Fewer companies likely to go bust with higher debt threshold

 

Alexander Nanta Linggi says prime minister’s announcement will mean fewer companies are likely to be wound-up this year. (Bernama pic)

PUTRAJAYA: The number of companies facing winding-up proceedings this year is expected to decrease after the indebtedness threshold was raised from RM10,000 to RM50,000, said domestic trade and consumer affairs minister Alexander Nanta Linggi.

Nanta said that when the indebtedness threshold was set at RM10,000, the number of companies facing winding-up proceedings stood at 3,022 in 2018 and 3,545 in 2019.

“With this amendment to increase the threshold to RM50,000, we believe we are helping companies from having to face bankruptcy charges,” he told the media in conjunction with the One-Year Malaysia Prihatin, here, today.

Prime Minister Muhyiddin Yassin had announced yesterday that the indebtedness threshold has been raised from RM10,000 to RM50,000, on a permanent basis.

The Companies Commission of Malaysia had previously raised the threshold value of indebtedness, under Section 466 of the Companies Act 2016, from RM10,000 to RM50,000 for the period from April 23 to Dec 31, 2020, to assist companies affected by the Covid-19 pandemic.

At the event, Nanta also launched two plans that will drive the ministry’s direction for the next five years, namely his ministry’s Strategic Plan 2021-2025 and the ICT Strategic Plan 2021-2025, as well as a chatbot application called SARA .

He said the Strategic Plan 2021-2025, which contained five thrusts, 17 strategies, 39 initiatives and 115 action plans, would serve as a pillar for the ministry in implementing policies and programmes that would benefit the people and the business community.

The plan has been formulated by taking into account the government’s key policies outlined in the 12th Malaysia Plan, Shared Prosperity Vision 2030, Malaysia’s Digital Economy and the National Digital Network Plan, he said.

Meanwhile, the ICT Strategic Plan 2021-2025 is a document that outlines the ministry’s digitisation plan towards fully digital services to traders and consumers, he added.

On SARA, Nanta explained that it is an application software that automates interactions or text chats used in managing inquiries and complaints.

On his year at the ministry, Nanta said at the beginning of the implementation of the movement control order (MCO), the ministry had successfully dealt with the panic-buying situation and ensured adequate basic necessities for consumers.

“We also managed to ensure sufficient supply of face masks and hand sanitiser,” he added. - FMT