SINGAPORE - Singapore should strengthen its legal framework in the areas of insolvency and debt restructuring in order to boost its attractiveness as a global business hub.
That is according to top lawyers here who spoke at the National Insolvency Conference held at the Supreme Court on Tuesday.
Giving the keynote address, senior counsel Lee Eng Beng said the legal regime here should be fine-tuned to better tackle cross-border insolvency cases. This assumes greater urgency as Singapore stands to benefit from the creation of the Asean Economic Community by 2015, which will lead to greater intra-regional trade flows.
While noting that the judiciary here has high international standards for quality, efficiency and effectiveness, the managing partner of Rajah & Tann said in the area of cross-border insolvency, there are "some fundamental issues" that need to be addressed.
Mr Lee said the current insolvency regime "looks a bit outdated and disorganised on paper".
For instance, the liquidation laws here are based on the British Companies Act of 1948 while parts of the receivership regime here are based on Australian legislation that is no longer applicable Down Under, he said.
Another pressing issue that Mr Lee observed is the lack of growth in the number and quality of top restructuring as well as insolvency professionals here.
"We have to move up the food chain, get the sexiest regional debt restructuring deals into Singapore, and break the vicious circle," he said.
Speaking at the same event, the president of the Law Society of Singapore, senior counsel Lok Vi Ming, said it is important that Singapore aims to make its insolvency laws "clear" in order to maintain its position as a business hub. "If our laws do not continue to be effective, it could deter people from investing in Singapore," he added.
To that end, Mr Lok said a committee set up to review the bankruptcy and insolvency laws here will finalise its report soon.
In March, Law Minister K. Shanmugam announced in Parliament that a committee has been commissioned to conduct the review. The aim of the review is to streamline and improve Singapore's bankruptcy and insolvency laws.
Mr Lok said Singapore's legal framework to deal with insolvency cases compares well with other countries. A recent World Bank report on doing businesses globally found that Singapore is the second easiest jurisdiction for resolution of insolvency cases. It is ranked behind only Japan.
The report took into consideration the time, cost and outcome of insolvency cases in 185 places. Singapore took 0.8 year to complete each case, much faster than the global average of 2.8 years.
Mr Lok said: "We are not sitting on our laurels when it comes to improving our insolvency regime."
The conference, which was organised by the Law Society of Singapore, attracted some 250 participants.
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