Senator Saleem Mandviwalla, who is the chairman of the Senate standing committee, said it was his brainchild which the government later snatched by introducing its own bill, but he had no objection over the bill after his amendments were incorporated.
According to the statement of objects and reasons, the existing institutional arrangements and legal process for revival and rehabilitation or distressed companies are both inadequate and time consuming. Efforts in the past have been made largely on creditor friendly recovery laws which resulted in an imbalance of legal remedies for rehabilitation of debtors. Therefore, a comprehensive legal framework is now urgently needed to rehabilitate the distressed companies and businesses in the country.
The Corporate Rehabilitation Bill, 2016 provides a mechanism for rehabilitation of the distressed companies which is need of the hour for sustainable growth of corporate sector. The Bill will put the economy on fast track and will result in reduction of number of Non-Performing Loans.
The Bill provides an equal opportunity to the companies and its creditors to come up for the rehabilitation proceedings of the companies before the High Court(s). The Bill requires submission of rehabilitation plans before the High Court.
The Bill further provides that rehabilitation plans will be mutually agreed upon by the shareholders of the companies and their creditors. In this regard, the High Court shall appoint insolvency experts who will undertake mediation between the companies and their creditors for determination of liabilities towards the creditors.
The specialized features and unique requirements of Corporate Rehabilitation Bill necessitate the promulgation of an independent and comprehensive piece of legislation. Speaking on a point of public importance, Senator Usman Khan Kakar accused the Industries Ministry of cancelling the explosives license for supplying dynamite which is used for blasting rocks during mining operations. The chair directed the industries minister to brief the house on the issue on September 14.
Copyright Business Recorder, 2017