Luat Viet

:: Question :: I am the Head of Inspection Committee of A Joint Stock Company. Due to some subjective and objective reasons and full performance of responsibility and role of a Head of Inspection Committee to ensure the maximum interest of shareholders, I would like to authorize another person to be the Head of Inspection Committee for a fixed period of time. Is this permitted by the law? How is procedure?

Answer:

According to Clause 2 Article 121 of the 2005 Law on Enterprises (LOE), “Rights and obligations of the Head of the Inspection Committee shall be defined in the company’s charter”. In addition, LOE does not permit nor prohibit the Head of Inspection Committee to authorize another person to assume his position.
Therefore, the authorization of Head of Inspection Committee of A Joint Stock Company to another to assume his position shall in accordance with one of the following options:
Firstly, the Head of Inspection Committee shall not have the right to authorize to another to undertake his position if the charter of A Joint Stock Company regulates that: the Head of Inspection Committee is not entitled to authorize to another to undertake his position.
Secondly, the Head of Inspection Committee shall have the right to authorize to another to undertake his position if the charter of A Joint Stock Company: (i) regulates in detail that the Head of Inspection Committee is entitled to authorize to another to undertake his position, or (ii) has no regulation on such authorization. In case where the charter of the Company has specific regulations on authorization of the Head of Inspection Committee to another, such authorization must comply with the regulations. In case where the charter of the Company does not regulates on authorization of the Head of Inspection Committee to another, in principle, the Head of Inspection Committee is able to authorize to another undertake his position in accordance with the regulations of the 2005 Civil Code on authorization.
If the Head of Inspection Committee is entitled to authorize to another to undertake his position, in order to ensure maximum legitimate interest of the company and its shareholders, the charter of Company (if any) should have regulation on requesting the assignee to satisfy abilities meeting requirements of the Head of Inspection Committee or at least satisfy the criteria and conditions of a members of Inspection Committee as provided in Article 112 of the LOE: “Being at least of twenty one (21) years of age, with a full capacity of civil acts and not falling within the scope of subjects not permitted to establish and manage companies in accordance with the Law on Enterprises. Not being wife or husband, father, adoptive father, mother, adoptive mother, children, adopted children, siblings of any member of the Board of Management, the Director or General Director and other managers”. The authorization should be in writing. Of which, the assignee shall only execute the rights and duties within authorized scope and term and responsible before the Head of Inspection Committee. The Head of Inspection Committee shall be ultimately and directly responsible before the General Meeting of Shareholders on executing the assigned mission.
 

• » 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)