KUALA LUMPUR, Aug 26– The Insolvency (Amendment) Bill 2020 aimed at amending the Insolvency Act 1967 (Act 360) has been passed with a simple voice majority in the Dewan Rakyat.
Minister in the Prime Minister’s Department Datuk Takiyuddin Hassan, when tabling the bill, said Act 360 was amended based on certain requirements, including transforming existing legal framework into legislation that is more relevant to current needs.
He said that it was also to update the Act to be in line with the development and advancement of international law on insolvency, corporate governance and best practices in insolvency.
“(In addition), prepare the country to face any outbreak in the future or any disaster which may cause a wave of economic crisis,” he said when tabling the Bill for its second reading in the Dewan Rakyat yesterday.
Takiyuddin said the bill would have a positive impact, like in giving individuals the chance to strengthen their current economy without constraints arising from bankruptcy actions and to boost economic growth and national development.
It also gives an opportunity to individuals to better manage their finances, more so after facing unexpected situations like COVID-19, as well as avoiding the sudden increase in bankruptcy cases in a short time.
He said that since Act 360 was approved and published in the Federal Gazette on Sept 30, 1967, section 5 (which is on the minimum bankruptcy limit or minimum bankruptcy threshold) of that Act has been amended four times, with the last one being in 2017.
Takiyuddin said that now the government has again tabled proposals to amend section 5 of Act 360 to raise the minimum bankruptcy threshold from RM50,000 to RM100,000, and thus make the Act more responsive and comprehensive towards the requirements and current issues regarding insolvency.
Meanwhile, he said the government had made a comparative study regarding insolvency laws in several other countries, such as Singapore, Australia, the United States and the United Kingdom.
He said that most of the countries amended their insolvency laws to suit current needs to avoid a sudden increase in bankruptcy cases in a short time as well as to boost their economic growth and national development.
During the winding up session of the bill, Takiyuddin announced that there were 4,151 bankrupts declared, involving Malays (2,312); Chinese (1,028); Indians (307); other races (490); as well as 14 foreigners; based on the Department of Insolvency’s statistics as of July this year.
“The total comprises 3,043 men, 1,103 women and five others unknown… this is according to the data I received,” he said.