Nghị định 69/2014/NĐ-CP về tập đoàn kinh tế nhà nước và tổng công ty nhà nước

DECREE

ON STATE ECONOMIC GROUPS AND STATE CORPORATIONS

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 29, 2005 Enterprise Law;

At the proposal of the Minister of Planning and Investment,

The Government promulgates the Decree on state economic groups and state corporations.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree provides:

1. The establishment and re-organization of state economic groups and state corporations and termination of operation in the form of state economic group or state corporation (below referred to as economic groups or corporations).

2. The organization, operation, management and administration in economic groups and corporations.

3. The management and supervision by the state owner of economic groups and corporations.

Article 2. Subjects of application

1. This Decree applies to:

2. Economic groups and corporations with parent companies organized in the form of state-owned single-member limited liability company or with parent companies being joint- stock companies or limited liability companies with two or more members with controlling shares or capital contributions of the State.

3. Organizations and individuals related to the establishment and re-organization of economic groups and corporations, termination of operation in the form of economic group or corporation, and management and supervision by the state owner of economic groups and corporations.

Article 3. Interpretation of terms

In this Law, the terms below shall be construed as follows:

1. Main business lines of an enterprise means the business lines which are determined by the enterprise’s owner on the basis of the enterprise’s investment objectives and development

Strategy and assigned to the enterprise to conduct upon its establishment and throughout its operation.

2. Business lines related to the main business lines of an enterprise (below referred to as related business lines) means the business lines supporting, or deriving from, the main business lines on the basis of the conditions and advantages of the main business lines or utilizing the advantages and strengths of the main business lines and directly serving the main business lines.

3. Business lines unrelated to the main business lines of an enterprises (below referred to as unrelated business lines) means the business lines neither deriving nor developed from the main business line or related business lines.

4. Related subjects of a parent company means organizations and individuals that have direct or indirect relations with the parent company as prescribed in Clause 17, Article 4 of the Enterprise Law.

5. Controlling rights of an enterprise over another enterprise include at least one of the following rights:

a/ Right of the sole owner of the other enterprise;

b/ Right of shareholders that own controlling shares or capital contributors that own controlling capital contributions at the other enterprise;

c/ Right to directly or indirectly appoint a majority or all members of the Board of Directors or Control Board and general director (director) of the other enterprise;

d/ Right to directly or indirectly decide on the approval, amendment and supplementation of the charter of the other enterprise;

dd/ Right to directly or indirectly decide on business strategies and plans of the other enterprise;

e/ Other cases of control as agreed between the controlling enterprise and controlled enterprise and specified in the charter of the controlled enterprise.

6. Member enterprises of an economic group or a corporation (below referred to as member enterprises) means enterprises in which the parent company or level-II enterprises own 100% of charter capital or hold controlling rights.

Article 4. Economic groups, corporations

1. An economic group is a group of companies, including the parent company, member enterprises and affiliate companies, which meets the conditions prescribed in Clause 3, Article 9 of this Decree.

2. A corporation is a group of companies, including the parent company, member enterprises and affiliate companies, which meets the conditions prescribed in Clause 4, Article 9 of this Decree.

3. An economic group or a corporation has at most 3 levels of enterprises and is structured as follows:

a/ The parent company (below referred to as level-I enterprise) is an enterprise in which the State owns 100% of charter capital or holds controlling rights. The parent company shall be organized in the form of state-owned single-member limited liability company or joint-stock company or limited liability company with two or more members with controlling shares or capital contributions of the State; play as the core, direct and control member enterprises of the economic group or corporation;

b/ Subsidiary companies of the level-I enterprise (below referred to as level-II enterprises) are enterprises in which the parent company holds the controlling rights. A level-II enterprise shall be organized in the form of single-member limited liability company, in case the parent company owns 100% of its charter capital, or joint-stock company or limited liability company with two or more members, in case the parent company holds the controlling rights over it;

