ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue on Friday unanimously approved the draft of the Corporate Restructuring Companies Bill 2016.

A statement issued by the Securities and Exchange Commission of Pakistan (SECP) said the meeting was chaired by Member National Assembly, Qaiser Ahmad Sheikh.

The bill is aimed at establishing a new business regime under which corporate restructuring companies would be incorporated, licensed and regulated by the SECP.

It also aims to perform the business of acquisition, management, restructuring and resolution of ‘non-performing assets of financial institutions’ and restructuring, reorganisation, revival and liquidation of ‘commercially or financially distressed companies and their businesses’.

The bill provides the basic set-up for rehabilitation mechanism of sick units in the country and to put the corporate economy on fast track.

The SECP drafted the bill after extensive consultations with relevant stakeholders including the State Bank of Pakistan (SBP), Pakistan Banks Association, business groups and legal experts.

The committee noted that there was a need to introduce a comprehensive legal framework to address the rehabilitation issues of distressed businesses in Pakis­tan, develop and promulgate a comprehensive corporate rehabilitation regime.

The committee was informed the existing institutional arrangements and legal process for revival and rehabilitation of potentially viable companies are both inadequate and time consuming.

Efforts in the past were made largely on creditor-friendly laws which resulted in a serious imbalance of legal remedies between creditors and debtors, the statement added.

A Banking Law Review Commission (BLRC) constituted in 2001 had emphasised the need for developing a progressive law for the revival of companies facing financial crisis.

Published in Dawn, March 5th, 2016