Abu Dhabi: Saudi Arabia’s bankruptcy committee has received about 381 requests for liquidation, settlement and reorganisation from companies, institutions and individuals between January and mid-May, amid COVID-19 pandemic, Saudi media reported.
These requests entail the launching of the relevant authorities several procedures, including eight preventive settlement, as well as 40 financial reorganisation, 279 administrative liquidation, 51 liquidation, and three liquidation for small debtors.
The bankruptcy committee has been working since its establishment to provide awareness materials in the form of guides, forms and tools aimed at facilitating and clarifying the provisions of bankruptcy procedures, enabling the beneficiary to be familiar with the stages of the bankruptcy procedure, by reviewing the content of the page of each of the seven procedures.
And bankruptcy procedures aim to enable the bankrupt, debtor or defaulter, whose financial condition is expected to suffer from disruption, to take advantage of the procedures to regulate theiur financial conditions to resume their activity and contribute to supporting the economy and its development taking into account the rights of creditors, and maximising the value of bankruptcy assets.
The bankruptcy system is among the largest in the history of Saudi Arabia, and it drew the most prominent international practices of developed countries that are compatible with the economic and judicial environment in Saudi Arabia in light of its Vision 2030 and the national transformation programme.
However, the system does not adopt the bleak stereotype of bankruptcy that prevailed in some applications, but rather adopts modern visions to address the financial difficulties faced by the investor or may face it.
Under the system, there are seven procedures that differ in their functions according to the investor’s conditions, as they focus on the highest priority represented in the continuation of the investor’s business as much as possible, and preventive settlement and financial reorganisation were introduced.
The committee was set up based on article 9 of the bankruptcy system issued by Royal Decree no. M / 50 and it has legal, financial and administrative independence. The committee is overseen by the Minister of Commerce.
The committee was assigned tasks and powers that include creating, maintaining and managing a bankruptcy record, preparing a list of bankruptcy trustees and a list of experts after their license, as well as issuing rules regulating the work of bankruptcy trustees and experts, in addition to inspecting and verifying the business of trustees and experts related to any of the open bankruptcy procedures.
In addition to managing the work of conducting the administrative liquidation, providing consultations, services and training, in addition to issuing the forms and documents stipulated in the system and regulations, and organising and sponsoring initiatives aimed at raising awareness of the system.