Cape Verde. What are the main changes that have been made to your insolvency law?

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1 Thursday 9 th November 2017 Peer to Peer Workshop We asked those jurisdictions participating in Africa Roundtable to answer several questions in respect to their insolvency legislation. The following country summaries have been submitted. When was your insolvency law passed? Cape Verde The Insolvency and Recovery Code - Law nº 116/VIII/ was approved in National Assembly on the 28 th of January of 2016, published in the official gazette on the 22 nd of March of 2016, and went into effect on the 1 st of September that same year. What are the main changes that have been made to your insolvency law? The new Law represents the inception of a dedicated insolvency legal regime in Cabo Verde. The previous provisions that governed the matter dated back to the Civil Process Code (Código de Processo Civil) in the pre-independence era (1962), and were restricted to the liquidation of assets in favor of creditors. Even with the numerous changes made to the Civil Process Code over the years, the articles that touched on matters of insolvency weren t altered or updated, and awaited a dedicated legal decree, which came about only in What specific challenges have you faced in implementing the law? Given its recent inception just last year, the current challenge is disseminating the Law throughout all the intervening stakeholders; the new Law is considerably lengthy (354 articles) and complex, hence significant training and appropriation will be required. What would you like to see happen to address the implementation gap? At this stage, the priority is disseminating and providing training on the Law to judiciary officers, especially magistrates that will enforce it. Insolvency administrators, created under the new Law and to be part of an official court list, will also need specific training to get the appropriate know-how. How has your new law regulated the insolvency profession? The new Law has created a number of figures related to the insolvency and judicial and extrajudicial recovery process mediator and recovery administrator in the case of extrajudicial and judicial recovery, and the insolvency administrator for the insolvency process. The mediator figure is regulated in the Law itself, which also mentions related legal decrees associated with mediation and dispute resolution. As for the statutes of the insolvency administrator, further regulations might be necessary to detail the recruiting procedures and credentials necessary to enter the official insolvency administrator list in the courts. If you have statistics regarding the number of insolvency cases for the past few years, please provide. Unfortunately there isn t specific statistical info that indicates the number of insolvency cases in recent years. It is estimated nonetheless that there are very few cases. There isn t any known case after the new Law went into effect in September of 2016, presumably due to current lack of dissemination and appropriation of the new Law.

2 Ethiopia When was your insolvency law passed? The Ethiopian insolvency/bankruptcy law is part of the Ethiopian commercial law. the commercial law incorporates 5 books and the fifth book is about bankruptcy and scheme of arrangement. the Ethiopian commercial code which includes bankruptcy law is passed in What are the main changes that have been made to your insolvency law? Still now no change is made to Ethiopian insolvency law which was enacted in 1960, but currently we are amending the whole commercial code including the insolvency law. The law is too old and out dated, so we are amending it. What specific challenges have you faced in implementing the law? To my knowledge the Ethiopian insolvency law is not tested practically. I know that there is only one case Holland car case that has brought to court, so it is difficult to know the challenges concerning the insolvency, but when we do a research to amend the law there are some gaps. What would you like to see happen to address the implementation gap? There are some gaps which should be covered by the new insolvency law. There are details of gaps and I will try to cover those points during my presentation. How has your new law regulated the insolvency profession? I can say that there is no provision or practice concerning insolvency profession. Even previously, insolvency law was not part of the curriculum in Ethiopian law schools, but currently it is included in the curriculum. If you have statistics regarding the number of insolvency cases for the past few years, please provide. I only know one case, Holland car case. When was your insolvency law passed? Ghana The Bodies Corporate Official Liquidations Act (Act 180) was passed in We're currently in the process of revising the law and there is an Insolvency Bill which is being reviewed by Cabinet What are the main changes that have been made to your insolvency law? The main changes include provisions for a Restructuring Regime, inclusion of the UNCITRAL rules for cross border insolvency, What specific challenges have you faced in implementing the law? The existing law does not have a rescue regime and its quite old and not reflective of modern business practices