c/ Subsidiary companies of level-II enterprises (below referred to as level-III enterprises) means enterprises in which level-II enterprises hold the controlling rights. A level-III enterprise shall be organized in the form of single-member limited liability company, in case the level-II enterprise owns 100% of its charter capital, or joint-stock company or limited liability company with two or more members, in case the level-II enterprise holds the controlling rights over it;

d/ Affiliate companies are companies in which the parent company’s or subsidiary companies’ shares or capital contributions are below the controlling level or companies with no capital contributions of the parent company or subsidiary companies, and which voluntarily enter into the affiliation through affiliation contracts and have long-term relations in terms of economic benefits, technology, market and other services with the parent company or subsidiary companies of the economic group or corporation. Affiliate companies shall be organized in the form of limited liability company or joint-stock company.

4. The parent company and member enterprises have the legal person status; have their own capital and assets; and have the right to own, use and dispose of their assets in accordance with law and the common agreement of the economic group or corporation. The State is the owner of state capital directly invested in the parent company. The parent company is the owner of capital amounts it invests in their subsidiary companies and affiliate companies.

Article 5. Names and business registration

1. Economic groups or corporations have their own names and brands. Persons who decide on the establishment of economic groups or corporations shall decide on the names of such economic groups or corporations and their parent companies established under this Decree.

2. Parent companies and member enterprises shall make business registration in accordance with law. The naming of member enterprises organized in the form of joint-stock company or limited liability company must comply with the Enterprise Law and relevant laws.

Economic groups and corporations do not have the legal person status and are not required to make business registration but shall notify business registration agencies of their establishment and re-organization, change in the number of their member enterprises or rates of their capital contributions at member enterprises, and termination of operation in the form of economic group or corporation; and notify the competition administration agency of their economic concentration as prescribed in Sections 3 and 4, Chapter II of the Competition Law.

The order and procedures for notification of the establishment and re-organization, change in the number of member enterprises or rates of capital contributions at member enterprises, and termination of operation in the form of economic group or corporation must comply with the guidance of the Ministry of Planning and Investment.

Article 6. Party organizations and socio-political organizations in economic groups and corporations

1. The Communist Party of Vietnam’s organizations in economic groups and corporations shall operate under the Constitution, law and the Statute of the Communist Party of Vietnam.

2. Socio-political organizations in economic groups and corporations shall operate under the Constitution, law and their statutes in accordance with law.

3. Economic groups and corporations shall create conditions and provide .support for Party organizations, trade union organizations and other socio-political organizations to operate under law and their statutes.

Article 7. Application of relevant laws and treaties

1. The establishment, organization, operation, management and supervision of economic groups and corporations must comply with this Decree, the Enterprise Law, the Competition Law and other relevant laws. In case of inconsistencies between this Decree and specialized laws, the provisions of such specialized laws prevail.

2. In case a treaty to which the Socialist Republic of Vietnam is a contracting party contains provisions different from those of this Decree, the provisions of such treaty prevail.

Chapter II

ESTABLISHMENT AND RE-ORGANIZATION OF ECONOMIC GROUPS AND CORPORATIONS AND TERMINATION OF OPERATION IN THE FORM OF ECONOMIC GROUP OR CORPORATION

Article 8. Establishment of economic groups and corporations

1. Economic groups and corporations shall be established on the basis of state corporations or groups of companies which satisfy the conditions prescribed in Article 9 of this Decree.

2. Economic groups and corporations shall be established in the following forms:

a/ Merger or consolidation of enterprises;

b/ Redemption of shares or capital contributions;

c/ Investment or contribution as capital of tangible or intangible assets;

d/ Other lawful forms of affiliation as agreed by enterprises themselves.

Article 9. Conditions for establishment of economic groups and corporations

1. The Government shall only consider selecting corporations to act as the core in forming economic groups when the conditions prescribed in Clause 2 of this Article are fully met and consider establishing new economic groups or corporations when the conditions prescribed in Clause 3 or 4 of this Article are fully met.

