Chương 4 Nghị định 59/2011/NĐ-CP: Bán cổ phần lần đầu và quản lý, sử dụng tiền thu từ cổ phần hóa

Chapter IV

INITIAL SALE OF SHARES AND MANAGEMENT AND USE OF PROCEEDS FROM EQUITIZATION

Article 36. Determination of charter capital and structure of initial shares

1. Based on the disclosed value of the state capital portion in an equitized enterprise and the production or business plan for several years following the enterprise’s transformation into a joint-stock company, the agency competent to decide on the equitization plan shall decide on the size and structure of the enterprise’s charter capital:

a/ In case the actual value of the state capital portion in the enterprise is larger than the charter capital amount necessary for the enterprise’s operation and the enterprise’s dominant shares are not necessarily held by the State, the agency competent to decide and approve the equitization plan shall adjust the charter capital according to practical requirements. The difference between the actual value of the state capital portion in the enterprise and the determined charter capital shall be remitted into the fund specified in Clause 3, Article 21 of this Decree.

b/ In case of additional issuance of stocks, the charter capital shall be the actual value of the state capital portion in the enterprise plus the value of additionally issued shares calculated based on the stock par value.

2. Based on the determined charter capital, the agency competent to decide on and approve the equitization plan shall decide on the structure of initial shares, comprising:

a/ State-held shares based on the criteria for classification of state enterprises publicized by the Prime Minister for each period.

b/ Shares to be sold to strategic investors and other investors, which must be at least equal to 25% of charter capital, except the case specified at

Point b, Clause 3 of this Article. The quantity of shares to be sold to other investors must not be lower than 50% of the above quantity of shares.

For large enterprises with a state capital portion of over VND 500 billion operating in specific fields or sectors (insurance, banking, post and telecommunications, aviation, coal mining, petroleum exploitation or mining of other rare and precious minerals) and parent companies of state economic groups or corporations, the percentage of shares auctioned for sale to investors shall be considered and decided by the Prime Minister or agencies authorized by the Prime Minister on a case-by-case basis.

c/ Shares to be sold at preferential prices to trade union organizations in equitized enterprises:

Trade union organizations in equitized enterprises may use their funds in equitized enterprises (under Clause 2, Article 16 of the Law on Trade Union; other than mobilized capital or loans) to purchase preferred shares of a quantity not exceeding 3% of the charter capital. This quantity of shares shall be held by trade union organizations and are non-transferable.

In case grassroots trade union organizations in equitized enterprises are authorized by general meetings of these enterprises’ employees and workers to use reward and welfare funds to purchase and manage these shares on their behalf, these shares may be cleared against the quantity of preferred shares which employees are entitled to purchase specified in Clause 1, Article 48 of this Decree, and trade union organizations may transfer or redeem the purchased quantity of shares from the reward and welfare funds when employees so request.

Sale prices of preferred shares sold to trade union organizations in equitized enterprises are those of preferred shares sold to employees specified in Clause 1, Article 48 of this Decree.

d/ Shares shall be sold at preferential prices to employees of enterprises under Clauses 1 and 2, Article 48 of this Decree.

3. In case the quantity of shares sold at a preferential price to employees of enterprises (at the most preferential price) is higher than the projected remaining quantity of issued shares (after subtracting the quantity of state- held shares and the quantity of shares sold to investors and the trade union under Points a, b and c, Clause 2 of this Article), it shall be handled as follows:

a/ If the enterprise is the one in which the State does not necessarily hold dominant shares, the agency competent to decide on and approve the equitization plan shall consider and decide on reduction of the quantity of state-held shares in order to increase the quantity of shares sold at a preferential price to employees.

b/ If the enterprise is the one in which the State holds dominant shares, the agency competent to decide on and approve the equitization plan shall consider and decide on the adjustment of the charter capital size in order to rationally increase the quantity of shares sold at a preferential price to employees in the enterprise or reduce the quantity of shares to be sold to strategic and ordinary investors while assuring that the quantity of shares to be sold to strategic and ordinary investors be at least equal to 20% of the charter capital.

Article 37. Public auction method

1. The public auction method is applied in case of auction to the public regardless of institutional investors, individual investors, domestic investors and foreign investors.

2. Organization of public auction:

a/ Auction at an intermediary financial institution, if the quantity of shares on sale is valued at under VND 10 billion.

