PETALING JAYA: A former CEO of SME Corp has urged the government to include a clause under the Covid-19 Act to allow automatic discharge from bankruptcy for those involved in small and medium-sized enterprises (SME) forced to shutter by the pandemic.
Hafsah Hashim said countries such as Japan and the United Kingdom have a clause under their law which allows businessmen to be automatically discharged after three years.
In Malaysia, one must first apply to the director-general of the Insolvency Department and that, too, only after five years of going bankrupt, she said.
“The government can consider this automatic discharge clause, where companies that close because of Covid-19 are given an automatic discharge, maybe after two or three years. This can be put under the Covid-19 Act.
“That’s a good instrument to revive the nation’s economy in the fastest possible time,” she said in a webinar hosted by Bank Islam today.
She did not dismiss the possibility of the nation going back under the movement control order (MCO), with the increase in cases recently, adding that many more SMEs would be forced to close if Malaysia goes into a lockdown again.
She said Singapore has had a Covid-19 Act in place since March, while Malaysia was still in the fine-tuning stage.
Should the MCO be re-implemented, Hafsah said SMEs had no choice but to embrace new norms in business, including digitalisation, e-commerce and upskilling.
She said e-commerce businesses had particularly thrived during the MCO, with the value of some of these doubling during the lockdown.
“It’s not a case of one size fits all; such is disaster recovery. It takes yourself knowing whether you want to march ahead, reconstruct your business to the new normal, and take advantage of the opportunities that abound out there.”
Ganesh Gunaratnam, a working capital management leader from PricewaterhouseCoopers, said even major companies were making the switch to prepare themselves for an MCO-environment.
“They are predicting that the pandemic won’t end soon, so they’re preparing themselves,” he said.
He added that it does not have to be costly for SMEs to go digital with their businesses, saying there are many cloud-based solutions they can leverage on.
“For example, Shopee, Lazada, GrabMart; these are options that weren’t there before this.
“Those days, holding a seminar must be physical, but now a webinar can be done.
“The government can help but what needs to happen is that we need to help ourselves”
Source: https://www.freemalaysiatoday.com/category/nation/2020/07/23/allow-automatic-discharge-from-bankruptcy-for-smes-hit-by-pandemic/