Bahrain Small and Medium Enterprises Development Society has called for urgent solution to the financially troubled companies that would protect them from going bankrupt.

The society warned that many businesses might close down and lay off their employees if no suitable solution was introduced to support them.

Society chairman Ahmad Subah Al Saloom said: "We have submitted a suggestion to the Ministry of Industry, Commerce and Tourism to introduce a new law in Bahrain similar to ‘Chapter 11’ in the US law, which is used by financially troubled companies allowing them to reorganization their businesses and pay back their creditors over a long period of time."

Introducing bankruptcy law in Bahrain will protect many Bahraini companies from closing down, he noted.

"This law gives businesses an extended grace period to pay back their debts, reduced interest rates, and exempt from government fees and taxes until the company is back to good shape. It offers various benefits that support financially troubled companies while guaranteeing the rights of all the creditors and individuals,” Al Saloom explained.

"If such law comes true, Bahrain will be the first in the region to introduce an advanced procedure that would protect the rights of Banks and individuals as well as support economic growth.”

Khalaf Hujair, society's vice chairman said: "We are doing our best efforts to find appropriate solutions to the financially troubled businesses by interacting with various governmental and private bodies. The society aims to support Bahrain's economy and help in creating better business environment that ensures economic prosperity and stability according to Bahrain's vision 2030.”

“There are around 200 businesses who have spoken about their financial troubles and we need to find a way to support them, but we don't approve of giving away financial grants without examining their condition and looking into the reasons behind their bankruptcy.

“Some companies needs counselling to improve their business; others need restructuring or even changing their type of business. Some companies received financial support in the past and have returned again asking for support. We need a transparent and appropriate procedure for giving the financial support,” he added.

The society held its fifth board meeting to discuss plans to organizing a number of key events and conferences that aim to promote entrepreneurship and developing SMEs in Bahrain.

The society also discussed the plans to promote the advantages of the Free Trade Agreement with the United States of America on the occasion of its 10th anniversary. It will demonstrate the benefits of the FTA to business and how can they utilize it properly. – TradeArabia News Service