Doing Business Malaysia Doing Business 2019 Page 52 Resolving Insolvency

Doing business malaysia doing business 2019 page 52

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Doing Business Malaysia Doing Business 2019 Page 52
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Resolving Insolvency - Malaysia Figure – Resolving Insolvency in Malaysia and comparator economies – Ranking and Score DB 2019 Resolving Insolvency Score 0 100 93.45: Japan (Rank: 1) 83.01: Korea, Rep. (Rank: 11) 67.17: Malaysia (Rank: 41) 65.69: Hong Kong SAR, China (Rank: 44) 55.82: China (Rank: 61) 40.40: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Malaysia – Time and Cost China East Asia & Pacific Hong Kong SAR, China Japan Korea, Rep. Malaysia OECD high income 0 0.5 1 1.5 2 2.5 3 Time (years) 0 5 10 15 20 25 Cost (% of estate) 1.7 22.0 2.6 20.6 0.8 5.0 0.6 4.2 1.5 3.5 1.0 10.0 1.7 9.3 Time (years) Cost (% of estate) Indicator Malaysia East Asia & Pacific OECD high income Best Regulatory Performance Recovery rate (cents on the dollar) 81.3 35.5 70.5 None in 2017/18 Time (years) 1.0 2.6 1.7 0.4 (Ireland) Cost (% of estate) 10.0 20.6 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. .. Strength of insolvency framework index (0-16) 7.5 6.8 11.9 None in 2017/18 Malaysia Doing Business 2019 Page 53
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Figure – Resolving Insolvency in Malaysia and comparator economies – Measure of Quality Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Malaysia China Hong Kong SAR, China Japan Korea, Rep. OECD high income East Asia & Pacific 0 2 4 6 8 10 12 14 16 Sub-Indicator Score 2 3 2 0.5 5 3 1 2.5 3 2 1 0 6 3 2 3 5.5 2.5 1 3 5.3 2.8 2.2 1.9 3.6 2.3 1.2 1 Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Figure – Resolving Insolvency in Malaysia and comparator economies – Recovery Rate Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific 0 20 40 60 80 100 Recovery rate(cents on the dollar) 81.3 36.9 87.2 92.4 84.6 35.5 Malaysia Doing Business 2019 Page 54
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Details – Resolving Insolvency in Malaysia Indicator Answer Score Proceeding receivership BizBank can initiate receivership proceeding by applying to the Court to appoint an identified receiver to enforce its security interest as the debenture holder. Bizbank in the meantime does not have to fund the operation while the Receivers and Managers could go out to look for interested buyers with the objective of disposing the hotel as a going concern hence 100% recovery to Bizbank. It will result in a higher recovery for BizBank through sale of the business as a going concern Outcome going concern Selling the hotel as a going concern will fetch better value than selling its assets piecemeal.
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