KUALA LUMPUR: The proposed corporatisation of the Insolvency Department should focus on monetisation through liquidation of bankrupt companies, rather than individual bankrupts, said an expert.

Putra Business School economic analyst Associate Prof Dr Ahmed Razman Abdul Latiff said this could be achieved by speeding up the process of winding up corporations for the revenue generated "to go back into the market".

"On the other hand, cases involving bankrupt individuals should be emphasised in enabling them to be released from the status and pay their debt obligations on a structured basis.

"My hope is that the insolvency corporation includes social concerns in its agenda, so that bankrupt individuals won't have to sell their houses to settle their debts, for instance," he said.

He added that the move was inevitable, given that the government was looking to streamline its expenditure by corporatising some of its agencies.

Ahmed Razman said the corporatised insolvency body should be managed by professionals and without the involvement of politicians.

"This is also in line with the Finance Ministry's principle on political appointees.

"Most of the failed entities were due to poor governance and active involvement of politicians, so this is a factor that should be considered as well," he said.  

Meanwhile, economic analyst associate professor Dr Aimi Zulhazmi Abdul Rashid said a feasibility study on the proposed corporatising of the Insolvency Department should involve gathering input from all stakeholders without prejudice.

He said the expectations from stakeholders must be balanced with the needs of the government, hence creating buy-in from the public to support the new initiative.

"In a new set-up like this, the normal question is what would be a good business model; if there will be revenue generation, what will be the impact on the public?

"We do expect faster and more effective operations, as well as better initiatives from the new set-up without any additional cost to the public," he told the New Straits Times.

Minister in the Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Said was reported as saying that corporatisation of the Insolvency Department may take place as early as next year, with a feasibility study to be conducted.

https://www.nst.com.my/news/nation/2024/07/1082471/corporatisation-insolvency-dept-should-take-socially-conscious-approach