3 What would you like to see happen to address the implementation gap? First, we need to have the law passed, then there should be training for judges, practitioners and other stakeholder groups How has your new law regulated the insolvency profession? Not applicable If you have statistics regarding the number of insolvency cases for the past few years, please provide. Not applicable When was your insolvency law passed? Kenya Our insolvency law was passed by Parliament in September 2015 and became effective in March Our first set of regulations were gazetted on 21 st March What are the main changes that have been made to your insolvency law? There have been several changes to our insolvency law: Both bankruptcy laws and liquidation of companies were consolidated into one single law Provisions regulating insolvency practitioners were introduced Alternatives to bankruptcies and liquidations have been added e.g. summary instalment orders, no asset procedures, voluntary arrangements, administrations Provisions on cross border insolvency were expounded What specific challenges have you faced in implementing the law? There is generally a lack of understanding of insolvency law in Kenya. We have not been able to conduct training on the new concepts of Insolvency law which are complex. What would you like to see happen to address the implementation gap? We need to increase our efforts in capacity building and public awareness. We are currently arranging more stakeholder engagements with the key stakeholders, i.e. insolvency practitioners, legal fraternity, judiciary, accountants etc. How has your new law regulated the insolvency profession? Improved accountability for the insolvency practitioners. They have become more transparent in their dealings as there has been more scrutiny. If you have statistics regarding the number of insolvency cases for the past few years, please provide. As of October 2017, we have 913 bankruptcy cases, 363 Company liquidation cases, 7 summary Instalment Orders, and 12 No asset procedure cases.

4 Liberia When was your insolvency law passed? An Act to Repeal The Fraudulent Act, Chapter 8 of Liberian Commercial Code, Title 7 of The Liberian Code of Laws Revised, and To Enact In Lieu Thereof A New Chapter 8 of The Liberian Commercial Code Entitled the Insolvency and Restructuring Act Approved: December 27, 2016 What are the main changes that have been made to your insolvency law? The Commercial Court has exclusive jurisdiction over all insolvency cases regardless of amount involved and notwithstanding any monetary any monetary limits or thresholds, and all matters relating to the administration of a Debtor s property and Estate disposition thereof Subchapter 2: Section 8.6 Jurisdiction. The law is quite comprehensive and creates an enabling environment for business in distress to rebuild. What specific challenges have you faced in implementing the law? No regulations on implementation of the law. The law is simply on paper and not being executed. What would you like to see happen to address the implementation gap? A mere drafting of the rules/ regulations of how the statute is to operate will be helpful. How has your new law regulated the insolvency profession? The absence of procedures on implementing the statute has chilled operation of the law. If you have statistics regarding the number of insolvency cases for the past few years, please provide. At least a dozen cases have been filed. Due to the lack of guidelines these cases are yet to be determined. When was your insolvency law passed? Mozambique In Was approved the Insolvency and Corporate Reorganization Legal Framework, by Legislative Decree No. 1 of July 4, What are the main changes that have been made to your insolvency law? Was: Introduced a court-supervised reorganization procedure, allowing insolvent but viable companies to continue operation as an alternative to liquidation. Established the possibility of a pre-packaged reorganization, as a way for an insolvent company to negotiate a reorganization plan with its creditors. Clarified the professional qualifications and appointment process for insolvency administrators.

5 What specific challenges have you faced in implementing the law? Lack of knowledge of the law by businessmen Tight requirements for insolvency and Corporate Reorganization Delayed Decisions Cultural reasons associated with insolvency preconception No strict sanctions for non-submission to insolvency What would you like to see happen to address the implementation gap? Introduction of insolvency law in university curriculums More Training of Magistrates More Training of Insolvency Administrators More Training of Lawyers How has your new law regulated the insolvency profession? The new Insolvency Law, clarified the professional qualifications and appointment process for insolvency administrators. An insolvency administrator must be a lawyer, economist, accountant or business administrator with a minimum of 5 years of professional experience or a legal entity specialized in the mentioned field. Insolvency administrators are appointed by the court. If you have statistics regarding the number of insolvency cases for the past few years, please provide. year Ongoing cases New cases Sentence Finalized Other reasons Carried September When was your insolvency law passed? Namibia The Insolvency Act, 1936 (Act No. 24 of 1936) of Namibia was passed by the South African parliament on 1 July 1936 and applied to South West Africa (as Namibia was then known before its independence on 21 March 1990) as from 1 July 1943 by virtue of the Insolvency Amendment Act, 1965 (Act No. 99 of 1965). This Insolvency Act, 1936 continues to be Namibia s primary insolvency legislation even after independence, and it is often used in conjunction with principles of common law, the Companies Act, 2004 (Act No. 28 of 2004) and the Close Corporations Act, 1988 (Act No. 26 of 1988) where the insolvency of juristic persons is concerned. What are the main changes that have been made to your insolvency law? Since the review of the Insolvency Act, 1936 began in 2013, the Law Reform and Development Commission (LRDC) has made significant proposals to amend the Insolvency Act, These proposals deal significantly with the following aspects of insolvency:

