MEMORANDUM TO MINISTRY OF FINANCE ON LIQUIDATORS’ LICENSING FRAMEWORK
The Institute has received requests from members with more than 5 years’ experience, and even some with more than 10 years’ experience in liquidation and insolvency, to raise with the relevant authorities, the issue of the requirement of having an audit licence before an application for a liquidator’s licence can be made, and to highlight the ensuing hurdle that the current requirement imposes to members who want to become Approved Liquidators under the Companies Act, 1965. Under the current framework, these members are unable to apply for liquidators’ licences as the present requirement stipulates that one must have been issued with an audit licence for at least a year before an application to be Approved Liquidators can be made to the Ministry of Finance.
The above requirement is pursuant to section 8(3) of the Companies Act, 1965 (the Act) which states that:
“Any approved company auditor may apply to the Minister charged with the responsibility for finance to be approved as a liquidator for the purposes of this Act, and the Minister, if satisfied as to the experience and capacity of the applicant, may on payment of the prescribed fee approve such person as a liquidator for the purposes of this Act.” (emphasis added)
The members of the Insolvency Practice Committee (IPC) prepared a Memorandum that discusses the requirements in certain other jurisdictions for the issuance of liquidators’ licences. The Memorandum also proposes certain amendments to the law in this area.
In brief, the proposals contained in the Memorandum are:
- That section 8(3) of the Act be amended to dispense with the requirement of having an audit licence before an application for a liquidator’s licence can be made. Instead, it is proposed that section 8(3) allows any person who is registered under the Accountants Act, 1967 as a Chartered Accountant (Malaysia) to apply to be an Approved Liquidator; and
- That a minimum requirement of five years relevant insolvency experience in a recognised firm be set when considering the experience and capacity of the person applying for a liquidator’s licence. The said applicant must be a member of MIA
The Memorandum, which has been approved by Council, has been submitted to the relevant licensing authority, namely the Bahagian Analisa Cukai (Tax Analysis Division) of the Ministry of Finance.