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{
    "id": 42357,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/42357/?format=api",
    "text_counter": 464,
    "type": "speech",
    "speaker_name": "Mr. Muriithi",
    "speaker_title": "The Assistant Minister for Industrialization",
    "speaker": {
        "id": 91,
        "legal_name": "Ndiritu Muriithi",
        "slug": "ndiritu-muriithi"
    },
    "content": "Mr. Deputy Speaker, Sir, hon. Members will note that Part III of this Bill, which is voluminous, introduces the idea of a moratorium, or a period during which companies can go through a process of curing themselves if they are insolvent. This is seeking to change the environment under which, for example, receiverships take place. So far, in most of corporate Kenya, receiverships tend to be an exercise in which assets are sold off and a company is liquidated. This fails to make the clear distinction between insolvency and the possibility of bankruptcy. Throughout the world, three-quarters of businesses fail; businesses primarily because of cash flow issues, and not because they are not profitable. A company has the real possibility of facing bankruptcy if it is unprofitable and, therefore, is not sustainable in the long term. For most companies, the issue is insolvency, which is about inability to pay debts when they are due. But that is not always the reason why a company is not profitable. In fact, more often than not it is for reasons that can be cured by improving the management processes, introducing new capital into a company and so on. That is the reason why the modern profit law should seek to provide a moratorium so that companies are cured instead of being liquidated."
}