Luat Viet

:: Question :: What happen if a securities company (the “SC”) or a fund management company (the “FMC”) fails to satisfy conditions on the charter capital in accordance with Decree No. 14/2007/ND-CP (“Decree 14”) providing detailed guidelines for implementing some articles of the Law on Securities? Which sanctions can be applied to such failure?

If a SC or a FMC does not comply with the regulations on the increase of the legal capital in accordance with the timing schedule as required by Decree 14, such company shall be applied sanctions stipulated by the securities law, the details are as below:
Article 70.1.a of the Law on Securities provides that the operation of a SC or a FMC shall be suspended in case it fails to maintain the conditions for the issuance of a license for establishment and operation provided in Article 62 of this Law.
In addition to that, in accordance with Article 62.1.b of this law, one of conditions shall be applied to the issuance of the license for establishment and operation of a SC or FMC is that it must “have enough legal capital in accordance with the regulations of the Government”.
Therefore, if after a SC and the FMC is issued the license for establishment and operation by the State Securities Committee, it fails to comply with requirement on the legal capital stipulated in the Decree 14 (or has not performed procedure for increasing the capital within two years after the effective date of the Decree 14), it shall be suspended by the State Securities Committee.
The license for establishment and operation of a SC or FMC might be revoked by the State Securities Committee if after its operation suspended, such SC or FMC still fails to remedy a breach on the legal capital in accordance with Article 70.2.c of the Law on Securities.
 

• » 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? (01/06/2010)
• » 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? (31/05/2010)
• » 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? (03/05/2010)
• » Question :: We are a unlisted public company which issued convertible bond (two years term) nearly two years ago. In the coming time, the company will register to list shares in the Ho Chi Minh City Stock Exchange (HOSE). In order to shorten time, will the company be able to conduct this procedure along with converting bonds to shares? (28/04/2010)
• » Question :: In 2009, the price of listed shares of many companies increased continuously. Therefore, such companies were required to provide explanation for such increase. There are many companies used the same explaining contents for different explanation. Please kindly provide the regulations on content of the explanation on increase of price of shares? (21/03/2010)