ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) Chairman Aamir Khan has said that the government has decided to establish Corporate Restructuring Board (CRB) to implement new schemes for speedy revival/restructuring of companies and rehabilitation of distressed entities.

The SECP chairman informed the Senate Standing Committee on Finance, on Wednesday that major amendments have been proposed in the Corporate Restructuring Companies Act, 2016.

The SECP chairman briefed the committee that the existing institutional arrangements and legal processes for revival and rehabilitation of distressed entities are time consuming and inadequate, which make the rehabilitation of distressed entities challenging.

Moreover, the existing Corporate Restructuring Companies Act (CRA) does not have provision to facilitate corporate restructuring companies (CRC) to carry out operations smoothly.

Aamir Khan added that the proposed law will make the CRCs operate efficiently, acquire the non-performing assets (NPAs) from the financial institutions easily, raise funding for acquisition of NPAs through segregation risks and rewards and extend financing facilities.

Corporate Restructuring Companies Act 2016: Bill to facilitate revival of distressed assets, cos

The amendments have been proposed after considering the government’s objective of reviving the distressed economic assets of the country and they will also enable the CRCs to reach compromise with the distressed entities promptly, he added.

The Senate committee strongly supported the initiative of the SECP for the restructuring of companies.

The chairman SECP informed that the CRB to be appointed by the federal government comprising maximum five members.

Aamir Khan stated that if the scheme is sanctioned, the same shall be binding on the concerned obligor, creditor, members, shareholders, liquidators and other persons.

Copyright Business Recorder, 2021