The Minister of Justice, Legal and Parliamentary Affairs Emmerson Mnangagwa says the country needs to correct the discord between the work of Insolvency Practitioners, and that of the Master of the High Court, in order to promote the ease of doing business in the country.
An insolvency practitioner (IP) carries out a wide range of duties in relation to insolvent individuals and companies. Depending on the insolvency procedure they may be required to negotiate with creditors with a view to rescuing the business, or at the other extreme, take over complete control of the company prior to closing it down.
Presenting the Bill for the second reading in parliament recently, Mnangagwa said the resolution of insolvency cases is one of the key factors crucial to the effective and efficient running of business enterprises.
He said the problem with the current legislation governing the resolution of insolvency cases is that it is fragmented and scattered in several pieces of legislation and that is affecting the resolution of such cases in time.
“There is, also, duplication of duties between the Council of Estate Administrators and the Master of the High Court, thereby prolonging the process of resolving insolvency matters,” he said.
The minister of Justice said the nation’s thrust towards economic growth through the ease of doing business initiative is firmly anchored on an efficient justice delivery system insofar as the resolution of commercial and business matters is concerned.
The amendments have seen new clauses factored in; with Clauses 5 and 7 seek to amend the principal Act by broadening the scope of the Act to include the IPs’ registration by the Council of Estate Administrators and prohibition of practicing without a practicing certificate, respectively.
Clause 6 seek sets the new qualifications for IPs and to provide for the registration and de-registration of insolvency practitioners, with clause 8 inserting a new section to provide for the renewal procedures for the practicing certificate for IPs, and grounds upon which the application of the practicing certificate may be rejected.
The provisions on the renewal of the practicing certificate of the Insolvency Practitioner will help to ensure that only competent persons are granted practicing certificates and, as such, remain in the Register of Insolvency Practitioners.
Mnangagwa said the annual renewal of the practicing certificate of the IPs will provide checks and balances to their functions, and that clause 9 will provide for the application of provisions on the disciplinary powers of the Council to IP, whilst clause 12 will provide for the promulgation of the code of ethics for IPs to enhance the professional and competent performance of his or her duties.
“This will ultimately not only improve the effective administration of justice in the country, but also contribute to the ease of doing business campaign,” he said.
The amendment Bill has dealt extensively with the challenges inherent in the resolution of insolvency cases in this country.
He said in order to enhance transparency, efficiency, and accountability the Register of Insolvency shall be open to the public, and any interested persons can inspect the register and if they so desire, make copies thereof.
The Master of the High Court will be given a copy of the Register of Insolvency Practitioners every year.
The new provisions seek to ensure that IPs are people of high professional standard, and be registered legal practitioners, like registered accountants and auditors and members of the Institute of Chartered Secretaries and Administrators in Zimbabwe are specified as eligible for provisional registration as IPs.
As the nation is facing economic challenges, many companies in the country are falling into insolvency situation, with others closing shop.