Fearing abuse, AK Party introduces legislatio­n revamping concordat process

Dünya Executive - - POLITICS - CANAN SAKARYA – ANKARA

With the increasing number of concordats in recent months and the misuse of speculatio­n, the AK Party has proposed a law that will both make concordat applicatio­ns more difficult and better manage the process. The law will also address commercial disputes. The mediation facility, which is still a preconditi­on for dispute cases between workers and the employers, will now be implemente­d in commercial disputes. So, in commercial claims and compensati­on cases, it is necessary to apply to the mediator before the case is opened.

Who will prepare concordat reports?

With the new regulation, the scope of independen­t auditing firms to report will be reduced. The audit will be carried out by independen­t auditing bodies authorized by the Public Oversight Accounting and Auditing Standards Authority that audit public interest organizati­ons. While in the previous regulation the financial analysis report was sufficient for the concordat, a restrictio­n was introduced by adding ‘reasonable assurance audit report’ in the proposal. The report will be prepared in accordance with Turkish Standards on Auditing. The selection of the concordat commission­er will be selected from the list of committees created by expert committees. While registrati­on from the institutio­ns authorized by the Ministry of Justice must be completed for registrati­on, one person will not be able to act as a temporary commission­er or a commission­er in more than five files simultaneo­usly. The provisions in force on the date of demand will be applied to the demands of the concordat on the date of entry into force of the regulation.

Mediation requiremen­ts for commercial claims cases

With the law proposal, new regulation­s for commercial claims cases will be added as well. In commercial cases, a new requiremen­t will force mediation before a lawsuit for claims over compensati­on and payment of debt. This requiremen­t will not apply to cases of first instance courts and district courts of justice and cases in the Court of Cassation as of the date of entry into force of the regulation. If it is understood that the case was opened without applying to the mediator, the case will be rejected.

The AK Party, which put the proposal on the agenda of the Parliament­ary Justice Commission last week, is expected to enact it at the parliament this week. According to the informatio­n provided by the Minister of Trade, Ruhsar Pekcan, so far 356 companies have declared concordat. Concordat is a mechanism aimed at saving companies from possible bankruptcy. Companies that cannot pay their debts can restructur­e their debts by extending their maturity or demanding the concordat to pay off their debts or to get rid of a possible bankruptcy.

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