6 The enforcement of close-out netting provisions in financial contracts in the event of insolvency; The regulation and supervision of the insolvency profession; The abolishment of the requirement to prove advantage to creditors for the voluntary surrender of a debtor s estate; The clarification of the correct procedure to liquidate trusts; and The introduction of cross-border insolvency provisions. The abolishment of the need to possess the movable asset in the creation of a special notarial bond and the elevation of the otherwise preferent creditor to a secured creditor in the event of insolvency. What specific challenges have you faced in implementing the law? At this stage, the above proposals are just proposals and not law, and these proposals may therefore be subject to change. The LRDC is still working on finalising these proposals before subjecting these for wider stakeholder consultations and before the draft Insolvency Bill is submitted to the Minister of Justice. But already, it appears that the governance, regulation and supervision of the insolvency profession poses a significant challenge for Namibia, given the current economic recession. What would you like to see happen to address the implementation gap? N/A How has your new law regulated the insolvency profession? The Commission has proposed the establishment of an Insolvency Commission to supervise the licensing of insolvency practitioners in Namibia. This Insolvency Commission is envisaged to be an agency within the Public Service and would replace the functions of the Master of the High Court in so far as the appointment and supervision of provisional and final trustees are concerned. In addition to the regulation of the insolvency profession, an institutional infrastructure will be required to facilitate the monitoring and registration of these professionals. Whether it means establishing an independent or by capacitating the Office of the Master which already has this mandate is ultimately the question. If you have statistics regarding the number of insolvency cases for the past few years, please provide. See Appendix A. When was your insolvency law passed? Nigeria A look at the website of the National Assembly (Parliament) revealed that a Bill for an Act to Repeal the Bankruptcy Act, Cap. B2, Laws of the Federation of Nigeria, 2004, and Reenact the Bankruptcy and Insolvency Act, 2016, to make Provisions for Corporate and Individual Insolvency, to Provide for the Rehabilitation of the Insolvent Debtor, and to Create the Office of the Supervisor of Insolvency, and for Other Related Matters (HB. 700) ; was read the Third Time and passed by the House of Representatives in November It also showed that the Senate Conference Committee in July 2017 received and laid the Report of the Conference Committee on the Bankruptcy and Insolvency Act Cap B2 LFN 2011 (Repeal and Re-enactment) Bill, 2017 (SB. 09).

7 However, there was nothing to show that the Bill had been enacted into an Act. The Bill seems to deal more with bankruptcy (personal insolvency) than corporate insolvency, which is why it has been argued that the title is misleading. So, no insolvency Law in the sense of corporate insolvency law has been enacted in Nigeria. The Companies and Allied Matters Act, 1990 (and other legislations dealing with the subject including Asset Management Corporation of Nigeria Act, 2010 (as amended) and Property and Mortgage Law of Lagos State, 2010) continue to govern corporate insolvency. What are the main changes that have been made to your insolvency law? None. This is because it will be premature to discuss the main changes in the Bill since the Bill has not been enacted into an Act as to become enforceable and the situation has not changed. What specific challenges have you faced in implementing the law? Same as answer in 2 above. What would you like to see happen to address the implementation gap? Quick enactment of the Bill into an Act to facilitate enforcement. How has your new law regulated the insolvency profession? No new insolvency Law. If you have statistics regarding the number of insolvency cases for the past few years, please provide. Corporate Insolvency matters are mainly filed at the Federal High Court. The High Courts also handle some insolvency matters but mainly corporate insolvency (secured with legal mortgages) and personal insolvency. Due to the intervention of the Parliament through the establishment and empowerment of Asset Management Corporation of Nigeria (AMCON), the number of corporate insolvency cases had risen in the past few years. However, it was not possible to get current figures of the insolvency cases for the past few years. When was your insolvency law passed? The Insolvency Act Seychelles What are the main changes that have been made to your insolvency law? It repealed the old colonial bankruptcy act and brought those provisions within the new Insolvency Act; It merged companies winding up with Insolvency provisions together, when previously this formed part of the Companies Act 1972; Provides for and facilitates cross border bankruptcy. What specific challenges have you faced in implementing the law? None so far, in view of very little cases of insolvency in Seychelles.

