms Indranee said the Law Ministry would continue looking for ways to improve Singapore's approach to cross-border insolvencies, and to promote Singapore regionally and internationally.