MPs propose amendment to curb ‘fake insolvencies’

FISHERIES Minister Abraham Iyambo and DTA MP McHenry Venaani have called for a new insolvency law, claiming that companies are winding up and retrenching workers, only to start up new ventures under new names.

“Some of these liquidation moves are fake and deliberate,” charged Iyambo. “Some just liquidate apparently to start afresh on a clean slate.”Speaking during debate on proposed amendments to the Insolvency Act, now 69 years old, Venaani and Iyambo agreed that especially fishing companies were exploiting the law and disadvantaging the labour industry in the process.Venaani said legislation on the winding-up of companies had to be amended to protect the interests of workers who, more often than not, were on the losing end of the insolvency process.”I fear that people with shrewd and fertile minds have found loopholes and are abusing the aged Insolvency Act.Many of our business entities and professional people have been facing unabated liquidations,” added Iyambo.Iyambo said liquidation had become “fashionable”, a “money-making” saga and used by those who had made bad business moves to cover themselves.The amendments proposed to the Insolvency Act of 1936 are to replace outdated laws, some of which have been repealed and others colonial legislation that was never applicable in Namibia.The current Act also makes direct references to amounts which, given changes in the inflation rate, need to be changed.The amendments also seek to bring the Act in line with the Constitution, especially as it relates to giving the insolvent party the right to appeal against a decision of the Master of the Court, and also for the Master to provide reasons for his or her decisions.Iyambo told the House that liquidations, whether big or not, inevitably led to economic problems of unemployment and poverty.”In the event of provisional or full liquidation, the innocent employees are the main victims and in most cases at the mercy of the liquidator, and the company being liquidated or a successor or buyer.Workers have no say.Their hard-earned benefits are uncertain and not adequately protected in case of liquidation,” said Iyambo in defence of the labour force.He wanted to know from the Justice Ministry whether the amendments would have an impact on the liquidation of big companies or only on the estates of private persons.Venaani said while he was not taking the part of the defaulters, in cases involving individuals, legislation had to be made that would prevent the aggrieved party from attaching basic commodities.”Some just liquidate apparently to start afresh on a clean slate.”Speaking during debate on proposed amendments to the Insolvency Act, now 69 years old, Venaani and Iyambo agreed that especially fishing companies were exploiting the law and disadvantaging the labour industry in the process.Venaani said legislation on the winding-up of companies had to be amended to protect the interests of workers who, more often than not, were on the losing end of the insolvency process.”I fear that people with shrewd and fertile minds have found loopholes and are abusing the aged Insolvency Act.Many of our business entities and professional people have been facing unabated liquidations,” added Iyambo.Iyambo said liquidation had become “fashionable”, a “money-making” saga and used by those who had made bad business moves to cover themselves.The amendments proposed to the Insolvency Act of 1936 are to replace outdated laws, some of which have been repealed and others colonial legislation that was never applicable in Namibia.The current Act also makes direct references to amounts which, given changes in the inflation rate, need to be changed.The amendments also seek to bring the Act in line with the Constitution, especially as it relates to giving the insolvent party the right to appeal against a decision of the Master of the Court, and also for the Master to provide reasons for his or her decisions.Iyambo told the House that liquidations, whether big or not, inevitably led to economic problems of unemployment and poverty.”In the event of provisional or full liquidation, the innocent employees are the main victims and in most cases at the mercy of the liquidator, and the company being liquidated or a successor or buyer.Workers have no say.Their hard-earned benefits are uncertain and not adequately protected in case of liquidation,” said Iyambo in defence of the labour force.He wanted to know from the Justice Ministry whether the amendments would have an impact on the liquidation of big companies or only on the estates of private persons.Venaani said while he was not taking the part of the defaulters, in cases involving individuals, legislation had to be made that would prevent the aggrieved party from attaching basic commodities.