8 What would you like to see happen to address the implementation gap? In light of the fact that there are very little insolvency cases no real challenges have emerged. With continued application of the law, challenges will surely emerge, but none of yet. How has your new law regulated the insolvency profession? The Act has not made any regulatory changes to the insolvency profession. If you have statistics regarding the number of insolvency cases for the past few years, please provide. No official statistics, but at least 2 cases a year and so far only one case of bankruptcy. When was your insolvency law passed? South Africa South African insolvency law is not contained in one single act although it is largely regulated by the Insolvency Act of 1936 which Act deals with the sequestration of individuals and related matters. Regarding corporate bankruptcy, the former Companies Act 61 of 1973 (the 1973 Companies Act, or the Companies Act of 1973) and the Close Corporations Act 69 of 1984 contain chapters that dealt with the winding-up (or liquidation) of companies and close corporations respectively. These provisions were however not complete, and in relation to insolvent companies or close corporations, certain sections of these Acts made certain provisions of the Insolvency Act of 1936 as well as South African common law provisions applicable to the liquidation or winding-up of companies or close corporations that were unable to pay their debts. The 1973 Companies Act was however replaced by the Companies Act 71 of 2008 as from 1 May 2011 (the 2008 Companies Act, or the Companies Act of 2008). At this point that the 2008 Companies Act does not provide comprehensively for the winding-up of companies and that it has set a process in motion to phase out the close corporations as a business form. A new business rescue procedure has however been introduced by the 2008 Companies Act that has replaced judicial management of the 1973 Companies Act as a formal rescue procedure. (See Boraine Elements of Bankruptcy law and Business Rescue in South Africa 2015). What are the main changes that have been made to your insolvency law? The Insolvency Act of 1936 remains applicable to insolvency law matters. South African Law Commission and the Standing Advisory Committee on Company Law made proposals to the Department of Justice and Constitutional Development for uniform legislation that deals with all corporate and individual insolvencies. It is impossible to predict when this new legislation will come into force. The new legislation regulating business rescue proceedings is contained in Chapter 6 of the 2008 Companies Act. On the basis that the Act became operative in South African law on 1 May 2011, business rescue legislation in South Africa is still in its infancy having been around for just over 6 years. There are at this stage no formal amendments that have been proposed to the business rescue provisions of the 2008 Act. The Companies and Intellectual Property Commission ("CIPC"), being the statutory entity responsible for the administration of business rescues in South Africa, has established a Business Rescue Liaison Committee (BRLC) consisting of various stakeholders, to

9 review the current business rescue landscape, consider the pitfalls in the legislation and propose reforms which may become necessary following the outcome of the research. A draft report setting out proposed amendments to the legislation has been circulated but is not yet in public domain. What specific challenges have you faced in implementing the law? During the consultation process surrounding the enactment of the 2008 Companies Act, the Department of Trade and Industry was made aware of proposals within the Department of Justice and Constitutional Development to develop uniform insolvency legislation which would possibly overlap and could conflict with the regime set out in the old Companies Act for dealing with and winding-up insolvent companies. As a consequence, the 2008 Act provides for transitional arrangements that retains Chapter 14 of the 1973 Act, on an interim basis until such time as any new uniform insolvency law may be enacted and brought into operation. As with any new legislation there are challenges in the interpretation of certain provisions in the 2008 Companies Act and as a result there has been a wave of litigation as practitioners; lawyers and the courts grapple with novel concepts and bad drafting. Practical issues in the business rescue process such as the implementation of the plan, post commencement finance, as well as the appointment and regulation of the business rescue practitioners have also proven to be stumbling blocks in the way to successful implementation. What would you like to see happen to address the implementation gap? The lack of proper implementation is often tied to ineffective legal and regulatory frameworks and lack of capacity building and development. Political will is also one of the key elements of successful law implementation and the inconsistencies in relation to procedures dealing with the administration of insolvent estates for individuals and companies highlight the importance of law reform in this area. In particular, regulation of the Insolvency industry by the introduction of new legislation will be welcomed and will improve standards of professional conduct and boost the image of the Insolvency industry in South Africa. Any legislation can suffer an implementation gap when its provisions are overly complicated, conflicting, or unclear. It is therefore also necessary that the initiative by CIPC to propose certain amendments to provisions in the 2008 Companies Act should enjoy high priority. How has your new law regulated the insolvency profession? Section 138 of the Companies Act 2008 states that in order to qualify for appointment as a business rescue practitioner, an individual or individuals have to be a member in good standing of a legal, accounting or business management profession accredited by the Commission. The section thus presupposes membership to a pre-existing profession and thereafter adds the requirement of accreditation. Previously CIPC issued conditional licenses to business rescue practitioners and the experience of the applicant as well as the size of the company were factors taken into account. Recently a notice was issued by CIPC stating that only professional bodies recognized by the South African Qualification Authority (SAQA) will be accredited by CIPC and practitioners were advised to belong to a legal; accounting or business management profession recognized by SAQA. Henceforth all members belonging to these bodies will be licensed through their bodies and only those that do not belong to any recognized body may apply directly to the Commission and they will be conditionally licensed. (See notice 49 of 2017).

