The Secretary General of the Bankruptcy Committee at the Ministry of Commerce and Investment, Majid Al-Rasheed, confirmed that the 7th of Dhu al-Hijjah would be the entry into force and the effectiveness of the bankruptcy system, which was issued four months ago and was subjected to careful review by several concerned parties.
He stressed the completion of the preparation of the executive regulations of the system and submitting them to the High Court, which is being studied by the Panel of Experts, in preparation for its approval soon.
This was mentioned during a workshop that was held on Wednesday July 11, 2018 at Asharqia Chamber.
The Chairman of the Board of Asharqia Chamber, Abdulhakeem bin Hamad Al-Ammar Al-Khaldi, opened the workshop with a welcoming speech for the guests, speakers and participants in the workshop.
He emphasized the importance of applying the bankruptcy system to reduce the phenomenon of exit from the market, as the system is supportive and sponsor and address many of the negative phenomena affecting the commercial movement in general.
The website of the bankruptcy committee includes all cases filed, including all the details provided through continuous updating, in order to identify all issues at the internal and external levels that to promote the principle of transparency in these issues.
He stressed that the system will raise the Kingdom's status in the indicators of international reports in the settlement of insolvency, where the Kingdom ranks 168 out of 190 countries currently.
In addition, Al-Rasheed said that one of the objectives of the bankruptcy system is to enable the debtor to regulate its conditions and at the same time taking into account the rights of the creditors.
The system comes to achieve balance between the two and choose the most suitable decisions for enterprises. It limits the cases of exit from economic activity because of financial difficulties. It offers tools and treatments that regulate the value of the assets of the debtor to be sold at the highest possible value in a short period. This creates confidence in the credit market.
He explained that the new system is independent and contains 230 articles out of 17 chapters, and is in line with the new international economic practices as well as with the Islamic law.
The advisor Maher Al-Saeed , the project manager of the bankruptcy system at the Ministry of Commerce and Investment, stated that the system includes seven chapters for bankruptcy proceedings, and it includes the following: ( preventive settlement, financial reorganization, liquidation, preventive settlement of small debtors, financial reorganization of small debtors, administrative liquidation of small debtors, and administrative liquidation).
He pointed out that the system enjoys the participation of more than one government agency, including the Ministries of Justice, Commerce and Investment, and Interior with the cooperation of the General Investment Authority, the Saudi Organization for Certified Public Accountants, the Saudi Bar Association and the Bankruptcy Committee, which is an independent government agency that works under the supervision of the Minister of Trade and Investment. It is to raise the quality of bankruptcy procedures and enhance transparency.
He pointed out that the system has protected the situation of defaulters and small debtors and created special procedures for them to commensurate with their situation.
He said that the aim of the system is to contribute in supporting the Saudi national options affirmed by the vision of the Kingdom of 2030, including access to a prosperous economy, facilitating business and helping investors overcome financial difficulties though balancing the rights of creditors and empowering debtors.
The member of the Commercial Courts Committee, Judge Dr. Ahmad Al-Aboudi, said that the system of bankruptcy to be implemented in the coming months reflects one of the purposes of Islamic law is to save money. It also works with the best international practices in dealing with financial issues. Bankruptcy has a financial and legal nature, as the trader goes through several circumstances that may push him to sell assets. Therefore, the system provided him with protection so as not to emerge from the market through the restructuring of its activity.
Thus, the result is that to maintain a trade movement that should not stop because of some difficulties that can be addressed across the system.
He pointed out that the system referred the financial issues of the commercial courts and thus save the effort and time and reduce the burden on the executive judges. Then, the system could fulfill the principle of specialization for each particular party.
Moreover, the head of the Court of Appeals in Dammam, Sheikh Dakhil Al-Hamad, said that the system would assist the courts in dealing with cases of default, which affected many entities of financial value, and contributed to the reconciliation of creditors and debtors that are important and complex cases in the courts.
In addition, the head of the Committee of Lawyers and Legal Advisors in the Chamber, Khalid Al-Saleh, emphasized that the new bankruptcy system has remained an urgent requirement in the period before the creation of a legislative and legal framework to enhance the investment environment and credit trust in the Kingdom and achieve the vision of 2030, as well as to provide advanced levels of flexibility in the application of bankruptcy or bankruptcy prevention systems.
Al-Saleh indicated that the system came to focus on achieving several objectives, the most important of which are preventive settlement, financial reorganization and liquidation, preventive settlement of small debtors, financial reorganization of small debtors, liquidation of small debtors, and administrative liquidation.
He explained that the provisions of the new system apply to each of the normal person who is practicing commercial and professional business or business in the Kingdom that aimed at profit, as well as companies, entities, organizations and foreign investor.
Al-Saleh pointed out that the discussion of the bankruptcy system is necessary for all those interested in the judicial affairs of the system, which represents the importance of the troubled entities through the existence of legal tools to get out of the stumbling through the settlement under judicial supervision to suit the nature of business and investments of various types and long-term or short-term deadlines.
He also explained that the meeting dealt with the difficulties faced by the troubled entities, who are unable to pay and don't know how to find effective solutions to them. It also dealt with the rules and regulations related to the bankruptcy system.
At the end of the workshop, the Chairman of the Committee of Lawyers and Legal Advisors, Khaled Al Saleh, honored the speakers of this workshop.
