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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 :: 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? (19/05/2009)
- » Question :: Upon having been approved at principle on establishment by the State Securities Commission of Vietnam, a security company (“SC”) sold its shares to parties other than founding shareholders. After that, the SC could not be established as the founding shareholders did not continue to contribute their capital. In this case, how can we deal with those sold shares? (04/05/2009)
- » Question :: An electric construction joint stock company is a State-Owned-Enterprise converting into Joint Stock Company since October 2003, a part of its employees was entitled to buy shares paid by installments within 10 years. Currently, it has become a publicly company and on the way of listing its shares in Stock Exchange Market. Thus, it is necessary to amend its organizational and operational Charter in accordance with Decision No. 15/2007/QD-BTC dated 19 March 2007 issued by the Minister of Finance. According to the Article 8.2 of the standard form of the Company’s Charter (“Standard Charter”):“Shares that have not been paid fully yet shall not be entitled to transfer and benefit dividends”. Hence, how could this Company deal with the shares paid by installments by its employees? (04/05/2009)
- » Question :: What happen if a securities company (the “SC”) or a fund management company (the “FMC”) fails to satisfy conditions on the charter capital in accordance with Decree No. 14/2007/ND-CP (“Decree 14”) providing detailed guidelines for implementing some articles of the Law on Securities? Which sanctions can be applied to such failure? (21/04/2009)
- » Question :: I have 8000 shares of Company A with the market price of approximately 100,000,000 VND (One hundred million Vietnamese Dong). Due to my negligence, I lost my shareholder’s book. Can I have the right to request for re-issurance of the shareholder’s book or not and what are the procedures to re-issue it? (21/04/2009)