Bui Van Mai, Secretary General of the Viet Nam Association of Accountants and Auditors, discusses the responsibilities of liquidators with the Viet Nam Economic Times.
The 2014 Law on Bankruptcy, which takes effect on January 1, 2015, has rules covering a liquidator's functions and responsibilities. Why was this not covered by the 2004 law?
The job of a liquidator is to manage and liquidate assets of businesses that have declared bankruptcy. This profession has been practiced in other countries for a long time, but in Viet Nam, it is the first time that it is being legalised through the new law on bankruptcy.
The 2004 law dealt with the process of filing for bankruptcy. However, implementation of these procedures could not happen on its own. It was dependent on some conditions. That's why it was very difficult to put them into operation. In recent years, quite a few State-owned enterprises have ceased operations, but they have not been able to file for bankruptcy.
Meanwhile, many private enterprises do not want to file for bankruptcy because of cumbersome, costly procedures.
In the 2014 revisions, some international practices, including the function of liquidators, have been introduced.
Under the 2004 law, the management and liquidation of assets had to be done by a council appointed by a court. Many people have complained about flaws in this process, pointing out that it was not objective.
So I hope that the introduction of a liquidator, a third party in the process that can independently function in the interest of all parties of involved, will improve matters.
The profession of liquidator is new to Viet Nam. As such, would it be closely monitored by the government?
During the law compiling process, members of the compiling teams came up with different opinions on criteria and conditions for a person to be certified as a liquidator. However, in my opinion, I don't think liquidation will be blossoming as many other jobs. Further more, neither do we want to see many businesses to go bankruptcy in order to increase the number of practitioners in our country.
Neither do I think we need to create an office to manage liquidators. Under the 2014 Law on Bankruptcy, liquidator certification will only be granted to a certain subjects, including auditors and lawyers. As the practice of these two professions share many similarities with the liquidation job.
The court will then appoint liquidators or insolvency practitioners. Of course, the liquidator must be knowledgeable, particularly in the fields of enterprise accounting, evaluation and law on bankruptcy. Costs incurred during the liquidation process is included in the real costs of implementing procedures for bankruptcy.
Do you know any individuals or organisations that have to be liquidators?
The 2014 Law on Liquidation will come into force on the first day of next year. Many people are waiting for guiding documents before apply for certification.
I think qualified lawyers and auditors will be eligible to apply for certification as a liquidator.
But, to be certified as liquidators, they must satisfy some additional conditions, particularly having thorough knowledge of the Bankruptcy Law.
However, I am afraid that people wanting to focus solely on being a liquidator might not find much work. In addition, asset liquidation is a long process. So a liquidator can work for at least two or three companies while practicing as an auditor or a lawyer.
Do you think that there should be an agency to manage liquidators, like those for lawyers and auditors?
I don't think a new agency is needed for managing liquidators. This function should be attached to an existing operational agency. — VNS