- POSTED: 07 Oct 2013 19:23
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The Insolvency Law Review Committee proposes consolidating laws covering both personal bankruptcy and corporate insolvency into a single piece of legislation
SINGAPORE: A committee appointed to review Singapore's bankruptcy and corporate insolvency regimes has submitted its findings.
The Insolvency Law Review Committee's report offers 97 recommendations for a new Insolvency Act to update and modernize current policies.
The Minister for Law appointed the Insolvency Law Review Committee in December 2010.
The main recommendations relate to combining the bankruptcy and corporate insolvency regimes into a single piece of legislation.
Other recommendations seek to enhance Singapore's attractiveness as a corporate debt restructuring hub by extending the judicial management regime to foreign companies and abolishing the concept of ring-fencing which requires foreign companies to pay local creditors before international ones.
Ring-fencing requires all debts incurred in Singapore by a registered foreign company to be paid in priority to the debts owned by it to all other international creditors.
As of August, 83 companies in Singapore were in compulsory liquidation for 2013, according to the Ministry of Law.
On the individual side, the recommendations include expediting bankruptcy procedures when it's believed the debtor will move assets overseas and excusing bankrupts from criminal liability if they have no knowledge they have been made bankrupt.
As of August, 1,878 applications for bankruptcy have been filed for the year, 1,388 bankruptcy orders have been made and 1,447 people have been discharged from bankruptcy.
Other recommendations include enhancing the court's powers to examine discharged bankrupts in order to identify assets that should have been rightfully vested in the bankrupt's estate.
The committee's chairman, Senior Counsel Lee Eng Beng, said in a statement: "It is important that our insolvency regime keeps pace with the increasing scale, complexity and cross-border nature of modern businesses.
"The Committee hopes that its report and recommendations will act as a roadmap for an update of Singapore's insolvency law regime under a consolidated insolvency legislation, to ensure the regime remains robust, effective and fair in the modern commercial context."
The committee's report will be open to public comment from October 7 to December 2.
The public can also view the consultation papers at www.mlaw.gov.sg and www.reach.gov.sg.