Luat Viet

:: 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?

Answer:

At present, as stipulated by laws, the term of the Board is five (5) years, the term of members of the Board and the Commission does not exceed five (5) years. So, the Enterprise Law (the Law) does not mention the term’s renewal of the Board and the Commission exceeding five (5) years.

However, the Law allows the Board and the Commission to continue their term while the new Board and Commission is being voted and received duties. This means that, indirectly, the term of the Board and the Commission is automatically renewed without permission.

Paragraph 3 Article 121 of the Law stipulates: “If at the end of the term the new Commission is not voted, the due Commission continues its rights and duties until the new Commission is voted and receives duties”.

Paragraph 2 Article 109 of the Law stipulates: “The Board of the term which has just ended continues operation until the new Board is voted and takes over the job”.

In addition, it should be noted that according to paragraph 3 (b) Article 79 of the Law, in case the term of the Board exceeded six months but the new Board is not voted, the shareholders or groups of shareholders owning over 10% of the total common share in the continuous period of six months or a smaller ratio as stipulated by the Company’s Charter is entitled to request the convention of the Meeting to vote for the new Board.

2. With related to the voting procedure of the Board and the Commission

If the Company’s Charter does not otherwise stipulate, based on paragraph 2(d) Article 104 of the Law, the voting of the new Board and Commission shall be in the form of voting at the Meeting and shall not be taken opinions of the Meeting in writting. According to Resolution No. 71/2006/QH11 of the National Assembly dated November 29, 2006 approving the Protocol for the accession to the Agreement founding the World Trade Organisation (WTO) of Vietnam, this Decision will be adopted if the shareholders representing at least 51% of the total number of votes of all shareholders participating in the Meeting agree unless otherwise stipulated by the Charter.

• » 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 :: 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)
• » 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)