KUALA LUMPUR: Saving businesses facing financial ruin must be guided by the principle of "rescue where possible, restructure where viable and resolve responsibly where necessary", says Datuk Seri Azalina Othman Said.
However, the Minister in the Prime Minister’s Department (Law and Institutional Reform) said it should not be misconstrued as saving every company at any cost.
Furthermore, companies must not think of second chances as a licence to escape responsibility, she added.
"The strength of a nation is not measured by whether its people and businesses never fall. It is measured by whether its institutions give them a fair opportunity to rise again," she said in her speech at the "Future-proofing Asian Insolvency Systems" forum on Asian Insolvency Reform 2026 here on Wednesday (Nov 4).
"Let me emphasise that corporate rescue must never become corporate immunity. Accountability must remain central, and creditors' legitimate rights must be protected.
"Our objective is not to save every company at any cost, but to distinguish between businesses that remain viable and those that require an orderly resolution," she said.
She stressed that modern insolvency reform must go beyond managing failure.
"A company that cannot pay its debts today is not necessarily a company without an economic future.
"Some businesses experiencing financial distress may still possess valuable products, experienced employees, established customers and productive assets.
"Premature liquidation may therefore destroy jobs, disrupt supply chains, affect creditors' recovery prospects and eliminate economic value that could otherwise be preserved through restructuring," she said.
Offering lifelines to businesses in financial trouble must preserve economic value, restore dignity and enable businesses and individuals to rebuild their futures, she noted.
"Second chances are an opportunity for eligible individuals to regain financial independence and contribute productively to society.
"We must never confuse financial failure with personal failure. This is what people-centred legal reform means.
"Behind every bankruptcy case, there is a human story. It may involve a single parent, an entrepreneur whose business has collapsed, a victim of financial scams or a purchaser affected by an abandoned housing project.
"Financial difficulties should not automatically result in permanent economic exclusion. This is the philosophy behind Malaysia's Second Chance Policy – Fast Track Discharge Programme 2026, launched in February.
"It prioritises four categories: single parents, micro, small and medium enterprise (MSME) borrowers, victims of financial scams, and purchasers affected by abandoned housing projects.
"Supported by digital applications and collaboration with the Credit Counselling and Debt Management Agency, this initiative seeks to facilitate financial rehabilitation and promote responsible financial management," she said.
The minister also said that there must be strong cross-border insolvency system transformation as investors will consider a country's effectiveness in managing businesses that encounter difficulties.
"They do not only consider not only how easily they can establish a business, but also how effectively a country manages that business when it encounters difficulties.
"A company may have creditors in one country, assets in another and investors across several jurisdictions. When financial distress occurs, fragmented insolvency proceedings can create uncertainty, increase costs and destroy economic value.
"To address this, Malaysia introduced the Cross-Border Insolvency Act 2026, drawing upon the UNCITRAL Model Law on Cross Border Insolvency.
"The Act provides a framework for recognising foreign insolvency proceedings and facilitating cooperation between courts and insolvency representatives," she said.