If no intermediary financial institution accepts to hold an auction, the enterprise equitization steering committee shall directly hold an auction at the enterprise.

b/ Auction at a stock exchange, if the quantity of shares on sale is valued at VND 10 billion or more;

If an equitized enterprise selling a quantity of shares valued at under VND 10 billion wishes to have it auctioned at a stock exchange, the agency competent to decide on the equitization plan shall decide on this issue.

c/ The agency competent to decide on and approve the equitization plan shall decide to select a stock exchange or hire an intermediary financial institution to conduct an auction.

3. At least 20 working days before the initial sale of shares, the enterprise equitization steering committee shall coordinate with a stock exchange or an intermediary financial institution in disclosing information at the enterprise, the auction venue and in the mass media under the Ministry of Finance’s guidance.

4. A sale price determined by the public auction method is the successful bid of each investor. By this method, an investor that wins the auction at a certain bid shall purchase shares at such price, which must not be lower than the reserve price.

Article 38. Issuance underwriting method

1. The issuance underwriting method is a method of share issuance secured by a commitment of an organization with the underwriting function to fully distributing the quantity of shares to be sold to the outside, which has been approved by a competent authority.

Issuance underwriting for foreign investors must be compliant with regulations on the right of foreign investors to purchase shares from or contribute capital to Vietnamese enterprises.

In case shares are not sold out, issuance underwriters shall purchase all remaining shares at guaranteed prices already agreed in the underwriting contracts which must not be lower than the reserve prices.

2. Obligations and rights of underwriters comply with the law on securities and securities market and stock issuance underwriting contracts signed between underwriters and competent representatives of equitized enterprises.

Article 39. Direct agreement method

1. The direct agreement method is a method of selling shares to investors according to results of negotiation between the equitization steering committee or an organization authorized by the committee and each investor.

2. A sale price determined by the agreement method is that directly negotiated with each investor and not lower than the reserve price (in case of sale under prior agreement to strategic investors) or not lower than the lowest successful bid (in case of handling of unsold shares of a public auction).

Article 40. Handling of quantities of unsold shares

1. Quantities of unsold shares include:

a/ Quantity of shares which investors that win a public auction refuse to purchase.

b/ Quantity of shares not registered by investors to purchase under approved public auction plans.

c/ Quantity of shares which employees and trade union organization in enterprises refuse to purchase under approved plans.

2. The equitization steering committee may further publicly offer for sale unsold shares to investors that have participated in the auction by the direct agreement method. Investors refusing to purchase shares cannot receive back deposits made for participating in the auction.

3. If some shares remain unsold after being publicly offered for sale by the agreement method, the equitization steering committee shall report such to the agency competent to decide on and approve the equitization plan to adjust the structure of the charter capital for transformation of an enterprise with 100% state capital into a joint-stock company before organizing the first shareholders’ general meeting.

The equitization steering committee and the representative of the state capital portion in an equitized enterprise shall include in the draft charter for adoption by the first shareholders’ general meeting the right to further sell the state capital portion in the joint-stock company after this company officially commences its operation under the Law on Enterprises according to the equitization plan adjusted by the agency competent to approve it.

Article 41. Time limit for completion of sale of shares

Within 3 months after the issuance of the decision approving the equitization plan, an enterprise shall complete the sale of shares (including sale of shares by issuance underwriting and direct agreement methods).

Article 42. Management and use of proceeds from equitization

1. For the sale of the state capital portion in enterprises:

a/ The proceeds from the equitization of an enterprise shall be used to cover equitization expenses and benefits payable to laborers left redundant as a result of equitization under the State’s regulations and decisions of competent agencies. The remainder shall be handled under Point c of this Clause.

b/ If the proceeds from the equitization of an enterprise is insufficient to pay benefits to redundant laborers, it shall be added with:

- The enterprise reorganization support fund of the parent company of the state economic group or corporation or the parent company in a parent company - affiliated company conglomerate in case of equitizing a single- member limited liability company in which such parent company holds 100% of charter capital;

- The enterprise reorganization and development support in case of equitizing a single-member limited liability company in which the State holds 100% of charter capital and which is an enterprise of a ministry, ministerial-level agency, government-attached agency, provincial-level People’s Committee or parent company of a state economic group or corporation.

c/ The remaining proceeds from the sale of state capital portion (including the difference in sale prices of shares), after paying expenses specified at Point a of this Clause, shall be remitted into the fund under Clause 3, Article 21 of this Decree.

