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question and answer
:: 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?
Answer:
Pursuant to Article 21.3 of the Law on Securities 2006, the purchase monies for securities must be paid into an escrow bank account and retained until completion of the offer tranche and until a report has been made to the SSC. However, there is no specific regulation to define at which bank the Investors can open their escrow bank account. Pursuant to Article 65 of the Law on Credit Institutions, the Credit Institution is permitted to open the deposit bank account at the State Bank of Vietnam (SBV) or at other credit institutions. Therefore, there is no legal basis for one credit institution to open its bank account at it self. In other words, there is no legal basis for a bank to open an escrow bank account at itself.
In practice, in case banks request to issue additional shares, they must open their escrow bank account in the SBV or another CB in order to receive the purchase monies. In your specific case, it is advisable that you should consult from the SBV to confirm whether your bank is permitted to open an escrow bank account at itself or not.
orther:
- » 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? (22/07/2009)
- » Question :: Company A is a Shareholder (“Shareholder A”) owning less than 5% of the shares in Company B – a joint stock company (Company B). Under an agreement between Shareholder A and Company B, Shareholder A shall have the right to nominate one representative to be the Chief of the Inspection Committee (Inspection Committee) in the Company B. Then, Company B shall elect such representative to be Chief of Inspection Committee. From a legal point of view, does this agreement break the law? While all the decisions still waiting for the approval of the General Meeting of Shareholders (GMS), what will we have to do if the 2009 GMS does not approve this agreement because of subjective idea of the Company B? In the agreement between both parties, which terms and conditions (if any) should we offer to guarantee our interest? (01/07/2009)
- » Question :: In the process of conversion of enterprises with 100% state owned capital into shareholding companies, how to choose strategic shareholders of such shareholding companies? (03/06/2009)
- » Question :: I am a shareholder of Joint Stock Company A, I would like to pose a question: “That Company A actively develops new projects out of Resolution of General Shareholders’ Meeting of 2008, including a series of projects in real estate is itillegal?” Which regulations should be complied for the legality in this case? Note that Article 24.4.7 of the Charter of this Company provided that: Board of Management approve all investment out of the operating plan and annual budget of the Company with the value exceeding 10% of annual operating budget. (25/05/2009)
- » Question :: In order to request to cancel the resolutions of General Meeting of Shareholders (GMS), in case the order and procedures for convening the GMS did not comply with Law on Enterprises and the charter of the company, how should shareholders or shareholder group do in this case? (19/05/2009)