• Dr Adu Anane Antwi, former Director General of the SEC receiving his certificate from Justice Sophia Akuffo, Board Chair of GARIA

Prioritise saving distressed companies — Attorney General

Daily Graphic Mar - 21 - 2023 , 07:01

The Attorney General and Minister of Justice, Godfred Yeboah Dame, has encouraged licensed Insolvency Practitioners (IPs) to prioritise saving distressed companies, emphasising that the hasty winding down of firms that have the potential to be revived could harm growth of the private sector.

In an address, he stated that the primary objective, when dealing with struggling businesses, should not be liquidation, but efforts should be made to rescue and preserve distressed viable companies whenever possible, considering the impact on employment and other factors.

The minister's remarks were delivered by his deputy, Alfred Tuah-Yeboah, at the induction ceremony for the second cohort of insolvency practitioners organised by the Ghana Association of Restructuring and Insolvency Advisors (GARIA).

“Where a business can be saved by restructuring, every effort should be made by skilled professionals to save it by restructuring it, therefore there is now the need to encourage lawyers, accountants, and bankers to take an interest in the restructuring profession,” Mr Yeboah Dame said.

Well-trained practitioners

Furthermore, he expressed his belief that the expertise of well-trained insolvency practitioners would be highly sought after, given the current global economic conditions and the growing complexity of the business environment.

In a speech delivered by the Bank of Ghana's (BoG) Head of Resolution Office, Elliot Amoako, on behalf of the Governor, Mr Amoako said although the BoG operated in a specialised segment, the bank would not hesitate to seek the assistance of licensed insolvency practitioners if the need arose.

"I want to stress that the resolution of banks and SDIs is subject to the special resolution regime established for Banks and SDIs under Act 930.

The Bank of Ghana however will not hesitate to rely on licensed professionals of the Ghana Association of Restructuring and Insolvency Advisors (GARIA) in the event of any future occurrences".

Induction

At the event which saw the induction of over 160 members to the institution's roll of licensed IPs, the Registrar of Companies, Jemima Oware, reiterated the need for inter-agency collaboration across the financial spectrum – banking, accounting, taxation, insurance and securities – as well as with the judiciary to promote efficiency in the application of the Corporate Insolvency and Restructuring Act (CIRA).

“It is going to offer greater ability to respond to the local needs of distressed companies, address crossover problems, and will clarify and improve the role and definition of each of these agencies, especially when creditors and other claimants initiate a charge against a distressed company,” she explained, while pledging her support for training and related activities.

She stated that the review of the CIRA Regulations was ongoing, as the Legal Committee of the Registrar of Companies had requested additional work from the consultant.

She confirmed that moves were underway to finalise and approve the strategy document adding that “Once accepted, the plan is to have the ORC self-financing to carry out its mandate, which includes the establishment of an Insolvency Service Division”.

Broader objective

The CEO of GARIA, George Fosu, explained that the induction ceremony was part of the association's broader objective to equip IPs with the essential core competencies required to assist businesses and organisations.

He emphasised that current training and education of insolvency practitioners needed improvement, particularly in terms of business modelling, strategy and corporate balance sheet restructuring.

Additionally, Mr Fosu noted that the ceremony aimed to raise awareness among businesses across the country of the availability of specialised professionals who could provide assistance, particularly in the current challenging economic climate.

A former Chief Justice, Sophia Akuffo, who chaired the ceremony, commended the inductees for their perseverance and diligence in reaching this milestone.
She also advised practitioners to maintain strong morals and values as those were the pillars of success in their respective fields.

She emphasised that the character of an insolvency practitioner was important to the stakeholders they represented, as effective institutions were built on well-rooted value systems.

Last year, during its first induction event, GARIA admitted 108 licensed insolvency practitioners into the profession of insolvency in Ghana.

Working in partnership with the Registrar of Companies and the Attorney General's Department, the association has now inducted over 270 IPs into the profession.