Speech by Mr Louis Ng Kok Kwang, MP for Nee Soon GRC, at the Second Reading of the Insolvency, Restructuring and Dissolution (Amendment) Bill (Bill No. 37/2022)
Sir, I support this Bill as it will reduce the use of public resources for what is a private matter between creditors and debtors. I have three points of clarification on the Bill.
First, how will the Ministry ensure the effective oversight and quality of private trustees? While the debts between individuals and their creditors are private matters, we do have a public interest in a well-functioning bankruptcy system as part of our economy. MinLaw has stated that the OA will be taking on a regulatory role over private trustees. What standards will the OA apply when reviewing their performance?
In a recent High Court case of Zhang Hong En Jonathan against his private trustee, the Court found little guidance in the statute over how it should exercise its discretion when exercising its review powers over the trustee. Can the Minister clarify the roles of the OA and the Court in supervising trustees?
Ultimately, in that case, the Court took a view that it would only intervene if the trustee had acted so perversely that no reasonable trustee would have done so. If the OA gives similar deference in exercising its supervisory role, creditors and debtors might find it hard to hold trustees accountable if they disagree with the trustee’s decision. Can Minister clarify how creditors or debtors can raise complaints against the private trustee? Should they look to the OA or to the Courts?
My second clarification relates to accessibility to the bankruptcy process. What happens if no private trustee is reasonably available to act in the bankruptcy? For example, if the estate is too small relative to the trustee’s fees to be practical, or if there are too few practitioners available. Will the OA step in to act itself in these cases? Does the Ministry consider there to be enough licensed practitioners to meet the needs of the market?
Finally, how does the Ministry ensure our insolvency ecosystem is equipped to keep up with the latest trends in the economy such as cryptocurrency, “Buy Now, Pay Later”, or peer-to-peer finance? With cryptocurrency, we saw rapid growth and speculation in new asset classes spanning multiple jurisdictions. Can Minister share whether the Ministry is monitoring and preparing for changing trends in bankruptcies following the collapse of Terra and FTX, especially in a backdrop of high inflation? How will we ensure that trustees can properly manage and distribute digital or other new types of assets?
Notwithstanding my clarifications, Sir, I stand in support of the Bill.
Watch the speech here.