10 At present the appointment of insolvency practitioners in terms of the Insolvency Act is also under scrutiny since affirmative action practices to allow more Previously Disadvantaged Individuals (PDI s) to act as such, plays a role in the appointment of trustees and liquidators. During February 2014, following the adoption by the Minister of a new Policy, the Western Cape High Court in The South African Restructuring and Insolvency Practitioners Association v The Minister of Justice and Constitutional Development (4314/2014) [214] WCC (13 January 2015) declared the policy unconstitutional. The Minister and the Chief Master s appeal were also unsuccessful and the matter will now be heard in the Constitutional Court on the 2 nd of November. The Office of the Chief Master advises that legislation to regulate the profession is presently being considered; however, there is no indication as to when such legislation will be enacted. If you have statistics regarding the number of insolvency cases for the past few years, please provide. See Appendix B. When was your insolvency law passed? Sudan The law which governs insolvency in the Sudan is found in three different legislations; namely: The Bankruptcy Act 1929, the Civil Procedures Act 1983 and the Companies Act Insolvency cases are considered through the Civil Procedure Act of 1983, in respect of enforcement procedures. Where a court order to pay money and the judgment debtor is not able to pay, and he has no movables to be sold, the court may issue an order to hold him in detention until the execution amount granted by the court ruling is paid. He shall be released only if he has pays such amount or if the creditor person waives the amount or if the debtor proves in evidence that he is insolvent. The Bankruptcy Act 1929 defines the act of bankruptcy committed by a person whether natural or legal entity, and provides for the rules and procedures applicable in cases of bankruptcy. The first law governing company was enacted in 1925 and continued to be in force until 2015 when a new company legislation was promulgated. One of the reasons stipulated by the Companies Act to liquidate the company is the company's inability to pay its debts. What are the main changes that have been made to your insolvency law? Certain changes were made when the new company law was issued. The liquidation of the company and other materials were included based on the defects that emerged when the application took place. There is currently a legal reform process taking place in the country. The proposed amendments include insolvency law, notably the repeal of the provision concerning detention of insolvent debtor. What specific challenges have you faced in implementing the law? The challenges facing the application of these laws: Bankruptcy Law is an old law that requires many of its articles to be updated and detailed in order to be in line with modern economic and commercial development.

11 The lack of a precise definition led to confusion between bankruptcy, which is in commercial transactions and insolvency, which is in certain other civil liabilities. What would you like to see happen to address the implementation gap? I believe that application and legislation should be in one side to avoid shortcomings of the legislation or lack that appeared in application. Judicial precedents should be given special consideration as a source of law, especially as the cases of insolvency have become steadily increasing. How has your new law regulated the insolvency profession? As I mentioned there are many precedents resulted from the practice of various laws and became rules to be applied in the absence of legislative provision. Recently, after the establishment of the Khartoum Commercial Court in 2002, which dealt with bankruptcy cases, there has been an increase in bankruptcy cases. The Court has put a number of rules in place which lead to the decrease of the number of cases. However, in civil courts in cases of enforcement there is a clear increase in cases of insolvency. In most cases the debtor is unable to prove his insolvency before the court or to explain where the creditors' money has gone, so he will remain in detention until the payment of the amount due. The Zakat Chamber contributes significantly to assisting those insolvent who are detained in prison, in securing payment of their debts, and has a fixed item to pay for debtors. When was your insolvency law passed? Uganda The Insolvency Act of Uganda was passed in 2011 and came into effect on the 1 st July The Act provides for receiverships, administrations, liquidations, arrangements, bankruptcy, regulation of insolvency practitioners and cross border insolvency. It also amended and consolidated the laws relating to receiverships, administration, liquidation, arrangements and bankruptcy into one Law. This law provides an orderly process for the reorganisation or liquidation of insolvent entities/persons in a collective manner ensuring that when businesses/individuals face financial difficulties, mechanisms are available to either rescue them. What are the main changes that have been made to your insolvency law? Although no amendments have been made to the principal Act, a number of initiatives have been taken to operationalise the insolvency Act by way of subsidiary Legislation. a) Insolvency Practitioners Regulations, No.55 of 2017: These Regulations were passed in June 2017 by the Minister of Justice and Constitutional Affairs. They provide for registration of Insolvency Practitioners with the Official Receiver and provide for their code of conduct. All insolvency practitioners are required to register with the Official Receiver who maintains a register of insolvency practitioners. The certificate of registration is renewed yearly and the IP is required to file annual returns of all cases he/she has handled throughout the year. b) Insolvency Investigation and Prosecution Regulations, 2017; In the course of implementing the Insolvency Act and the Regulations, the official receiver noted the need for further Regulations to guide the investigation and prosecution of directors, shareholders,