2. A state corporation selected to act as the core in forming an economic group must fully satisfy the following conditions:

a/ Having conducted business at a profit for three (3) consecutive years preceding the year when it is selected;

b/ Having its financial status assessed by its owner as being at a safe level;

c/ Having human resources with qualifications and a productivity higher than the average levels of other enterprises operating in the same sector or field;

d/ Possessing advanced equipment and technologies; modem management;

dd/ Effectively managing its shares and capital contributions at other enterprises;

e/ Operating nationwide and overseas.

3. A to-be-established economic group must satisfy the following conditions:

a/ Its main business lines fall into the sectors and fields which produce products or provide services of special importance to national economic security; create the foundation for national economic infrastructure; and create a driving force for increasing the competitiveness of enterprises and the whole economy. The Prime Minister shall determine business sectors and fields eligible for consideration for establishment of economic groups in each period;

b/ The economic group’s parent company must meet the following conditions:

- Having a charter capital of at least VND 10 trillion. In case the parent company is organized in the form of joint-stock company or limited liability company with two or more members, state capital must account for at least 75% of its charter capital. The Prime Minister shall consider and decide on the case in which a parent company’s charter capital or the ratio of state capital to its charter capital is lower than the prescribed level.

- Having human resources with sufficient qualifications, experiences and capabilities to operate its main and related business lines and manage capital invested in, govern, administer and coordinate operations of, subsidiary and affiliate companies.

- Being capable of using technological know-how and making use of its brand name and markets to control subsidiary companies and enter into affiliation with other affiliate companies.

- Possessing financial resources or having feasible plans to mobilize financial resources to ensure sufficient capital for investment in subsidiary and affiliate companies.

c/ The economic group must have at least 50% of its subsidiary companies operating in key stages or steps of its main business lines and fields and the total value of the parent company’s shares and capital contributions at these companies must account for at least 60% of the parent company’s total investment capital at subsidiary and affiliate companies.

Subsidiary companies with charter capital wholly owned by the parent company must be companies which are established to develop and hold technological know-how directly serving the performance of main tasks and business lines of the parent company.

4. A to-be-established corporation must meet the following conditions:

a/ Its main business lines fall into the sectors and fields which produce or provide important products or services; create the foundation for the development of a sector or region; and create a driving force for raising the competitiveness of enterprises, a sector or a region. The Prime Minister shall determine business sectors and fields eligible for consideration for establishment of corporations in each period;

b/ The parent company must meet the following conditions:

- Having a charter capital of at least VND 1,800 billion. In case the parent company is organized in the form of joint-stock company or limited liability company with two or more members, state capital must account for at least 65% of its charter capital. The Prime Minister shall consider and decide on the case in which the parent company’s charter capital or the ratio of state capital to its charter capital is lower than the prescribed level.

- Having human resources with sufficient qualifications, experiences and capabilities to operate its main and related business lines; manage capital invested in, govern, administer and coordinate operations of, subsidiary and affiliate companies.

- Possessing financial resources or having feasible plans to mobilize financial resources so as to ensure sufficient capital for investment in subsidiary and affiliate companies.

c/ The corporation must have at least 50% of its subsidiary companies operating in key steps or stages of its main business lines and the total value of the parent company’s shares and capital contributions at these companies must account for at least 60% of the parent company’s total investment capital in subsidiary and affiliate companies.

Subsidiary companies with charter capital wholly owned by the parent company must be companies established to develop and hold technological know-how directly serving the performance of main tasks and business lines of the parent company.

Article 10. Order and procedures for establishment of economic groups and corporations

1. Based on the conditions prescribed in Article 9 of this Decree, the Prime Minister shall decide on parent companies in corporations and groups of companies permitted to elaborate schemes on establishment of economic groups or corporations in each period at the proposal of line ministries or People’s Committees of provinces and centrally run cities (below referred to as provincial-level People’s Committees) and opinions of the Ministry of Planning and Investment.

