Final say sought on corporate rescue bill
With most details ironed out, HK businesses will be asked views on issues such as whether management or creditors can start proceedings
Hong Kong businesses will soon get an opportunity to voice their final opinions on a proposed corporate rescue bill that aims to give troubled companies more time to find white knights prepared to come to their rescue.
Official Receiver Teresa Wong Siu-wan said the government was keen to push ahead with the corporate rescue law.
"Hong Kong has lagged behind other markets in terms of not having a law on corporate rescue. We are keen to push ahead with the reform to help companies that want more time to restructure before applying for liquidation," Wong said.
The proposed bill has had several rounds of consultation with business, the latest of which was held in 2009. But while a basic framework for the new law had been ironed out during this process, there were still some provisions that remained to be finalised, and the government planned to hold another, smaller consultation soon.
Hong Kong has no bankruptcy protection law, so companies can be wound up by a single creditor. The corporate rescue bill is aimed at giving troubled companies six months to restructure or find a buyer, and during the grace period the company cannot be wound up by creditors.
The government first mulled such a law in 2001 and then again in 2003.
In its first draft, the law would have required that employees receive all unpaid salary before a corporate rescue could begin; but liquidation professionals said companies that could comply with this were not in trouble. The second attempt tried to cap staff payments, but employees opposed it.