12 contributories, all present and past officers of an insolvent company, the insolvency practitioners and any person for offences committed under the Act. The Official Receiver thus held consultative meetings with different stakeholders including Insolvency Practitioners, Directorate of Public Prosecutions [being the organ of government with the constitutional mandate to prosecute criminal cases], Uganda Police [organ of government with constitutional powers to effect arrests and conduct criminal investigations] and produced the final draft which is before the Minister of Justice and Constitutional Affairs for signature and passing. c) Amendment of Insolvency Fees Regulations: These regulations prescribe fees that are payable pursuant to the Insolvency Act 2011 and Insolvency Practitioners Regulations The final draft of the revised Regulations was submitted to the Honourable Minister of Justice and Constitutional Affairs for passing. d) Cross Border Insolvency Rules: Uganda adopted the UNCITRAL Model Law. The Chief Justice in consultation with the Minister is mandated to make Cross Border Insolvency rules to regulate multi- jurisdiction insolvency proceedings in Uganda. The draft Regulations were reviewed, approved by the Chief Justice s Rules Committee and submitted to the Honourable Minister of Justice and Constitutional Affairs for passing. What specific challenges have you faced in implementing the law? 1. Lack of enabling Regulations to implement certain provisions of the Act. We have handled this challenge by closely engaging First Parliamentary Counsel and fast tracking the passing of the regulations. 2. Ugandan courts have a reputation for slow dispensation of justice where judgments take up to several months and in some cases years due to insufficient manpower and skill set to handle complex commercial cases. This affects the return to creditors especially in cases where the debtor has perishable goods. Solution: Uganda opened its first Commercial Court in 1996 to deliver an efficient, expeditious, and cost-effective mode of adjudicating commercial disputes. Most of insolvency proceedings are handled by either the Civil or Commercial Division of the High Court. The Official Receiver as the Regulator of Insolvency Practice has shifted focus on capacity building of judges and practitioners through training to improve their skills to handle insolvency matters. Between the dates of 14 th - 18 th November 2016, the Official Receiver organized the Insolvency Week under the theme; Enhancing Stakeholder Awareness on Insolvency. The week-long activities involved the Official Receiver s Forum that attracted the Official Receiver of Uganda, Kenya and Tanzania, representatives from Law Reform Commission of Kenya and Tanzania and Insolvency Practitioners to a round table discussion focusing on the readiness of the East African Community to handle Cross Border Insolvencies. There was a Judges Colloquium facilitated by Hon. Justice Elizabeth Stong (U.S), Hon. Mr. Justice Alastair Norris (UK), Mr. Russell Downs (PWC-UK), Mr. Muniu Thoithi (PWC-Kenya) and Mr. Kabiito Karamagi, (Ligomarc Advocates Uganda). The participants included insolvency practitioners, judges of the High Court (Commercial and Civil Divisions) as well as Registrars in those Courts were trained on the tools of debt restructuring. 3. High costs involved in the insolvency proceedings that affect the return to creditors.

13 4. Preference of debtors to liquidation as opposed to business rescue mechanisms. What would you like to see happen to address the implementation gap? In all this, an effective insolvency system cannot be sound without the enabling or implementing infrastructures. The key players and cornerstones in any insolvency system consist of the Regulator who over sees all insolvency proceedings, Insolvency Practitioners who act on behalf of the debtor/creditors in insolvency proceedings and, Courts of law which administer justice in the process. We look forward to; Strengthening of the Legal, Policy and Institutional Framework of the Official Receiver office to effectively handle his mandate under the insolvency Act. International Co-operation and Partnerships with different insolvency regulators as well as international courts in matters of cross border insolvencies so as to learn from their success stories. Capacity building of all key players to effectively handle insolvency matters. Amendments to the insolvency Act to cover issues relating to reducing the cost and duration attached to insolvency proceedings. Sensitisation drives to the public on the benefits of business rescue mechanisms as opposed to liquidation. How has your new law regulated the insolvency profession? Regulation of insolvency practice in Uganda is a fairly new phenomenon. Before 2011, the official Receiver had no regulatory powers over I.Ps. issues of misconduct were never really addressed for lack of a clear forum as legal framework did not provide for qualifications of IP. With the enactment of the Insolvency Act, 1. The law widened the powers to the Official Receiver to include the regulation of Insolvency Practitioners. The official Receiver is now the Regulator of Regulators with powers to; Investigate the conduct of insolvency practitioners and to prosecute them for any offences committed; Act during a vacancy in the office of an insolvency practitioner; Receive and review reports on the conduct insolvency matters; Impose fines for non-compliance with the statutory requirements. 2. The new law also saw the professionalization of the insolvency profession. For one to act as an insolvency practitioner, one needs to be qualified as a lawyer, accountant or chartered secretary who is registered member of their professional body and must have security or professional indemnity for the proper performance of his or her duties.

