The Securities and Exchange Commission of Pakistan (SECP) has decided to notify the Corporate Rehabilitation Act (CRA) in the next three months, incorporating viewpoint of all private stakeholders. This was decided in a meeting of the committee, constituted by the Ministry of Finance to review and finalise the draft CRA, held under the chairmanship of acting Chairman of SECP Salman Ali Shaikh.
On the conclusion of the meeting, a participant told Business Recorder on Monday that the SECP had agreed to convene meetings in all the major cities to obtain the viewpoint of the private stakeholders on the proposed law. The technical committee of the Securities and Exchange Commission of Pakistan (SECP) would hear the point of view of leading corporate entities and relevant associations in the private sector.
The proposed law would give an opportunity to the owners of the sick units to re-examine all the issues before going into liquidation. The promulgation of the new law would provide an option to the company creditor's to rehabilitate through a laid down mechanism before selling the project or transfer of shares etc. In case of financial stress on the company, the management could think about the rehabilitation process.
As per the best international company's regulations, the provision of rehabilitation has been provided for the companies. The SECP has followed the best global practices for implementation of this law in Pakistan. Presently, when the process of liquidation starts in the courts, proceedings are usually very long and owners of some units start selling plants, machinery and equipment in view of liquidation process.
In the presence of the new law, the owners of units could think about the rehabilitation of the unit taking into account different financial factors, said the sources. Meanwhile, the acting SECP Chairman gave a brief presentation on the conceptual design of the draft CRA, which was followed by a more detailed presentation by Faisal Naqvi on the legal aspects of the draft law.
Later, Chairman of All Pakistan Textile Mills Association (APTMA) Tariq Mehmood gave a presentation wherein he highlighted the problems faced by the textile sector. Dr Ijaz Nabi was also invited to the meeting as a special guest. During the meeting, it was decided that the members would meet fortnightly and finalise the CRA within the stipulated time of three months. The committee members also decided to seek views and suggestions from the stakeholders. For this purpose, copies of the draft CRA will be sent to a selected group of around 40 people.