Don Wee on Insolvency, Restructuring and Dissolution (Amendment) Bill

The Simplified Insolvency Programme (SIP) has been an important lifeline to micro and small companies facing financial difficulties by helping them to restructure or wind up efficiently, said MP Don Wee. Speaking in Parliament on Tuesday (Jan 7), he said the proposed amendment to reduce the general eligibility criteria to just one - a liability threshold of S$2 million - will make the SIP accessible to more companies. He raised concerns that the inclusion of larger companies in the SIP, while well-intentioned, can potentially disadvantage creditors and employees, particularly when the winding up process is expedited. For small creditors, this could mean reduced chances of recovering the debts owed to them, he said. He wanted to know how the stakeholders would be protected. Mr Wee also stressed the need for stronger safeguards to deter bad actors from seeking to exploit the scheme to expedite the winding up process. These include requiring third-party audits and additional supporting documentation to ensure the integrity of the process.