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.
 

• » Question :: When shareholding companies proposes to issue more shares to increase their Charter Capital, pursuant to laws and regulations of Vietnam, which percentage between the capital proposed to be issued and the current Charter capital? Is there any limitation on the capital proposed to be increased within a year? (16/03/2010)
• » Question :: Some enterprises have recently issued convertible bonds in the Stock Market. What is the convertible bond and conditions to issue convertible bonds ? (07/03/2010)
• » Question :: Shares of my Company are listed on the HOSE. The enterprise intended to increase its charter capital under the form of issuing additional shares to offer investors in 2009. Nevertheless, when the enterprise registered the dossier to increase its charter capital with the competent Planning and Investment Department, this competent authority did not accept the vote counting minutes, which collects the shareholders’ written opinion. As a result, the Planning and Investment Department requested the enterprise to supply the copy of the Minutes of the General Meeting of Shareholders of the Company. Please kindly advise how the law regulates this case? (04/03/2010)
• » Question :: We are a bank accepted by the State Securities Commission (SSC) to issue share to public to increase the charter capital. Under the applicable regulations, the invested capital by the Investors to purchase shares of an enterprise must deposit in an escrow bank account at a commercial bank (CB). Please kindly advise whether we are permitted to open such bank account at our bank or not? (24/01/2010)
• » Question :: Under the event that the Investor sells the securities which are on their ways to the account of the Investor, is it considered a short sell or not ? (20/01/2010)