CMS Seminars
2007 Seminars
Joint Centre for Malaysian Studies/Centre for Southeast Asian Studies Seminar
15 March 2007 *Joint seminar with the Centre of Malaysian Studies
Associate
Professor Aishah Bidin
Faculty of Law, Universiti Kebangsaan
Malaysia (UKM)
"Corporate rescues in Malaysia - An agenda for law reform"
Abstract
The primary aim of a corporate rehabilitation regime is to provide alternative mechanism for the restoration and revival of business of a financially distressed company on the brink of collapse. This is done with a view to continuing its existence, keeping trading and maximizing returns to the creditors. A corporate rehabilitative framework has proven to be beneficial as compared to the drastic approach of liquidation as it facilitates the continuation of a business with the view of achieving certain objectives. Firstly the preservation of economic value of the company as a going concern for all, secondly, minimizing the losses for creditors including employees and thirdly, providing a measured distribution of assets of the company. Under the current corporate insolvency law in Malaysia, there are several methods of dealing with company insolvency, namely receivership, the winding-up process, scheme of arrangement and two other mechanism which were introduced as a result of the financial crisis in 1997 namely the special administration under the Pengurusan Danaharta Act 1998 and the Corporate Debt Restructuring Committee (CDRC) under the auspices of the Central Bank of Malaysia. The objective of this paper is to evaluate the adequacy of the current legal framework of corporate insolvency in Malaysia. The author is of the view that the current system is inadequate and that there is a need for the introduction of a corporate rescue or rehabilitation legal framework for Malaysia. In the process of introducing areas of reform on corporate insolvency and corporate rescues, a comparative analysis was made with other jurisdiction in an effort to set a benchmark in line with international standards. This includes comparative studies with the position in United Kingdom, Australia and Singapore. The paper will conclude with a legal framework for corporate rescue in Malaysia incorporating reform in terms of providing a rehabilitation plan, formulation of moratorium, a realistic framework and the emphasis on protection of creditors' interests.
About the Speaker
Associate Professor Dr Aishah Bidin is an Associate Professor of Law and the former Deputy Dean at the Faculty of Law, Universiti Kebangsaan Malaysia (UKM). Dr. Aishah obtained her LL.B (Hons) from University of Malaya, Masters in Laws from the University of Kent and her Ph.D in Law from University of London, United Kingdom. An academic staff of the law faculty of UKM since 1984, Dr. Aishah was also involved in the Law and Accounting teaching program at the Law Faculty of the University of Kent. In 1996, she was seconded to the law practices of Messrs Allen & Overy, (Banking and Securities Department) and Messrs Travis, Smith and Braithwaite, (Banking and Corporate Insolvency Unit), both London law firms. Her areas of specialization include company and corporate finance law, securities regulation, bankruptcy and insolvency law. She is also the consulting editor for the International Corporate Law Bulletin, London, Sweet and Maxwell Group and the consulting editor for the Journal of Society of Advanced Legal Studies, Kluwer Press Group, London. She is a member of the Steering Committee of the Malaysian Corporate Law Reform Committee (CLRC) and a member of the Technical Sub-Committee for the CLRC. She also sits in two other sub working groups of the CLRC namely the working group on corporate governance and shareholders rights and as the deputy chairman for the working group on insolvency and corporate securities. Currently she is the Honorary Research Fellow at the Centre for Malaysian Studies in Monash Asia Institute, Monash University. She is also a Visiting Research Fellow in the Department of Business Law and Taxation Faculty of Business and Economics, Monash University.
Contact Details
Associate Professor Dr Aishah Bidin, Faculty of Law, Universiti Kebangsaan Malaysia aishah@pkrisc. cc. ukm.my