2. The Members’ Councils or representatives who are authorized to perform the rights of shareholders and the state member (below referred to as authorized representatives) at the parent companies shall elaborate schemes on establishment of economic groups or corporations and submit them to line ministries or provincial-level People’s Committees for opinion and then finalize the draft schemes.

3. A dossier of establishment of an economic group or a corporation must comprise:

a/ A submission paper on the scheme on establishment of the economic group or corporation;

b/ The scheme on establishment of the economic group or corporation.

The scheme must have the following principal details: the necessity for and purpose of the establishment of the economic group or corporation; the actual situation of organization, management and operation of the corporation or group of companies; method of forming, and structure of, the economic group or corporation; methods of establishing, maintaining and developing forms of affiliation between the parent company and member enterprises and among member enterprises; mode of establishing the parent company, including also a plan on equitization of the parent company, in case of establishing the economic group concurrently with equitizing the parent company; the legal form, name, organizational and managerial structure of the parent company; names, legal forms and organizational structures of member enterprises; main business lines and related business lines; structure of investment in the business lines of the economic group or corporation; plan on use and development of leading and managerial personnel in the parent company; personnel to perform the function of representing the parent company as the owner at member enterprises; business plan of the economic group or corporation; analysis of effectiveness indicators of the establishment of the economic group or corporation compered to the period before establishment; assessment of socio-economic impacts and the conformity of the establishment of the economic group or corporation with sectoral and regional development master plans and strategies; report on the completion of procedures for economic concentration in accordance with the competition law; organization, operation, management and administration in the economic group or corporation; information system and mechanisms to ensure smooth communication within the economic group or corporation; and scheme implementation roadmap and plan.

c/ The draft charter of the parent company.

4. Appraisal of schemes:

a/ In case of establishing an economic group:

- The line ministry shall make at least eight (8) original sets of the dossier of request for establishment of an economic group and send them to the Ministry of Planning and Investment.

- The Ministry of Planning and Investment shall consult the Ministries of Finance; Labor, War Invalids and Social Affairs; and Home Affairs, the provincial-level People’s Committee of the locality where the parent company is located, and at least three (3) independent economic experts.

Within thirty (30) working days after receiving a set of the dossier of request for establishment of the economic group, related agencies and persons shall send to the Ministry of Planning and Investment their written opinions on the contents falling within the scope of their functions and task.

- Within fifteen (15) working days after receiving written opinions of related agencies, the Ministry of Planning and Investment shall submit the dossier and appraisal report to the Prime Minister for consideration and decision.

b/ In case of establishing a corporation:

- The line ministry or provincial-level People’s Committee shall make five (5) original sets of the dossier of request for establishment of a corporation and consult the Ministries of Planning and Investment; Finance; Labor, War Invalids and Social Affairs; Home Affairs; and the line ministry (in case the to-be-established corporation will be attached to a provincial-level People’s Committee) or the provincial-level People’s Committee (in case the to-be-established corporation will be attached to a line ministry).

- Within fifteen (15) working days after receiving a set of the dossier of request for establishment of the corporation, related agencies shall send to the line ministry (in case the to-be-established corporation will be attached to a line ministry) or the provincial-level People’s Committee (in case the to-be-established corporation will be attached to a provincial-level People’s Committee) their written opinions on the contents falling within the scope of their functions and tasks.

- Within fifteen (15) working days receiving written opinions of related agencies, the line ministry or provincial-level People’s Committee shall elaborate an appraisal report explaining the assimilation of opinions of related agencies, finalize the dossier and submit it to the Prime Minister for consideration and decision.

5. Approval of schemes:

Based on the conditions prescribed in this Decree and appraisal reports, the Prime Minister shall approve schemes on establishment of economic groups and the policy on establishment of corporations under ministries or provincial-level People’s Committees.

