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{
    "id": 575535,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/575535/?format=api",
    "text_counter": 358,
    "type": "other",
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    "speaker": null,
    "content": "about this Bill being transacted in this House for quite some time. It has been with us for quite some time and I am happy now it is prioritised. Firstly, it has been criminal as any struggling business in this country has never come up. Any business that you hear has been put under receivership is like signing for its death. I fear that even Kenya Airways is likely to face the same fate as other businesses. This has been as a result of the legal framework that we have in this country. It has also been as a result of business practices by the same people who are entrusted with the responsibility of getting the businesses out of the struggling periods. The receiver managers are the same ones who even commit worse economic crimes to these entities to the extent that the businesses end up collapsing. I am happy that today we are discussing a Bill that is going to ensure that we establish a framework through which any struggling business can be put to some system of professional management that will ensure that the interests of the creditors and the shareholders are well taken care of. One reason why people form limited liability companies, and you very well know this as a lawyer, is to protect people from losing individual wealth as a result of trying to do business. Many people have taken advantage of the fact that we put directors in place on an urgency kind of relationship, but they end up bringing down business entities that they are in charge of. In the process, that results into even greater loss not only to shareholders, but even to those who transact business with the particular companies. I have in mind creditors who are the most disadvantaged. Therefore, one of the reasons why this Bill is important is that Part 1 is going to enable those persons and entities to continue to operate. I am talking about insolvent companies and other corporate bodies, whose financial positions are redeemable. You will agree with me that most of these companies have their financial positions redeemable, but because they are subjected to these managers, who are not interested in redeeming them, they end up leading them to their death. We should enable those persons and entities to continue to operate as going concerns, so that ultimately they may be able to meet their financial obligations to their creditors in full, or at least, to the satisfaction of those creditors. This means that if companies are going through insolvency and are put under receivership, they will still be treated as going concerns until they are able to pay off the creditors and anybody who has an interest in terms of claims against these companies. So, the going concern concept that this Bill is emphasising is, in my view, the right proposal that we must support; it is to achieve better outcome for the creditors, so that we do not have a situation where people take advantage. This is because creditors will not participate in the management of struggling businesses. The other people who have given money to companies will not participate in management. Therefore, we need to protect them through legislation."
}