It's time to change the Asian mindset about corporate restructuring

IN ASIA, there has traditionally been a stigma associated with corporate insolvencies. The taint of insolvency can be hugely value-destructive; it can destroy the goodwill of the business, and brand the managers and controllers as failures and social outcasts.

Culturally, the problem is exacerbated by the dominance of family-controlled businesses, whose patriarchs or honchos are held in high esteem by the business community - and for whom the stigma associated with insolvency can often be unpalatable.

While there has been a gradual global shift from viewing insolvency strictly as a terminal procedure leading to inevitable liquidation, to recognising insolvency proceedings as a gateway to potential business rescue, this mindset change is largely limited to the leading Western financial centres, such as those in the United States and the United Kingdom.