MINIMUM DEBTS FOR STATUTORY DEMAND

Mdm Claire Chiang See Ngoh asked the Minister for Law, in view of the upward trend in the numbers of insolvent small and medium enterprises being wound up and the forecast by the legal community of more to come in the next two years, whether his Ministry is prepared to review the statutory minimum in terms of debts owed by small and medium companies before they are deemed to be insolvent.

Prof. S. Jayakumar: The number of companies being wound-up has been decreasing. In the first half of this year, 120 companies were wound-up, compared to 135 in the second half of last year and 155 in the first half of last year.

The number of small and medium companies being wound-up has also been decreasing. 72 companies with paid-up capital of $500,000 or less were wound-up in the first half of this year, compared to 89 in the second half of last year and 100 in the first half of last year.

The minimum debt level for the issuance of a statutory demand (which is the first step towards winding-up proceedings) was raised from $2,000 to $10,000 only in September 1999. Given the above statistics, there is no need to review the minimum debt level at this point in time. Nevertheless, Ministry of Law will continue to monitor the situation and consider appropriate measures to take should the need arise in future.