Luat Viet

:: Question :: We are a group of small investors holding the shares in a number of public companies. As known, on June 24, 2009, State Securities Commission (SSC) issued Official Letter No. 1234/UBCK-QLPH on checking the charter of public companies. This Official Letter enforces public companies to check their Charter and plan to adjust any regulations contrary to the current law during the annual General Meeting of Shareholders (GMS) of year 2009. After this term, any public company whose charter still contraries to the law shall be punished according to the law. Please kindly advise how the laws deal with this case?

Answer:
According to Article 79 and articles from Article 96 to Article 127 of the 2005 Law on Enterprise (LOE) and Article 28 of the Law on Securities 2006 (LOS), when making and drafting the regulations of their charter, public companies must ensure that such regulations in the Charter must comply with the law and ensure to protect legal rights and interests of shareholders. However, currently, the charter of some public companies does not comply with the laws, especially regarding the regulations regarding right attending GMS of investors.
Clause 1, Article 28 of Law on Securities stipulates: “Public companies must comply with the provisions on corporate management in the Law on Enterprises”. Thus, current regulations in the charters of public companies contrary to law are considered as breach of the LOE and the LOS on corporate management.
Point d, Clause 2, Article 10 of Decree No. 36/2007/ND-CP dated on March 08, 2007 of Government on penalties for administrative offences in securities and securities market sector stipulates: “A fine of from five million to ten million VND shall apply to a public company which fails to comply with the provisions of the LOE regarding corporate management as required by Article 28.1 of the Law on Securities”. Therefore, any public companies delaying in amending, supplementing or refusing to amend, supplement above-mentioned regulation before permitted time limitation (annual GMS year 2009) is considered as breach of LOE and LOS on corporate management. Such breach can be punished in accordance to the law. In addition to that, any public companies committing such breach shall be applied measures of compulsory compliance with law for remedying consequences (to be forced to amend, supplement the charter complying with the law).
 

• » 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)