14 If you have statistics regarding the number of insolvency cases for the past few years, please provide. WORKLOAD TRENDS AND STATISTICS FINANCIAL YEAR 2016/2017 Mode QTR1 QTR2 QTR3 QTR4 TOTAL Members Voluntary Winding up Certificates of Security Receiverships Companies Liquidated Administration Bankruptcy Creditor Claims Settled The above table denotes the first ever first ever administration case in Uganda, Uganda Telecom Limited (UTL). The company was placed in administration on May 22, 2017 and the Official Receiver appointed as administrator to supervise the implementation of the administration deed for a moratorium period of six months. The company had liabilities estimated at over UGX 709bn (approximately. USD 197m) against an estimated asset value of UGX 148bn (approximately USD 41m). An administrator was thus appointed to return the company to profitability and settle of claims of creditors. Since the commencement of the Administration process in May 2017, the company has registered tremendous success, including improving network availability by 15%, reduction in the wage bill by 27% and growth in the company s revenue and debt collections. When was your insolvency law passed? Zambia The Companies Act, Chapter 388 of the Laws of Zambia, which was enacted in 1994, provides a framework for corporate insolvency. The Act generally provides for receivership and winding-up of companies What are the main changes that have been made to your insolvency law? The current law on insolvency has not been changed. However, a Corporate Insolvency Bill, 2017 has been introduced before the National Assembly of Zambia for consideration and is likely to become law What specific challenges have you faced in implementing the law? The corporate insolvency framework under the Companies Act, which is largely based on Common Law, is not comprehensive to address the latest trends in corporate insolvency Key challenges include Absence of qualifications for insolvency practitioners Lack of accountability by insolvency practitioners

15 Absence of timelines for submission of information such as statement of affairs Inability, in most cases, by insolvency practitioners to salvage a company placed under receivership, with insolvency practitioners seemingly benefiting from the process. Most of the companies end up in liquidation Delays in concluding receivership proceedings by Courts often occasioned by delays in submission of information required What would you like to see happen to address the implementation gap? N/A How has your new law regulated the insolvency profession? The proposed Corporate Insolvency Bill, 2017 has not yet been promulgated However, the objects of the Bill are to provide for Corporate receiverships, appointment of receivers and the duties and responsibility of receivers Business rescue, business rescue proceedings and plans and appointment of business rescue administrators Schemes of arrangement with creditors Insolvency practitioners qualifications, duties and responsibilities Cross border insolvency If you have statistics regarding the number of insolvency cases for the past few years, please provide. The information which is attached relates to actual insolvency records before the regulatory agency, Patents and Companies Registration Agency of Zambia. The Judiciary would be in a better position to provide information on number of insolvency cases before the Courts of Law. See Appendix C When was your insolvency law passed? Zimbabwe The insolvency legal framework in Zimbabwe is currently fragmented with some provisions in the Insolvency Act, the Companies Act and the Administration of Estates Act. Zimbabwe has embarked on insolvency law reform with technical assistance from the World Bank Group. An Insolvency Bill is currently before Parliament and await gazetting. What are the main changes that have been made to your insolvency law? The insolvency law will consolidate the legal framework and cover corporations and individuals. The judicial management law is being reviewed so that it can move to business rescue, which is more positive and enables the resuscitation of business. The revised legislation will focus on developing a regime for out of court workouts, an approach that will keep potentially viable, but distressed businesses alive instead of

16 liquidation. This would enable creditors to recover part or all of what they would be owed, preserve jobs and sustain customers and the supplier network. The reforms also seek to introduce registration of insolvency practitioners, code of conduct for insolvency practitioners, practical training for insolvency practitioners, and capacity building for the Master of High Court office. In recent years, many creditors failed to recover substantial amounts when the companies owing them were either placed under judicial management due to the lengthy judicial management processes which led to deterioration in the institution s asset base against high administration fees. What specific challenges have you faced in implementing the law? The law is not yet in place. What would you like to see happen to address the implementation gap? The law is not yet in place. How has your new law regulated the insolvency profession? The proposed legal reforms seek registration of insolvency practitioners, practical training for insolvency practitioners, and capacity building for the Master of High Court office. If you have statistics regarding the number of insolvency cases for the past few years, please provide. Not available

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20 APPENDIX B STATISTICAL RELEASE P0043 Statistics of liquidations and insolvencies (Preliminary) August 2017 Embargoed until: 26 September :30 ENQUIRIES: FORTHCOMING ISSUE: EXPECTED RELEASE DATE: Juan-Pierre Terblanche September October info@statssa.gov.za T F Private Bag X44, Pretoria, 0001, South Africa ISIbalo House, Koch Street, Salvokop, Pretoria, 0002