2. In case of additional issuance of shares to increase charter capital:

a/ Part of the proceeds from equitization shall be left at the enterprise in proportion to the quantity of additionally issued shares calculated based on their par value; the surplus capital amount (difference between the proceeds from equitization and total par value of additionally issued shares) shall be used to cover equitization expenses and pay benefits to redundant laborers; any deficit shall be handled under Point b, Clause 1 of this Article.

b/ The remainder (if any) shall be left at the joint-stock company in proportion to the quantity of additionally issued shares in the charter capital structure. The rest shall be handled under Point c, Clause 1 of this Article.

3. In case of sale of state capital portion in combination with additional issuance of shares:

a/ Part of the proceeds from equitization shall be left at the enterprise in proportion to the quantity of additionally issued shares calculated based on their par value; the surplus capital amount shall be used to cover equitization expenses and pay benefits to redundant laborers; any deficit shall be handled under Point b, Clause 1 of this Article.

b/ The remainder (if any) shall be handled as follows:

- The value of state-held shares sold at the par value shall be paid to beneficiary units under Point c, Clause 1 of this Article;

- The rest (if any) shall be distributed under Point b, Clause 2 of this Article.

Article 43. Management and use of the enterprise reorganization and development support fund

1. To transform the central enterprise reorganization support fund into the enterprise reorganization and development support fund for:

a/ Assisting state-owned agricultural and forestry farms, enterprises with wholly state-owned capital of ministries, ministerial-level agencies, government-attached agencies and provincial-level People’s Committees and undergoing reorganization and ownership transformation to realize policies toward redundant laborers and handle financial matters in accordance with law;

b/ Providing support funds for parent companies of state economic groups or corporations or parent companies in parent company – affiliated company conglomerates that do not have sufficient sources for paying benefits to laborers redundant as a result of reorganization or ownership transformation of member units in accordance with law.

c/ Increasing the charter capital of parent companies of state economic groups or corporations and enterprises with wholly state-owned capital as decided by the Prime Minister at the proposal of the Ministry of Finance and in accordance with law.

d/ Additionally investing capital to maintain or increase the state capital portion in other enterprises; investing in important projects and other spending items as decided by the Prime Minister.

2. Enterprise reorganization support funds at parent companies of state economic groups or corporations and parent companies in parent company - affiliated company conglomerates shall be used for:

a/ Assisting member enterprises or attached enterprise sections undergoing reorganization and ownership transformation (including merger, consolidation, dissolution, bankruptcy, equitization, assignment, sale, transformation into single-member limited liability company or revenue- generating non-business unit, etc.) to realize policies toward redundant laborers and handle financial matters in accordance with law.

b/ Increasing the charter capital of parent companies of state economic groups or corporations and parent companies in parent company - affiliated company conglomerates as decided by competent authorities.

c/ Parent companies of state economic groups or corporations and parent companies in parent company - affiliated company conglomerates may invest the rest in enterprise development as decided by the Prime Minister after obtaining opinions of the Ministry of Finance.

3. The Prime Minister shall decide on the mechanism of management and use of the enterprise reorganization and development support fund; regulate the fund sources among parent companies of state economic groups or corporations and parent companies in parent company - affiliated company conglomerates at the proposal of the Ministry of Finance. The Ministry of Finance shall manage the enterprise reorganization and development support fund under the mechanism set by the Prime Minister.

4. The Ministry of Finance shall stipulate the mechanism of management and use of enterprise reorganization support funds at parent companies of state economic groups or corporations and parent companies in parent company – affiliated company conglomerates; supervise and monitor the management and use of revenues from the equitization for supporting the enterprise reorganization and development investment in accordance with law.

Within 45 days after the end of a fiscal year, parent companies of state economic groups or corporations and parent companies in parent company - affiliated company conglomerates shall send reports on settlement of the enterprise reorganization support fund to the Ministry of Finance. These reports must contain adequate and truthful figures on revenues and expenditures; receivable and payable debts and existing problems in the management of the fund, and be enclosed with the certification of the fund balance by a commercial bank at which the fund account is opened.

Failure of leaderships of parent companies of state economic groups or corporations and parent companies in parent company - affiliated company conglomerates (the members’ council and directorate) to fully and promptly report on the fund settlement shall be regarded as a failure to fulfill their duties and they shall bear responsibility under the current regulation on supervision and classification of enterprises.

