Financial Restructuring Committee Holds Its First Meeting at the UAE Ministry of Finance

The Financial Restructuring Committee held its first meeting at the Ministry of Finance (MoF), which was headed by HE Younis Haji Al Khoori, Undersecretary of MoF and Chairman of the Committee. The meeting had the participation of representatives from MoF, the Ministry of Economy, Ministry of Justice, UAE Central Bank, Securities and Commodities Authority, Abu Dhabi Government, Government of Dubai and Government of Sharjah.

The Committee, established pursuant to the UAE Cabinet Resolution No.4 of 2018 on the formation of the Committee of Financial Restructuring, oversees the procedures of financial restructuring outside the scope of the court, appointing experts in the field of financial restructuring, establishing an electronic record of individuals issued against them a bankruptcy ruling, by either imposing restrictions as ordered by the court or the loss of eligibility under the provisions of the bankruptcy law.

HE Younis Haji Al Khoori said: “The formation of the Financial Restructuring Committee meets international requirements of the Global Competitiveness Index, particularly the World Bank's Doing Business report, on the basis that providing a mechanism for settling off-court debt and traditional bankruptcy procedures has become an international requirement that should be provided for in modern bankruptcy laws.” HE added: “The system for the conditions and procedures of the Committee, approved by the UAE Cabinet, is a model for the region and the world in terms of providing a stable and flexible environment and avoiding harmful business reputation.”

In accordance with the Committee's work, the Board of Directors of financial institutions that suffer from debt may request for financial regulation of their institution in accordance with the procedures laid down in the law and the financial regulation committee, subject to their meeting of the following conditions.

The financial institution is in current or anticipated financial difficulties, and is not at a standstill from paying its debts or in an existing or anticipated financial disclosure. In the case of financial disclosure, the institution needs to enter into settlement agreements with creditors before it reaches a more difficult financial position which may force it to seek protection in court or to declare bankruptcy.

In the event of the Committee accepting the request of the financial institution, it does not lead directly to a financial restructuring, since the role of the Committee includes selecting specialized experts who assist institutions to settle their debts with creditors outside the scope of the court, to prevent harmful reputation for business.

Article (3) of the Federal Decree Law No.9 of 2016 on Bankruptcy included provisions on forming a standing committee to oversee the financial restructuring. On that basis, UAE Cabinet issued Decree No. (4) of 2018 regarding the formation of the Financial Restructuring Committee, which includes HE Younis Haji Al Khoori, Undersecretary of MoF, as Chairman of the Committee; HE Dr.Obaid Saif Al Zaabi, Chief Executive Office of Securities and Commodities Authority (SCA); HE Humaid bin Butti AL Muhairi, Assistant Under-Secretary for the Corporate Sector and Consumer Protection; HE Khalid Mubashari, Executive Director of Corporate Governance Sector at Department of Economic Development in Dubai ; Advisor Jassim Saif Buasiba, Director of the Judicial Inspection Department at the Ministry of Justice; Ahmed Jasim Al Zaabi, Director of Government Investments at the Department of Finance- Abu Dhabi; Faisal Ali Al Mansouri, Revenue Administration Director in the Ministry of Finance; Arwa Al Owais, Director of the Accounting Department at Department of Finance- Sharjah and Mr. Khalid Omar Al Kharji Senior In-Charge of Examination Team, Banking Supervision and Examination UAE Central Bank.

During the first meeting, HE Dr. Obaid Saif Al Zaabi, was elected as Vice-Chairman of the Committee as indicated in Article 2, paragraph 3 of the above mentioned resolution. In addition, two subcommittees, the technical Committee and the Legal Committee, have been formed and will assist the Committee in accomplishing its duties and functions to the fullest extent possible. The Committee has adopted its work plan, administrative system and the dates of its meetings for 2018.

In accordance with the decision of the UAE Cabinet, the secretariat of the Committee, the procedures governing the work of the Committee and the mechanism for holding its meetings have been approved as well as the appointment of the Secretary of the Committee.

Following the meeting, HE Younis Al Khoori expressed his thanks and appreciation for the UAE’s wise leadership for continuously putting in place proactive policies to establish a conducive environment that eases the process of doing business, under a legal and legislative structure and in line with the approved international standards. HE added: “Having a committee for financial restructuring provides distressed financial institutions continuous assistance, to avoid complex financial problems leading to the urgent need for government entities to form committees to stop the situation from deteriorating.”