New leg­is­la­tion plan for busi­ness res­cue pro­fes­sion­als

The Star Early Edition - - NEWS - Joseph Booy­sen

BUSI­NESS res­cue pro­fes­sion­als would be re­quired to reg­is­ter with their var­i­ous pro­fes­sional bod­ies from Oc­to­ber, ac­cord­ing to new leg­is­la­tion.

Al­though rel­a­tively suc­cess­ful, busi­ness res­cue re­ceived crit­i­cism over ap­par­ent flaws in the ap­point­ment process and qual­ity of busi­ness res­cue prac­ti­tion­ers. As a re­sult from Oc­to­ber 1 changes to the le­gal frame­work and reg­u­la­tion of busi­ness res­cue, par­tic­u­larly to reg­is­tra­tion of prac­ti­tion­ers, would take ef­fect.

In or­der to as­sure com­pe­tence and efficiency, it has been widely agreed that the reg­u­la­tion of busi­ness res­cue prac­ti­tion­ers was im­por­tant in the preser­va­tion and in­tegrity of the busi­ness res­cue pro­ce­dure.

Cur­rently, busi­ness res­cue prac­ti­tion­ers have been granted an in­di­vid­ual li­cence by the Com­pa­nies In­tel­lec­tual Prop­erty Com­mis­sion (CIPC).

A re­cent no­tice is­sued by the CIPC in­formed of a No­tice of a Tran­si­tional Pe­riod of Con­di­tional Li­cences, from Oc­to­ber 1, prac­ti­tion­ers will be re­quired to reg­is­ter through their var­i­ous pro­fes­sional bod­ies such as The Law So­ci­ety of SA, the SA Re­struc­tur­ing and In­sol­vency Prac­ti­tion­ers As­so­ci­a­tion, the Char­tered In­sti­tute of Man­age­ment Ac­coun­tants and the SA

Prac­ti­tion­ers have been granted an in­di­vid­ual li­cence by the CIPC.

In­sti­tute of Char­tered Ac­coun­tants.

This will re­quire at­tor­neys, ac­coun­tants, liq­uida­tors and busi­ness man­age­ment pro­fes­sion­als who sought to prac­tice as busi­ness res­cue pro­fes­sion­als to reg­is­ter through their SA Qual­i­fi­ca­tions Author­ity (Saqa) ap­proved gov­ern­ing bod­ies. These pro­fes­sional bod­ies would be re­quired to ap­ply for ac­cred­i­ta­tion through CIPC, set­ting out that they com­plied with pro­fes­sional rules and dis­ci­plines in or­der to be able to ac­credit their own mem­bers.

Prac­ti­tion­ers as well as as­pir­ing prac­ti­tion­ers were ad­vised to be­long to a le­gal, ac­count­ing or busi­ness man­age­ment pro­fes­sion recog­nised by Saqa and pro­fes­sional bod­ies had un­til Oc­to­ber 1 to com­ply, af­ter which no per­son would be li­censed as a busi­ness res­cue prac­ti­tioner un­less he or she be­longed to the reg­is­tered and ac­cred­ited pro­fes­sion.

PJ Veld­huizen, the chief ex­ec­u­tive of Gil­lan and Veld­huizen, who is com­plet­ing a doc­tor­ate on reg­u­la­tion of busi­ness res­cue, has been in­stru­men­tal in the re­struc­ture and reg­u­la­tion of busi­ness res­cue in South Africa.

Veld­huizen said in or­der to mit­i­gate ar­bi­trage or ap­pli­cants opt­ing for a less strin­gent ac­cred­i­ta­tion process, stan­dard­i­s­a­tion of com­pli­ance was paramount.

He said that the CIPC board was fi­nal­is­ing a con­tin­ued pro­fes­sional de­vel­op­ment pro­gramme that would re­quire prac­ti­tion­ers to com­plete a pre­scribed num­ber of ver­i­fi­able hours train­ing by ac­cred­ited train­ers an­nu­ally.

“The re­spon­si­bil­ity of a busi­ness res­cue prac­ti­tioner is oner­ous. When ap­pointed, they ef­fec­tively take over the run­ning of a stressed com­pany and step into the shoes of the chief ex­ec­u­tive/board of directors. They are also of­fi­cers of the court and, there­fore, have the fidu­ciary duty of a di­rec­tor, this cer­tainly re­quires over­sight.”

Veld­huizen said the re­quire­ment that a com­pany un­der busi­ness res­cue needed to have a port of call in or­der to hold busi­ness res­cue prac­ti­tion­ers ac­count­able.

“Up un­til now dis­grun­tled par­ties were forced to turn to the courts for as­sis­tance, which can be a lengthy and ex­pen­sive process. Busi­ness res­cue prac­ti­tion­ers will now be bound by a pro­fes­sional dis­ci­plinary code.” – joseph.booy­

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