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{
    "id": 575446,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/575446/?format=api",
    "text_counter": 269,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "The other bit that is interesting in this Bill is that it gives an opportunity for insolvency practitioners to turn around the business and not to simply liquidate them. The existing insolvency law has been wanting on this. If you remember, historically in this country, Uchumi is put into receivership today and the next day, assets are advertised for sale and nobody tries to turn it around. This Bill sorts out this problem. Insolvency practitioners are expected to go a step further to try and rescue companies. The object of the Bill at 3(1)(b) is that they should do their business to enable the companies fulfil the expectations of the shareholders and creditors. Also, at Clause 3(1)(b)(ii), they are expected to conduct the business in such a manner to achieve a better outcome for the creditors and all the stakeholders. In (c), the need for turning around insolvent institutions is also dealt with at Clause 3(c)(i) and (ii) of this part. With regard to the time-frame, some insolvency practitioners and receivers have gone into business and taken forever making stakeholders, namely, the shareholders and creditors incur a lot of loses. The Bill requires that within a very short time, they should find out whether the company can be turned around or should be liquidated. The Bill proposes to resolve this at Clause 3(1)(d) and (e). For institutions whose financial positions are irredeemable, they are supposed to take a very short time to sort them out and liquidate them. The procedure for quick resolution is also mentioned at Clause 495 of this Bill. The next bit is that this Bill takes into account the interest of the shareholders. Currently, the insolvency law has not adequately catered for the interest of the company contributors. They have been looking at the interest of the creditors but, in the process, they end up ripping off the creditors. They have been operating as undertakers. If your company is put under receivership, you know that you are done. Some of them operate as asset strippers instead of making sure that the company survives. This Bill, at various sections which I have mentioned - like 4(2) and 5 - provides that they must apply to the court in order to liquidate. Clause 428(1) provides that any creditor or contributor is given the opportunity to apply to the court to stay liquidation proceedings. This was not there before. Now, any stakeholder, if you feel that your company is being liquidated unfairly, you are given the opportunity to go to court. This has not been there before. Also, Clause 496(2)(d) and (c) gives grounds under which a stakeholder can go to court to stop liquidation. Moving forward, this is very good. It gives the company’s contributors and other stakeholders something to hold on to. If it is left for the insolvency practitioners to decide without giving the other contributors an opportunity to go to court and stop them, they could behave in the olden ways of stripping the assets and selling even very viable companies. Under Clause 455(1) and (2), both creditors and contributors are entitled to inspect all the records in the company’s possession or under its control. Before, once your company went down into receivership, you were not even allowed to go into the company. The receiver took over and you were treated as a criminal. At Clause 455(1) and (2), you are allowed to go and inspect the records of the company. At Clause 465, this Bill stipulates that if a company is being liquidated, the liquidator may convene a general meeting. You can call a meeting of the court and the shareholders. At Clause 465(2)(a) and (b), a shareholder can request for a meeting to make sure that things are done well. 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."
}