The Minister for Justice and Attorney-General, Godfred Yeboah Dame, has encouraged licensed Insolvency Practitioners (IPs) to prioritise saving distressed companies, emphasising that the hasty winding down of firms that have the potential to be revived could harm growth of the private sector.

In his keynote address, he stated that the primary objective when dealing with struggling businesses should not be liquidation, but efforts should be made to rescue and preserve distressed viable companies whenever possible, considering the impact on employment and other factors.

The minister’s remarks were delivered by his deputy, Mr. Alfred Tuah-Yeboah, at the induction ceremony for the second cohort of insolvency practitioners organised by the Ghana Association of Restructuring and Insolvency Advisors (GARIA).

“Where a business can be saved by restructuring, every effort should be made by skilled professionals to save it by restructuring it; therefore, there is now the need to encourage lawyers, accountants and bankers to take an interest in the restructuring profession,” Mr. Yeboah said.

Furthermore, he expressed his belief that the expertise of well-trained insolvency practitioners would be highly sought after, given the current global economic conditions and the growing complexity of the business environment.

In a speech delivered by the Bank of Ghana’s Head of Resolution Office, Elliot Amoako, on behalf of the governor, Mr. Amoako said though the BoG operates in a specialised segment, the bank will not hesitate to seek the assistance of licensed insolvency practitioners if the need arises.

“I want to stress that the resolution of banks and SDIs is subject to the special resolution regime established for banks and SDIs under Act 930. The Bank of Ghana, however, will not hesitate to rely on licensed professionals of the Ghana Association of Restructuring and Insolvency Advisors (GARIA) in the event of any future occurrences.”

In addition, he encouraged licensed insolvency practitioners to stay informed about global developments as the increasing level of globalisation meant that events occurring in other parts of the world could have local consequences.

At the event, which saw the induction of over 160 members to the institution’s roll of licensed IPs, the Registrar of Companies, Jemima Oware, reiterated the need for inter-agency collaboration across the financial spectrum – banking, accounting, taxation, insurance and securities – as well as with the judiciary to promote efficiency in the application of the Corporate Insolvency and Restructuring Act (CIRA).

“It is going to offer greater ability to respond to the local needs of distressed companies, address crossover problems, and will clarify and improve the role definition of each of these agencies, especially when creditors and other claimants initiate a charge against a distressed company,” she explained while pledging her support for training and related activities.

She stated that the review of the CIRA Regulations is still ongoing as the Legal Committee of the Registrar of Companies has requested additional work from the consultant. The aim is to ensure that key stakeholders review and approve the regulation before it is passed by parliament to improve the work of insolvency practitioners.

As for the operationalisation of the ORC, she confirmed that they are close to finalising and approving the strategy document. Once accepted, the plan is to have the ORC self-financing to carry out its mandate, which includes the establishment of an Insolvency Service Division. This division will regulate insolvency practitioners for the first time.

In her own words: “After these documents have been accepted, we will move to ensure that the ORC is self-financing to carry out its mandate, which includes the establishment, for the first time, of an Insolvency Service Division to properly regulate insolvency practitioners”.

CEO of GARIA George Fosu explained that the induction ceremony is part of the association’s broader objective to equip IPs with the essential core competencies required to assist businesses and organisations.

He emphasised that current training and education of insolvency practitioners need improvement, particularly in terms of business modelling, strategy and corporate balance sheet restructuring. “This ceremony is essential in laying a solid foundation for the inductees to develop the skills and knowledge necessary to assist distressed organisations,” he said.

Additionally, Mr. Fosu noted that the ceremony aims to raise awareness among businesses across the country about the availability of specialised professionals who can provide assistance, particularly in the current challenging economic climate. “It is absolutely critical that entrepreneurs know that they are not alone, which is why we are here,” he explained.

Former Chief Justice Sophia Akuffo, who chaired the induction ceremony, commended the inductees for their perseverance and diligence in reaching this milestone. She also advised practitioners to maintain strong morals and values as these are the pillars of success in their respective fields.

She emphasised that the character of an insolvency practitioner matters to the stakeholders they represent as effective institutions are built on well-rooted value systems.

“Your profession is placed in the engine room of our economy; you must raise yourself and be heard on issues concerning the economy, company rescue, and the efficiency of insolvency practice,” she added.

Last year, during its first induction event, GARIA admitted 108 licensed insolvency practitioners into the profession of insolvency in Ghana. Working in partnership with the Registrar of Companies and the Attorney-General’s Department, the association has now inducted over 270 IPs into the profession.