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29 March 2024

Ministry says bankruptcy law ready

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By Staff

The ministry of finance has prepared a draft bankruptcy law that will allow for bailing out financially troubled companies in the country, including pubic establishments, its undersecretary was reported on Thursday as saying.

Younus Khoury said the bill on “financial re-organization and bankruptcy” would soon be submitted to the ministry of justice for study before it is presented to the competent authorities for endorsement.

He said the law had been drafted following what he described as a comprehensive study conducted by the ministry of finance on the UAE’s financial sector and the need to revise some rules in this sector.

“This law will also cover government-owned companies for the first time…it is based on the need to find an integrated legal framework for corporate bankruptcies and restructuring that will allow these companies to stand on their feet again and return to normal business,” he told local newspapers.

He said the law would cover all companies and individuals in most sectors, adding that it would allow for bailing out any troubled firm in coordination with all relevant parties including lenders and borrowers. He added that the new law would not affect companies operating in free zones in the UAE.

“This law will improve the process of debt repayment, facilitate restructuring of companies and open the door for borrowing from banks to revive faltering business under specific terms,” he said.

“It will include a number of procedures and methods that will guarantee the rights of borrowers and lenders in default cases.”