Hawkamah Announces Findings of Pioneering Survey of Insolvency Systems and Creditors Regimes in MENA
Hawkamah Announces Findings of Pioneering Survey of Insolvency Systems and Creditors Regimes in MENA
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The Hawkamah Institute for Corporate Governance today announced the results of its pioneering benchmark survey of insolvency regimes of countries in the Middle East and North Africa region. In the survey that measured the quality and development of insolvency systems, the MENA region scored an average of 88 points compared to 124 scored by OECD countries in a recent survey that applied the same scoring system. In the survey's other findings, DIFC was ranked number one in an assessment of the insolvency systems of regional organisations, scoring 126 points out of a maximum of 155. Based on the methodology of a joint IMF-World Bank pilot exercise titled "Reports of the Observance of Standards and Codes" (ROSCs), the Hawkamah survey featured a questionnaire that covered the diverse aspects of an insolvency regime including, Legal Framework for Creditors Rights; Risk Management and Corporate Workout; Legal Framework for Insolvency and Reorganisations; and Proceedings and Implementation of the Insolvency System. The survey was undertaken by Hawkamah jointly with the World Bank, INSOL International and the Organisation for Economic Cooperation and Development (OECD) in close collaboration and cooperation with authorities, lawyers and legal professionals in the region.The eleven jurisdictions included in the survey were the UAE, Lebanon, Egypt, Jordan, KSA, Bahrain, Qatar, Oman, Yemen, and Palestine, as well as the Insolvency Law of the Dubai International Financial Centre (DIFC). Speaking about the regional findings, Dr. Nasser Saidi, Chief Economist of the DIFC Authority said that while the results are satisfactory insolvency regimes need to be strengthened to help countries in the region manage current and future challenges. The survey revealed that GCC countries have strong insolvency systems in all but four areas: regulatory considerations (practitioners), institutional considerations (judicial), corporate governance and credit information systems. The survey results were released at Hawkamah's first Symposium on Insolvency Laws and Creditor Rights Systems in the MENA region, being held on 26 and 27 May at the Abu Dhabi Hilton Hotel. Government policymakers and regulators, judges and lawyers, restructuring and insolvency professionals, bankers and accountants, auditors and financial forensic experts from the MENA region are attending the two-day event. Key figures participating in the Symposium include HE Mahmoud Mohieldine, Minister of Investment in Egypt; Mahesh Uttamchandani, Senior Counsel at the World Bank; Dr Rainer Geiger, Senior Regional Advisor OECD; Robert Sanderson, President of INSOL International and Sumant Batra, Vice President, INSOL International. Emphasising the critical importance of effective insolvency systems in the region, Dr. Saidi said at the Symposium: "The MENA region is going through a financial crisis that it had no role in instigating. Under these circumstances, it is more important than ever to study insolvency laws and creditors' rights in the region. The importance of these laws is that they help mitigate the repercussions of the financial crisis by outlining specific procedures to deal with insolvency or defaulting cases and the possibility of restructuring or even rescuing them when feasible." Discussing the objectives of the survey, Dr Saidi said its purpose was not limited to improving ways of dealing with the financial crisis but includes procedures that help limit its future effects that may extend to many years. The results of the survey reinforce the need for putting in place strong legal foundations for carrying out insolvency proceedings and guaranteeing creditors' rights, he said. HE Dr Mahmoud Mohieldine, Egyptian Minister of Investments said in his speech that MENA countries focus more on establishing, licensing and entry processes rather than exits. He explained that exit processes are not limited to cases of insolvency but also apply to mergers and acquisitions (M&As). Dr Mohieldine stressed on the need for focusing on small and medium enterprises (SMEs), particularly in emerging markets. Good insolvency systems provide a clear process for the liquidation or distribution of assets for SMEs facing insolvency, he said. Mahesh Uttamchandani of World Bank said that having an effective legal and regulatory framework helps mitigate the negative implications for all stakeholders in cases of insolvency or default. He explained that having clear and strong insolvency systems can help minimise the influences of the financial crisis by allocating risk in a predictable, equitable, and transparent way, thereby bolstering confidence in the credit system, maximising value through continuation of a viable enterprise and enabling financial institutions to curtail deterioration of assets by providing a means of enforcing claims. He also explained that lacking good insolvency systems makes banks more reluctant to lend, leading to slower economic growth. Participants in the Hawkamah Symposium will issue the "Hawkamah Declaration on Insolvency Systems" on the second day of the event to outline steps for improving insolvency frameworks and processes. 58_1 From left to right:
  • Robert Sanderson, President of INSOL International
  • Dr. Nasser Saidi, Chief Economist of the DIFC Authority
  • Sumant Batra, Vice President, INSOL International
58_2 Dr Nasser Saidi speaking at the event

Testimonials

  • The certified Board Secretaries Workshop provided by Hawkamah and Dubai Financial Market is an essential course for learning corporate governance, scope and responsibilities of the board secretary and understanding the governance and disclosure requirements of the Dubai Financial Market and the Securities and Commodities Authority. It is a practical course which combined recent best practices and key learning lessons. I would highly recommend it for people involved in corporate governance and in particular in a listed company.

    Omran Al Zamani - Senior Legal Counsel - Dana Gas PJSC

  • Great program! Very well done and very useful information delivered in an excellent manner. The workshop was very inspirational, energizing, bringing lots of ideas, with both substantial and in-depth knowledge together with case studies. Well-balanced composition of participants, which contributed to interesting and focused discussions and exchanges. I would highly recommend it to anyone that is interested in improving their proficiency and core competencies.

    Hassan Murad Agha - Group Head of Compliance & Internal Control - Gulf General Investment Co. (PSC)

  • All companies should promote their boards, executive managers or staffs who have board responsibilities for subsidiary companies to attend corporate governance training. Hawkamah provides the ability for people and companies in the GCC to upskill in the area of corporate governance and directorship through a comprehensive programme teaching international best practice which has been tailored to regional specific governance issues.

    Alastair Mulligan - VP Asset Management - National Central Cooling Company PJSC (TABREED)

  • I am truly honored to attain this certification and I recommend the Compliance Heads of all DFM listed companies to participate and achieve this certification.

    Nabeel Mirza - Senior Director & MLRO - Compliance - GFH Financial Group B.S.C.

  • The workshop has added a level of professionalism to my practice. It addressed and discussed  the right concepts to promote better governance and effective support for business in line with rules and procedures.

    Osama Issaq Al Haj - Head of Legal & Board Secretary - Dubai Islamic Bank

  • A very interesting and informative course which has helped me to adapt my Board Secretary knowledge further to my role as Company Secretary.

    Hamad Al Hosani - Group Company Secretary - Emirates NDB Bank

  • Anyone who wants to enter the world of boards and governance; this is your passport.

    Jehad A. Kazim - Director - Legal Services Dubai Chamber

  • The Directors Development Program was one of the most beneficial programs I attend during my career life. The strength of the program comes from the way it was structured as each part covered very important aspects of the required management role.

    Nada Ishaq Abdul Karim - Manager - The Secretary of The Board of Directors - Bahrain Islamic Bank BSC

  • The DDP offered by the Hawkamah Institute is an excellent course to prepare directors to understand and fulfil their obligations properly as members of the board. I have benefitted immensely from this program and have started to implement some of the best practices taught on the boards that I am involved in.

    Amir Arab - Director - Havenvest Private Equity Middle East Limited

  • The Director Development Program is great way to gain insight and improved understanding in areas such as corporate governance and board functionality. I would highly recommend the program as a foundational step before they begin their board experience.

    Bindu Ann Joseph - Chief Operating Officer - 3W Networks

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