The Uganda Registration Service Bureau (URSB) has called for exploitation of all options to help collapsing firms to stand again instead of opting for liquidation and winding in cases of insolvent companies or individuals.
URSB made the call during the second Regional Insolvency week conference at Speke Resort Munyonyo in Kampala.
This year’s conference is being held under the theme ‘Business Rescue and Cross Border Insolvency: Defying Gravity with main focus on ‘A discussion on building efficient business rescue and cross border Insolvency practices in Uganda”
According to the Registrar General URSB, Bemanya Twebaze, the trend in Uganda has been of intolerance, stigmatization of entrepreneurs and companies that become victims of bankruptcy instead of supporting them.
He said that this trend must change because it does not create value for any stakeholders in insolvent cases.
“We must prioritize the tradition of business rescue to give chance to all businesses, because when businesses collapse, there are a lot of tears from employees and their dependants, the business owners and the economy at large. From now on, our focus is going to be on how we can help each struggling businesses to survive instead of rushing to close them down,” he said
Speaking at the event, the Principal Judge Justice Yorokamu Bamwiine who made a presentation on Insolvency cases in Uganda said there is need for specialisation of the high court to create a special division to handle these cases.
“This will allow speedy trials and allow extensive stakeholders engagement so that there is harmony on all sides before a business is winded down. This will also allow each case to be handled with priority” he said
The judge further questioned the manner in which some businesses in Uganda which collapsed in the past few years were handled, saying the regulators did not give chance to the businesses to resurrect and seemed to be in a hurry to finish the businesses off
“Before closing up a business, let us make sure that the business/person has exploited all options and failed. We can allow them to restructure and be recapitalized so that they can survive,” Bamwiine said
The 2nd Insolvency week conference saw a number of insolvency proceedings regulators, insolvency practitioners on behalf the debtors and creditors, courts of Law and business communities from the EAC region, discussing the requirements of a strong effective Insolvency system by providing a platform for all key stakeholders to meet and discuss critical issues.