ABRIPSA RENEWS CALL FOR A BINDING TRANSFORMATION POLICY IN INSOLVENCY APPOINTMENTS

More than a decade has passed since the Minister's 2014 appointment policy for insolvency practitioners was set aside by the Western Cape High Court, in litigation in which ABRIPSA participated as a full party in defence of transformation. The Association argued then that the demographic composition of the profession — and of the appointments that sustain it — could not be left to correct itself. It has not corrected itself.

In the years since the policy was set aside, no binding framework has replaced it. Appointments to substantial estates remain heavily concentrated in a small circle of established practices, while capable Black practitioners — many of them enrolled on the Masters' panels for years — are appointed sporadically, to modest estates, or not at all. The pattern is familiar in every Master's office in the country, and it compounds: appointments build experience, experience builds seniority, and seniority attracts further appointments. Left alone, concentration reproduces itself.

How appointments are made — and where a framework must intervene

The machinery is well established. In sequestrations the Master may appoint a provisional trustee under section 18 of the Insolvency Act 24 of 1936. In liquidations, appointments are made under the winding-up provisions of the previous Companies Act, preserved in transition under the Companies Act 71 of 2008. Final appointments are shaped by the requisitions lodged by creditors, and every appointee must furnish a bond of security before assuming office.

Each of these steps is neutral on paper. In practice, each favours incumbency. Requisition practice rewards long-standing relationships with major institutional creditors. Security facilities are extended most readily to practices with an established book of estates. Provisional appointments — where the urgent, formative work of an estate is done — tend to follow the same well-worn paths. None of this requires bad faith; it requires only inertia. That is precisely why a deliberate, lawful counterweight is needed.

What the Association has proposed

The proposals tabled with the Office of the Chief Master ask for a framework that is rational, transparent and capable of measurement. In summary, the Association has asked for:

• published, objective criteria for admission to the Masters' panels, applied uniformly across all Masters' offices;
• routine recording, and periodic publication, of how appointments are in fact distributed — by office, by estate size and by practitioner profile;
• structured co-appointment practice on substantial estates, pairing senior and emerging practitioners with defined responsibilities and genuine skills transfer;
• guidance on the weight given to creditor requisitions, so that the preferences of repeat institutional creditors do not operate as the sole determinant of appointment;
• engagement with the security and bonding market, so that the cost and availability of bonds of security do not function as a barrier to entry; and
• a standing consultative forum between the Chief Master, the Masters and the professional associations, meeting on a published calendar.

None of this asks the Master to abandon discretion. It asks that discretion be exercised within a framework that is visible, consistent and reviewable — the ordinary discipline of public power. A policy that is rational, properly consulted and lawfully made can achieve what the profession has waited more than a decade for.

The business rescue dimension

On the business rescue side the levers are different. Practitioners are licensed by the CIPC under section 138 of the Companies Act 71 of 2008 read with regulation 126 of the Companies Regulations 2011, and appointments flow from boards under section 129 or from the courts under section 131 — not from the Master. Transformation in rescue therefore runs through licensing, through the procurement practices of organs of state, and through the panels maintained by banks and other significant creditors. The Association is engaging on that front separately, and calls on lenders and state entities to publish the composition of the practitioner panels on which they rely. See the Association's commentary on co-appointments and skills transfer for the appointment practice we ask them to adopt.

Engagement first

The Association's preference is engagement. The proposals are on the table, correspondence with the Office of the Chief Master continues, and the Association will report to members as the process develops. But the position should not be misunderstood: ABRIPSA has litigated questions of this kind before, as a full party and with the resources the issue demanded, and it retains both the standing and the resolve to do so again if engagement fails. Transformation of the insolvency profession is not an aspiration the Association is prepared to defer indefinitely.

Members with direct experience of appointment practice — panel admissions, requisitions, security requirements or provisional appointments — are invited to submit particulars to the secretariat through the contact page. Evidence, carefully gathered, is what turns advocacy into policy.