Luat Viet

:: Question :: Before the opening of one General Meeting of Shareholders (GMS) of a listed Company (Company A), an institutional shareholder (Company B) convening this meeting on its own initial issuing a template of Power of Attorney printed with its seal hanging on a corner of this template. Company B requests that the authorization for a representative to attend this GMS must be performed in accordance with this template. Please advise whether this stipulation of Company B is lawful or not?

Answer:

Assuming that the convocation of an extraordinary GMS in this case is lawful, Company B (as shareholder of Company A and shareholder convening the GMS) requires the Power of Attorney as mentioned above is not in compliance with the current laws and regulations.

Clause 2 of Article 101 of the Law on Enterprises 2005, regulates the right of attending GMS as below: “The authorization for a representative to attend the GMS must be made in writing on the form stipulated by the company and must bear signatures in accordance with the following provision: (a) Authorization to represent a shareholder being an individual must bear the signatures of both that shareholder and the person authorized to attend the meeting; (b) Authorization on behalf of a shareholder being an organization which is the principal must bear the signatures of the authorized representative, of the legal representative of the shareholder and of the person authorized to attend the meeting; (c) In other cases the authorization must bear the signatures of the legal representative of the shareholder and of the person authorized to attend the meeting.”

The standard charter of companies listed at the Stock Exchanges/Securities Trading Centers enclosed to Decision No. 15/2007/QD-BTC dated 19 March 2007 issued by the Ministry of Finance (“Decision 15”) regulates that: “The authorization for a representative to attend the GMS must be made in writing on the form stipulated by the Company and must bear signatures in accordance with the following provision: (a) Authorization to represent a shareholder being an individual must bear the signatures of both that shareholder and the person authorized to attend the meeting; (b) Authorization on behalf of a shareholder being an organization which is the principal [of the power of attorney] must bear the signatures of the authorized representative, of the legal representative of the shareholder and of the person authorized to attend the meeting; (c) In other cases the authorization must bear the signatures of the legal representative of the shareholder and of the person authorized to attend the meeting.”

According to the above-mentioned regulation, only Company A has the right to issue a sample of the Power of Attorney for the representatives attending its GMS.

Therefore, the issuance of the sample of the Power of Attorney by Company B to force other shareholders to authorize its representative to attend the GMS is not in compliance with Article 101 of the Law on Enterprises 2005 and Decision 15.
 

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