Concordat vs. Financial Instrument Card

It is possible for companies whose assets are more than their debts****to be regained so that both their employees and creditors are not victimized. By using financial instruments without declaring a concordat, companies experiencing economic difficulties can find a way out. Economically stranded companies are burdened with debt when they are unable to meet the routine payments of their receivables. Along with them, employees, creditors, the company that company does business with and market players are also harmed. At this point, the concordat was declared; companies are looking for a way out. However, in such cases, the solution can be qualified and the bills and checks that have provided confidence in the market can be instruments in this direction. In addition, the use of SUKUK (lease certificate) and its varieties can create alternatives as an investment tool. Doğuş Bektaş, Partner of Abaküs Bağımsız Denetim and SMMM A.Ş., which carries out many concordat projects in Turkey, gave information about the concordat processes, their advantages and disadvantages and the actions that can be an alternative to the concordat. Stating that banks are not supportive enough in terms of facilitating issues concerning companies, Bektaş said, "Companies with hundreds of employees and millions of assets are almost destroyed by not postponing the payment of 1-2 million TL. If you look at the companies that have failed, gone bankrupt or declared concordats in the past, you will see that the vast majority of them have more assets than they owe. The fact that the hot money they receive monthly is less than they need should not mean that these companies are bankrupt." Stating that the giant companies, which have fallen into a difficult situation with the effect of the compression in the global markets, have entered darkness with the desire to collect their receivables by the banks within 1 year, Bektaş said, "This is not in accordance with either the law or commercial ethics. In fact, while giving these loans, it seems that the banks that provide the company documents every 3 months and see the cash flow have the right to call the loan according to the relevant laws, but this issue removes a lot of water, one day a company can make these banks pay heavy compensation with a solid case." Bektaş underlined that structuring the loan in question according to the new turnover and cash flow could be a more appropriate and comforting name instead, "The relationship between asset management companies and banks is known to everyone, asset management companies are selling what banks will receive for 5-10 percent of the total loan, do certain companies receive positive discrimination here? This will be questioned one day." UZEL'S FACTORY AREA WAS PAYING OFF ITS DEBTS At this point, Bektaş, who cited the Uzel tractor factory, which has been idle for years, as an example, said, "The example of Uzel could not be sold in front of everyone's eyes, from the locked mortgage structure, the tender was canceled. However, the Uzel Machine Tractor Factory, which was built on a 93.5-acre land only in Rami, Istanbul, paid all its debts several times. In this sense, Bektaş stated that the concordat is a successful model in terms of giving companies a breather and not victimizing creditors and employees, "Our companies are too valuable to be left to the bosses. In our companies; The rights of the state, employees, creditors, customers and even their heirs should be taken into consideration. The fact that in order to declare a concordat, the Independent Audit company had to submit a file to the court through a lawyer, almost destroyed all consensual situations. Both the lawyer and the audit firm commissioned complete work according to approval, dual control and International Reporting Standards. Similar to this model, companies that establish a new company to be 100 percent participated in with an independent audit company and an Independent Board member or lawyer can also find resources through this new company with 100 percent control and supervision by approving their projects, even if they are mortgaged." ADVANTAGES AND DISADVANTAGES OF THE CONCORDAT PROCESS Doğuş Bektaş explained that a kind of shield was created with the concordat in order to prevent the creditors and the employees of that company from being victimized by the companies that do not pay or will not be able to pay their debts, and said, "For the moral honest traders who do their jobs in the real market, we can say that hundreds of workers or creditor parties are provided with a protection shield for a while so that hundreds of workers or creditor parties are not victimized in cases where they cannot receive an important receivable or the renewal of bank loans is delayed." Bektaş said, "In addition to not being able to initiate enforcement bankruptcy proceedings against the debtor and stopping the proceedings that have started, stopping the interest to be operated in this process and converting foreign currency based transactions into TL are also important advantages. Even some of the personnel wages can be taken from the state." Bektaş stated that the most visible disadvantage is the cost of the application stages such as the audit report, legal proceedings as well as court fees, which must be paid when the concordat declaration process begins. Doğuş Bektaş said that it is possible for companies to get out of difficult situations without declaring a concordat. At this point, he emphasized that financial instruments come to the forefront. Bektaş said that the capital shortage of companies can be solved with financial instruments, that it is important to increase the financial instruments suitable for the operation and to legalize the simple solutions that the market finds itself in managing these processes correctly. He explained that companies can find a way out by using bill-checks, sukuk and varieties that have been made qualified and have restored confidence in the market. "If the promissory note qualifies, it becomes an instrument. Securities with mortgage-like guarantees, which are regulated by financial institutions and have six full as a permanent leprosy, will be a means of payment or even a creditable instrument. Non-bank financial instruments may be offered to listed firms, especially those whose stocks are liquid. TRADE SHOULD BE DONE NOT ONLY WITH MONEY BUT ALSO WITH CHECKS The cheque must definitely regain its credibility in the market, traders must be able to trade not only with money but also with checks, and here the self-control system will be possible with the printing of reliable checks based on collateral-mortgage. Both cheques and banks should be held accountable. Melek Investment is growing exploding in the world, we have companies that invest in us, it cannot get a balance from the company where it invests money. Laws are inadequate, companies are unowned. There are TL 990 billion of bank deposits and TL equivalent foreign currency deposits of TL 950 billion. Since these people cannot find an alternative as an investment tool, there is money in deposits, it is necessary to think about it here. Sukuk and its types must be implemented, the collateral-structure within the separate company must be controllable, the recipient of the money must not be able to empty his or her insides, he must be personally responsible."