Chương 1 Nghị định 187/2004/NĐ-CP: Những quy định chung

Chapter I

GENERAL PROVISIONS

Article 1. The objectives of and requirements for conversion of State owned companies into shareholding companies (hereinafter referred to as equitization) shall be:

1. To convert those State owned companies in which it is not necessary for the State to continue to hold one hundred (100) per cent of charter capital into shareholding companies with many owners; to mobilize capital from both domestic and foreign individuals, economic organizations and social organizations for the purpose of increasing financial capacity and renovating technology and management methods in order to raise the efficiency and competitiveness of the economy.

2. To ensure harmony between the interests of the State, the enterprise, the investor and employees of the enterprise.

3. To ensure public notification and transparency on market principles; to overcome the situation of equitization taking place in secret within enterprises; and to ensure that development runs parallel with development of the capital market and the securities market.

Article 2. Applicable subjects

1. This Decree shall apply to State owned companies not in the category of those in which it is necessary for the State to hold one hundred (100) per cent of charter capital, which shall undergo equitization, comprising: State corporations (including State commercial banks and State finance institutions); independent State owned companies; enterprises which are members of corporations, which maintain an independent cost accounting system and for which the State made the decision on investment and establishment; and dependently accounting affiliates of State corporations (hereinafter all referred to as enterprises undergoing equitization).

The Prime Minister of the Government shall make decisions from time to time on the list of State owned companies in which it is necessary for the State to hold one hundred (100) per cent of charter capital.

2. Equitization of the State owned companies prescribed in clause 1 of this article may be carried out when they still have State capital (excluding the value of land use rights) after deducting the value of assets not required to be used, assets awaiting liquidation, losses caused by [annual] losses, reduction in the value of assets, bad debts and equitization expenses.

3. Equitization of dependently accounting affiliates of State corporations prescribed in clause 1 of this article may only be carried out when:

(a) The dependently accounting affiliate of an enterprise satisfies all conditions for maintaining an independent cost accounting system;

(b) It does not cause difficulties or have adverse consequences on the production and business results of the enterprise or the remaining part of the enterprise.

Article 3. Forms of equitization of State owned companies

1. Maintaining the existing State owned capital in an enterprise and issuing shares in order to mobilize additional capital applicable to enterprises to be equitized which have a requirement to increase charter capital. The level of additional capital to be mobilized shall depend on the scale of the company undergoing equitization and its capital requirements. The structure of charter capital in a company undergoing equitization shall be set out in the equitization plan.

2. Selling part of the existing State owned capital in an enterprise, or combining the sale at discount of part of the existing State owned capital in the enterprise with issuing shares in order to mobilize additional capital.

3. Selling the whole part of the existing State owned capital in an enterprise, or combining the sale of the whole part of the existing State owned capital in the enterprise with issuing shares in order to mobilize additional capital.

Article 4. Who may purchase shares and conditions for purchasing

1. Economic organizations and social organizations operating pursuant to the law of Vietnam and individuals being Vietnamese residing in Vietnam (hereinafter all referred to as domestic investors) shall have the right to purchase an unlimited number of shares in an equitized enterprise.

2. Enterprises with foreign owned capital and foreign individuals lawfully operating in Vietnam and Vietnamese residing overseas (hereinafter all referred to as foreign investors) shall have the right to purchase shares in an equitized enterprise in accordance with the law of Vietnam.

Foreign investors wishing to purchase shares in an equitized enterprise must open an account at an organization providing payment services which is currently operating in the territory of Vietnam, and must comply with the law of Vietnam. All activities of purchasing and selling shares, receiving and using dividends and other income from investments in the purchase of shares must be conducted via that account.

Article 5. Both domestic investors and foreign investors must purchase shares in an equitized enterprise in Vietnamese dong.

Article 6. Equitization expenses

The expenses of conducting equitization shall be deducted from the existing State owned capital in the enterprise undergoing equitization. The contents and level of equitization expenses shall be implemented in accordance with guidelines issued by the Ministry of Finance.

Article 7. Shareholding, shares and founding shareholders

1. Charter capital divided into a number of equal parts is referred to as shareholding. The par value of each unit of shareholding shall be uniformly regulated at ten thousand (10,000) Vietnamese dong.

2. A share means a certificate issued by a shareholding company confirming the ownership of one or a number of shares of a shareholder who contributes capital to the company. Shares may be named or bearer shares but must contain all of the basic items stipulated in article 59 of the Law on Enterprises.

The Ministry of Finance shall provide guidelines on unified sample forms for shares in order for enterprises to print and manage them in accordance with regulations.

3. Founding shareholders of an equitized enterprise means shareholders who satisfy all of the following conditions:

(a) They participate in approving the first charter of the shareholding company;

(b) They together hold at least twenty (20) per cent of the number of ordinary shares which are freely transferable;

(c) They comply with the provisions of the charter of the company on ownership of a minimum number of shares.

The general meeting of shareholders shall decide the minimum number of shares which each founding shareholder must own, and the minimum number of founding shareholders, and these items shall be provided for in the charter of the company.

Article 8. Principles for inheritance of rights and obligations by a shareholding company after conversion from a State owned company

1. Equitized enterprises shall be responsible for restructure, for employing the maximum number of employees as at the time of equitization, and for resolving regimes for employees in accordance with current regulations.

A shareholding company shall be responsible to inherit all obligations in respect of employees from the converted State owned company; and shall have the right to select, arrange and employ employees and to co-ordinate with the relevant authorities in resolving regimes for employees in accordance with regulations.

2. A shareholding company shall be entitled, on its own initiative, to use the whole of the assets and capital funds which have been equitized in order to organize production and business; and shall inherit all interests, obligations and liabilities of the State owned company prior to equitization, and shall have other rights and obligations in accordance with law.