Stating that recently enforced Company and Insolvency Acts contradicted some clauses of Nepal Rastra Bank’s guidelines pertaining to blacklisting, businessmen and legal professionals have urged the government to remove the inconsistencies.
Speaking at an interaction in the capital on Tuesday jointly organized by FNCCI and Corporate Financial Governance, Judge at the Appellate Court Patan, Keshari Raj Pandey called for the establishment of Insolvency Administration Office and development of necessary human resources for the proper enforcement of the law.
“Insolvency law provides a way out when the total liabilities of an individual or enterprise exceed the total assets so that the claims of the creditors cannot be met,” he added.
He further said that it discharges the debtor from the burdensome debts and allows him to make a fresh start.
Drafter of insolvency law, advocate Bharat Raj Uprety urged the government to set up commerce benches at the court of law.
He said that the instrument of blacklisting would discourage investment in the long run. “The government should instead put in place an institutional mechanism as early as possible for the implementation and enforcement of Insolvency Act,” he added.
FNCCI Chairman Chandi Raj Dhakal, however, said that Insolvency Act alone will not rescue the ailing industries unless political stability and good governance were established.
Dhakal however said that the Insolvency Act could come into use even when the company was in profit. “It has also opened ways for restructuring businesses through mergers and acquisitions to enhance their competitive strength,” he added.