Ministry of Commerce and Industry (MoCI) and Capital Markets Authority (CMA) are considering the introduction of a bankruptcy and insolvency law to provide a legal framework to financially distressed companies seeking bankruptcy protection.
Speaking to Muscat Daily on the sidelines of the GCC Regulators' Summit at the Al Bustan Palace Hotel on Monday, Abdullah Salem al Salmi, executive vice president of CMA, said that Oman requires a bankruptcy law to put in place a corporate legal infrastructure to support insolvent companies.
He said, "Bankruptcy and insolvency law is a major element of corporate legal infrastructure. As of now, there is no law
to regulate insolvent companies and guide them on the path of revival or liquidation. So it is very important to have an insolvency law in place."
Salmi added, "The law is under consideration and CMA will join hands with MoCI to come up with it at an appropriate time. However, it is premature to say when the law will be introduced. We have to go through a long process."
If enacted, Oman would follow in the footsteps of Saudi Arabia, UAE and Kuwait. "Some GCC countries have come up with their own insolvency laws and have benefitted from it," added Salmi.
According to experts, the sultanate's commercial law contains rules and procedures governing insolvency, but there is need for a comprehensive insolvency law to cover businesses seeking bankruptcy protection.
The World Bank's 2012 Ease of Doing Business Survey ranked Oman 49th overall out of 180 global economies, but the sultanate stood 76th in terms of resolving insolvency while Saudi Arabia and UAE were ranked 73rd and 151st, respectively, in terms of resolving insolvency.
The World Bank report urged Middle East nations to focus on improving insolvency regimes to create better business environments.
© Muscat Daily 2012
