china bankruptcy

Bankruptcy law gives boost to investor trust



www.chinaview.cn 2007-06-29 08:33:38

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BEIJING, June 29 -- China mainland's bankruptcy law has increased the country's attractiveness as an investment destination, a new survey of finance executives has found.

About 72 percent of 480 senior finance executives in China, Malaysia and Singapore said they would add investment on the mainland as a result of the newly revised bankruptcy law that took effect on June 1, Deloitte Touche Tohmatsu and CPA Australia said Thursday in Shanghai, quoting a survey made in late May.

About 33 percent of the respondents said they would add investment in the mainland by up to five percent, and another 33 percent said they would look for a six percent to 30 percent increase. Six percent said they would boost investment by more than 30 percent.

Investors' positive attitude toward the new law was underpinned by a workable and transparent bankruptcy regime that will assist investors in identifying investment risks and exit options if investments perform poorly, experts said.

The new law replaced the 1986 trial version, which covered only state-owned enterprise. The new law regulates SOEs, foreign firms and private companies.

"The law is a major milestone in the development of the corporate bankruptcy system in China," said Derek Lai, national leader of reorganization services at DTT China. "Before its implementation, China mainland only had controlled bankruptcy for state-owned enterprises, but there was nothing in place for the more than 4.9 million private firms."

The new law allows creditors to claim debtors' assets overseas and give creditors the right to implement overseas court verdicts involving assets in the mainland.

The new law also introduces the concept of an independent administrator for bankrupt assets, which is in line with international practice.

About 87 percent of respondents said they thought the independent third-party administrator system can help protect debtors' interest.

(Source: Shanghai Daily)

that is the one i was looking for!

I hope this will not make it easier for scam companies to get out of their debts!