21 STATISTICS SOUTH AFRICA 1 P0043 Contents Liquidations: results for August Table A Number of liquidations... 2 Figure 1 Number of liquidations... 2 Insolvencies: results for July Table B Number of insolvencies... 3 Figure 2 Number of insolvencies... 3 Tables... 4 Table 1 Total liquidations according to industry (number)... 4 Table 1.1 Liquidations of companies according to industry (number)... 4 Table 1.2 Liquidations of close corporations according to industry (number)... 4 Table 2 Total liquidations (number)... 5 Table 2.1 Compulsory liquidations (number)... 5 Table 2.2 Voluntary liquidations (number)... 5 Table 3.1 Compulsory liquidations of companies (number)... 6 Table 3.2 Voluntary liquidations of companies (number)... 6 Table 4 Total liquidations of close corporations (number)... 7 Table 4.1 Compulsory liquidations of close corporations (number)... 7 Table 4.2 Voluntary liquidations of close corporations (number)... 7 Table 5 Insolvencies of individuals and partnerships (number)... 8 Table 6 Seasonally adjusted number of insolvencies... 8 Explanatory notes... 9 Glossary... 9 Technical enquiries General information Statistics of liquidations and insolvencies, August 2017

22 STATISTICS SOUTH AFRICA 2 P0043 Liquidations: results for August 2017 Table A Number of liquidations Number of liquidations August 2017 % change between August 2016 and August 2017 % change between June to August 2016 and June to August 2017 % change between January to August 2016 and January to August ,1-5,5-10,4 The total number of liquidations showed a decrease of 1,1% in August 2017 compared with August Voluntary liquidations decreased by 14 cases while compulsory liquidations increased by 12 cases. Table 1 shows liquidations by industry. Six out of the ten industries decreased year-on-year with financing, insurance, real estate and business services showing the largest decrease from 72 to 49 (23 fewer liquidations). There was a decrease of 5,5% in the three months ended August 2017 compared with the three months ended August The total number of liquidations recorded for the first eight months of 2017 decreased by 10,4% compared with the first eight months of Figure 1 Number of liquidations Statistics of liquidations and insolvencies, August 2017

23 STATISTICS SOUTH AFRICA 3 P0043 Insolvencies: results for July 2017 Table B Number of insolvencies Number of insolvencies July 2017 % change between July 2016 and July 2017 % change between May to July 2016 and May to July 2017 % change between January to July 2016 and January to July ,7 6,0-8,5 The estimated number of insolvencies increased by 13,7% year-on-year in July A 6,0% increase was estimated in the three months ended July 2017 compared with the three months ended July 2016 see Table 5. Seasonally adjusted insolvencies increased by 4,1% in July 2017 compared with June This followed monthon-month changes of 18,1% in June 2017 and -1,4% in May 2017 see Table 6. Figure 2 Number of insolvencies PJ Lehohla Statistician-General Statistics of liquidations and insolvencies, August 2017

24 STATISTICS SOUTH AFRICA 4 P0043 Tables Table 1 Total liquidations according to industry (number) Industry January August 2017 August 2016 July 2017 August 2017 C V Total C V Total C V Total C V Total 1.Agriculture, hunting, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Trade, catering and accommodation Transport, storage, communication Financing, insurance, real estate, business services Community, social, personal services Unclassified Total number of liquidations Table 1.1 Liquidations of companies according to industry (number) Industry January August 2017 August 2016 July 2017 August 2017 C V Total C V Total C V Total C V Total 1.Agriculture, hunting, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Trade, catering and accommodation Transport, storage, communication Financing, insurance, real estate, business services Community, social, personal services Unclassified Total number of liquidations Table 1.2 Liquidations of close corporations according to industry (number) Industry January August 2017 August 2016 July 2017 August 2017 C V Total C V Total C V Total C V Total 1.Agriculture, hunting, forestry and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction Trade, catering and accommodation Transport, storage, communication Financing, insurance, real estate, business services Community, social, personal services Unclassified Total number of liquidations C = Compulsory. V = Voluntary. Statistics of liquidations and insolvencies, August 2017

25 STATISTICS SOUTH AFRICA 5 P0043 Table 2 Total liquidations (number) Month January February March April May June July August September October November December Total Table 2.1 Compulsory liquidations (number) Month January February March April May June July August September October November December Total Table 2.2 Voluntary liquidations (number) Month January February March April May June July August September October November December Total Statistics of liquidations and insolvencies, August 2017

26 STATISTICS SOUTH AFRICA 6 P0043 Table 3 Total liquidations of companies (number) Month January February March April May June July August September October November December Total Table 3.1 Compulsory liquidations of companies (number) Month January February March April May June July August September October November December Total Table 3.2 Voluntary liquidations of companies (number) Month January February March April May June July August September October November December Total Statistics of liquidations and insolvencies, August 2017