WELLINGTON, June 13 (Xinhua) -- A new legislation requires liquidators in New Zealand to be licensed and meet basic standards of honesty and competence, aiming to protect creditors and the public, Commerce and Consumer Affairs Minister Kris Faafoi said on Thursday.
The Third Reading of the Insolvency Practitioners Regulation Bill and the Insolvency Practitioners Regulation (Amendments) Bill address some failings of the previous system, and shut down the ability of liquidators who fell short on skills and integrity.
"One of the main aims of corporate insolvency law is for businesses to be turned around if they are viable but if they are not, they should be wound up, the assets realized and distributed to creditors in accordance with clear rules and with a minimum of harm to both the insolvent party and their creditors," Faafoi said in a statement.
"Unfortunately, what has happened in some cases is that liquidators fail to protect the interests of creditors, for example, by turning a blind eye when directors have taken assets out of the company under value prior to liquidation," he said.
The new bill introduces a robust regime that will include rigorous competence, honesty and integrity criteria in relation to obtaining and retaining a license to act as an insolvency practitioner, Faafoi added.