Luat Viet

:: Question :: Upon having been approved at principle on establishment by the State Securities Commission of Vietnam, a security company (“SC”) sold its shares to parties other than founding shareholders. After that, the SC could not be established as the founding shareholders did not continue to contribute their capital. In this case, how can we deal with those sold shares?

Clause 2 of Article 62 of the Law on Securities provides that “the founding shareholders or founding members must use their own capital funds to contribute capital to the establishment of the securities company”. Clause 4 of Article 84 of the Law on Enterprises also provides that “in the case the founding shareholders do not register to subscribe for all the shares offered for sale, the remaining shares must be offered for sale and sold out within a time limit of three years from the date of issuance of the business registration certificate to the company.”
From a legal perspective, the SC shall only be permitted to sell its shares offered for sales after obtaining the establishment and operation license (simultaneously being the business registration certificate). In the case SC sold its shares without obtaining the establishment and operation license, such sale and purchase is illegal in accordance with the provisions of the Law on Securities and the Law on Enterprises. The transactions relating to buying and selling such shares should be considered as null and void. The rights and obligations of the relevant parties shall be settled in accordance with the resolution principles applicable to the void and null civil transactions of the current Civil Code by reimbursing to each other all received. This means that such SC shall refund to the outstanding shareholders all the amounts gaining from buying shares to them.
In addition to that, for the purpose of determining the compensation for the damage caused (if any) according to principles of Civil Code, the level of mistakes of the SC and relevant shareholders leading to the invalidity of the civil transactions should be considered.
 

• » 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)