Dubai - DIFC issues new insolvency law
Wednesday, 06 12 2019, Category: Economy, Country: U.A.E
Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, has enacted a new insolvency law for companies operating in Dubai International Financial Centre.
The Law – No. 1 of 2019 – will come into effect on August 28 and aims to “balance the needs of all stakeholders in the context of distressed and bankruptcy related situations in DIFC, facilitating a more efficient and effective bankruptcy restructuring regime”, according to a statement on the Ruler's website.
The law “introduces a new debtor in possession bankruptcy regime … which will also place the DIFC at the forefront of complicated debt restructurings”, according to the statement.
The latest measure by Dubai comes after the high-profile collapse last year of Abraaj Group. It was once the region’s biggest private equity company which claimed to manage almost $14 billion (Dh51.42bn) of assets at its peak before investors such as the World Bank’s International Finance Corporation and the Bill and Melinda Gates Foundation questioned the use of their money in the company's $1bn Abraaj health fund.
An ensuing investigation uncovered corporate governance issues at Abraaj and led to the arrest of its founder, Arif Naqvi, in the UK, and other executives.
“Ensuring that businesses and investors can operate across the region with confidence is crucial,” said Essa Kazim, Governor of DIFC. “We are committed to continuously enhancing our legislative infrastructure in order to give leading global institutions the certainty and access they need.”
Source: The National - UAE