5. An equitized enterprise shall open a separate account at a commercial bank for freezing the proceeds from the sale of shares.

Within 15 working days after the completion of the sale of shares, the equitization steering committee shall determine the money amount to be left at the enterprise (covering amounts payable to employees and equitization expenses under the approved equitization plan) and the amount remittable into the fund (after subtracting amounts allowed to be paid according to the approved cost estimate) for transfer from the frozen account to the enterprise and the fund under Clause 3, Article 21 of this Decree.

6. Within 15 working days after receiving a financial statement audited at the time of official transformation into a joint-stock company, the agency competent to decide on and approve the equitization plan shall assume the prime responsibility for, and coordinate with the financial agency in, examining and handling financial matters at the time of official transformation into a joint-stock company under Article 21 of this Decree.

Within 60 working days after the grant of first-time enterprise registration certificates, ministries, ministerial-level agencies, government-attached agencies, provincial-level People’s Committees, member councils of parent companies of state economic groups or corporations and parent companies with wholly state-owned capital shall direct and urge the further remittance of proceeds from the sale of shares into the fund under Clause 3, Article 21 of this Decree.

Past the time limit of 60 working days from the date of grant of first-time enterprise registration certificates, if equitized enterprises still fail to remit proceeds from the sale of shares into the fund under Clause 3, Article 21 of this Decree, they shall additionally bear interests calculated at the latest prime interest rate announced by the State Bank of Vietnam on the late remitted amount for the period of late remittance. Past 3 months after being granted first-time enterprise registration certificates, enterprises shall additionally bear interests calculated at the interest rate applicable to overdue loans on the late remitted amount for the period of late remittance. Equitized enterprises are not allowed to account such fines as reasonable expenses upon calculating enterprise income tax and shall use profits after enterprise income tax to cover them if compensations paid by members’ councils, boards of directors and other collectives and individuals responsible for the late remittance (if any) are not enough.

7. The agency competent to decide on and approve equitized plans shall direct equitization steering committees and equitized enterprises in fully and promptly reporting on the management and use of proceeds from the equitization to the Ministry of Finance for summarization and reporting to the Prime Minister.

Article 44. Charters of joint-stock companies

1. The charter of a joint-stock company shall be drafted by the enterprise in coordination with the equitization consultancy organization under the direction by the equitization steering committee and notified to investors before the sale of shares, containing the provision permitting the further sale of the state capital portion in the enterprise after the equitization under Clause 3, Article 40 of this Decree. The draft charter of a joint-stock company must not be against the Law on Enterprises and relevant laws.

2. The charter of a joint-stock company will be adopted by the first shareholders’ general meeting when it is voted for by at least 65% of total capital-contributing or share-purchasing investors attending the meeting.

Article 45. Shareholders’ general meeting and first-time enterprise registration

Within 30 working days after completing the sale of shares, an equitized enterprise shall organize the first shareholders’ general meeting for transforming the enterprise into a joint-stock company and make enterprise registration in accordance with law.

A dossier of enterprise registration must also contain the decision of the agency competent to decide on the equitization plan on transformation into a joint-stock company, the decision of a competent agency on appointment of the representative for the state capital portion in the joint-stock company (if any) and the joint-stock company’s charter with the signature of the joint-stock company’s at-law representative.

Article 46. Appointment of representatives for state capital portions in equitized enterprises

1. For equitized enterprises with state capital portions continued to be invested in joint-stock companies, agencies assigned to exercise the rights of the owner of state capital portions in enterprises shall appoint persons to act as representatives for capital portions in these enterprises.

2. A person appointed to act as a representative for the state capital portion in an equitized enterprise must fully meet the following criteria:

a/ Being a Vietnamese citizen permanently residing in Vietnam. Having good health, ethics and sense of law observance and being honest, upright and knowledgeable about law.

b/ Possessing a university degree, having been professionally trained in corporate finance or a business line of the enterprise with state investment capital, and being capable of conducting business operation and managing the enterprise.

c/ Not being banned from holding a post of corporate manager or executive as specified at Points e, f and g, Clause 2, Article 13 of the Law on Enterprises.

d/ Not being a person who has managed and administered an enterprise with 100% state capital which has suffered business losses and therefore lost the state capital portion.

e/ Other criteria not contrary to the company charter.