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Question :: I am a member of the Supervisory Commission (the Commission) of a public company which is unlisted and termed from 2007 to 2010. Until now, my term is still valid. In 2009, I was [not] invited to attend any meeting of the company’s Commission. Recently, I also did not attend the Commission’s meeting to produce the Commission’s Report for submission to the General Shareholder’s Meeting (the Meeting) year 2010 on April 9. I was informed that this Commission’s Report was built by the Commissions’ Director (the another member of the Commission also did not attend). I would like to ask you whether the operation of the Commission like that is legal or not? Is the Report mentioned above legal? What should I do to comply with the rights, duties and obligations of a Commission’s member?
Question :: I am a president of the Management Board (“the Board”) of a public company. As per regulations, the term of the Board, Supervisory Commission (“the Commission”) is five (5) years. Therefore, the first term of the Board, Commission is due on November 2010. However, in order to facilitate the voting of the Board, the Commission in the second term, the Board would like to submit the General Shareholder’s Meeting (“the Meeting”) with the latest on April 19, 2010 for renewal of the first term of the Board, the Commission until April 2011. So, the question is that is the renewal true or not? If the shareholders are not taken opinions directly at the Meeting, can the Board collect opinions indirectly from shareholders in writing? If the Meeting does not pass the renewal, how can the voting of the Board, the Commission be taken in compliance with laws?
Question :: Our company registers shares at the Securities Depository Central (SDC), but cannot deposit, of which my 10.000 shares. So, can I transfer directly 2.000 shares to my brother and compliment 2.000 shares to my wife?

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LEGAL NEWS

New regulation on financial regime applicable to insurance enterprises and insurance brokerage enterprises.

On 28 April 2009, the Ministry of Finance issued Circular No. 86/2009/TT-BTC amending and supplementing some articles of (i) Circular No. 155/2007/TT-BTC dated 20 December 2007 of the Ministry of Finance providing guidelines for implementing Decree No. 45/2007/ND-CP dated 27 March 2007 of the Government guiding a number of Articles of the Law on Insurance Business; and (ii) Circular No. 156/2007/TT-BTC providing guidelines for implementing Decree No. 46/2007/ND-CP dated 27 March 2007 of the Government providing financial regime applicable to insurance enterprises and insurance brokerage enterprises (“Insurance Enterprises”/IE).
This Circular amends following issues:
1. Evaluation of financial capacity in the file for issuance of the establishment license of the IE:
Proof of capacity of the investor to contribute full capital registered for establishment of an IE will be subject to the fact whether an investor is a founding shareholder (or a founding member) or not and the ratio of capital contribution by such Investor to an IE, details are as below:
(i) A Financial Statement (“FS”) certified by an independent audit for latest 03 consecutive years accounting from the year of application for the IE establishment in respect of organization - founding shareholder (member) or contributes at least 10% of the charter capital; FS for latest 03 consecutive years in respect of investor being legal entity and is not the founding shareholder (member) or contributes less than 10% of the charter capital;
(ii) Financial sources for capital contribution for establishment of an IE must be legitimate sources, investors must not use loan amount or delegated investment capital of any form;
(iii) A Vietnamese organization, which is a founding shareholder (or founding member) or a shareholder who contributes at least 10% of the charter capital in the IE, wishing to contribute its capital for establishment of an IE, must satisfy 3 conditions: (i) own at least VND150 billion of capital contribution, (ii) contribute no more than 25% of contributed capital to an IE, and (iii) make a profit proved in the audited FS of the latest 03 consecutive years;
(iv) A Vietnamese organization wishing to contribute its capital for establishment of an IE of less than 10% of the charter capital of the IE, must satisfy 2 conditions: (i) have a healthy financial situation during latest 03 consecutive years, and (ii) the capital owned by such organization after deducting long-term investment amount must be greater than the capital contribution registered to contribute to an IE.
2. Increase and decrease of charter capital of an IE:
Within 06 months from the date the Ministry of Finance (MoF) approves in principle the increase or decrease of the charter capital, an IE must completes the decrease or increase under the approved plan and report the result to MoF for its consideration to issue the amended license. In case of failure to perform the approved plan for increase the charter capital, an IE must report its failure to MoF for its further action.
3. Maximum level of responsibility withheld by an IE:
An IE can be permitted to withhold a maximum level of responsibility per each risk or each separate damage of no more than 5% of capital owned by investors (instead of the former level of 10%).

MoF also explicitly stipulates the principle for defining the turnover from insurance business activity arising within each period. Accordingly, an IE must take original insurance fee into the turnover in case the insurance responsibility toward insurance purchaser arisen after the signing of the insurance contract and the purchaser fully paid insurance fee, and there is evidence that the IE accepts insurance and the insurance purchaser fully contribute insurance premium, the insurance contract is signed and in the insurance contract, an IE agreed for the insurance purchaser to owe insurance premium.
Moreover, this Circular also makes essential amendments on regulation on examination, internal superior; standard conditions for managers and operators in an IE.
This Circular shall take effect after 45 days from the date of signing