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{
    "id": 494394,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/494394/?format=api",
    "text_counter": 223,
    "type": "speech",
    "speaker_name": "Hon. Chepkong’a",
    "speaker_title": "",
    "speaker": {
        "id": 1154,
        "legal_name": "Samuel Kiprono Chepkonga",
        "slug": "samuel-kiprono-chepkonga"
    },
    "content": "provide an insolvency system along with measures that are necessary in an insolvency system that is functional and economically sound. The rationale for reforming the insolvency regime in Kenya is fivefold. One, it is intended to provide opportunity for companies and individual enterprises with an opportunity to survive and, therefore, spur economic development. Two, it is intended to maintain commercial morality and public confidence. Three, it is intended to provide a fair balance between restructuring and liquidation that will allow distressed enterprises to explore possibilities of an easy and efficient revival. Fourthly, the intention of the reformed legislation is to provide a simplified process for small enterprises during the insolvency processes. Finally, it is intended to professionalise the insolvency practice by introducing insolvency practitioners as mentioned by the Leader of Majority Party while moving this Bill. Hon. Temporary Deputy Speaker, in developing the Insolvency Bill, we are guided by the need to facilitate what is popularly referred to as “corporate rescue”. Many people, particularly Members of Parliament and Kenyans, may have heard about what is popularly referred to in the United States as “Chapter 11”. That is corporate rescue. This particular legislation intends to introduce, not in the format of the United States in terms of what they call Chapter 11, what we call corporate rescue process in this particular legislation. It is expected that the administrator will play a significant role in the process. Accordingly, the provisions contained in this Bill will ensure that a company enjoys a moratorium, so that it can introduce processes that will assist it to be revived during the moratorium period. Further, provisions on voluntary arrangements and administration have been enhanced in this Bill with a new schedule giving detailed provisions on how to deal with voluntary arrangements and administration. The essence of this provision is to ensure that companies that are capable of surviving are given an opportunity to do business, pay their debts and continue in business, rather than being wound up. For those companies that have no chances of survival, they will be liquidated in a very expeditious manner, so that the value of those companies and assets are rescued. The corporate rescue procedures contained in this Bill ensure that during the period when a company is in distress, a moratorium is provided and an arrangement is put in place with the debtors and the shareholders to allow the company time to recover. If this will not be possible, after a defined period, the company will be wound up. I would like to give an example of Uchumi. Although Uchumi followed this process, these particular procedures and regulations were not in place. There were just benevolent shareholders who decided to put in place rescue procedures for reviving Uchumi Supermarket. If this law was there, Uchumi Supermarket would have been revived in accordance with the provisions of this Bill. As you know, Uchumi Supermarket survived liquidation because of the arrangement between the shareholders and the creditors. As you know, Uchumi right now, is not only on a recovery path, but on a profitability path. It has in fact, expanded not only in Kenya, but even the East African region. We would like to see many other companies being rescued. One other company that you know is currently under receivership is Jetlink. If this law was there, it would have ensured that insolvency practitioners ensure that Jetlink continued in business as arrangements were put in place to revive it and pay debts as and when they were due. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}