6. Implementation of schemes on establishment of economic groups and corporations:

a/ For economic groups:

- In case of establishing an economic group with the parent company operating in the form of state-owned single-member limited liability company: The Prime Minister shall decide on the establishment of the parent company; appoint the chairman of the Members’ Council of the parent company at the proposal of the line ministry after obtaining the appraisal opinion of the Ministry of Home Affairs. The line minister shall appoint members of the Members’ Council, general director, and specialized controllers of the parent company. The Minister of Finance shall appoint financial controllers of the parent company.

- In case of establishing an economic group with the parent company operating in the form of joint-stock company or limited liability company with two or more member with controlling shares or capital contributions of the State and case of establishing an economic group concurrently with transforming the parent company into a joint-stock company or limited liability company with two or more members with controlling shares or capital contributions of the State: The line minister shall appoint a person to act as the authorized representative at the parent company; and nominate candidates for the posts of chairman and member of the Board of Directors or Members’ Council of the parent company.

- The Members’ Council or authorized representative and persons appointed to join the Board of Directors of the parent company shall exercise the controlling rights so as to set orientations for the parent company’s Shareholders’ General Meeting and Members’ Council or Board of Directors to further implement the scheme; develop forms of affiliation between the parent company and subsidiary companies and among member enterprises in the course of implementation of the scheme, and throughout the operation of the economic group. The Members’ Council or authorized representative at the parent company shall report on the implementation of the scheme and arising difficulties and problems to the owner and coordinate with related agencies in implementing the scheme.

b/ For corporations:

- In case of establishing a corporation with the parent company operating in the form of state-owned single-member limited liability company: The line minister or provincial-level People’s Committee chairperson shall decide on the establishment of the parent company; and appoint the chairman and members of the Members’ Council, general director and controllers of the parent company.

- In case of establishing a corporation with the parent company operating in the form of joint-stock company or limited liability company with two or more members with controlling shares or capital contributions of the State and in case of establishing a corporation concurrently with transforming the parent company into a joint-stock company or limited liability company with two or more members with controlling shares or capital contributions of the State: The line minister or the provincial-level People’s Committee chairperson shall appoint the authorized representative at the parent company; and nominate candidates for the posts of chairman and members of the Board of Directors or Members’ Council of the parent company.

- The Members’ Council or authorized representative and persons appointed to join the Board of Directors of the parent company shall exercise the controlling rights so as to set orientations for the parent company’s Shareholders’ General Meeting and Members’ Council or Board of Directors to further implement the scheme; develop forms of affiliation between the parent company and subsidiary companies and among member enterprises in the course of implementing the scheme, and throughout operation of the corporation. The Members’ Council and authorized representative shall report on the implementation of the scheme and arising difficulties and problems to the owner and coordinate with related agencies in implementing the scheme.

7. For self-developed corporations and groups of companies which fully meet the conditions prescribed in Article 9 of this Decree, the order and procedures for establishing economic groups or corporations are as follow:

a/ For a self-developed corporation which meets the conditions for establishment of an economic group:

- The Members’ Council or authorized representative at the parent company shall make a report proposing the establishment of an economic group and send it to the line ministry.

- The line ministry shall make a report proposing the establishment of the economic group and send it to the Ministry of Planning and Investment. The Ministry of Planning and Investment shall consult the Ministries of Finance; Planning and Investment; Labor, War Invalids and Social Affairs; and Home Affairs, and the provincial-level People’s Committee of the locality where the parent company is located. The Ministry of Planning and Investment shall submit to the Prime Minister a report summarizing opinions of related agencies for consideration and decision.

b/ For a self-developed group of companies which fully meets the conditions for establishment of a corporation:

- The Members’ Council or authorized representative at the parent company shall make a report proposing the establishment of a corporation and send it to the line ministry or provincial-level People’s Committee.

- The line ministry or provincial-level People’s Committee shall make a report proposing the establishment of the corporation and consult the Ministries of Planning and Investment; Finance; Labor, War Invalids and Social Affairs; and Home Affairs and the line ministry (in case the to-be-established corporation will be attached to a provincial-level People’s Committee) or the provincial-level People’s Committee where the parent company is located (in case the to-be-established corporation will be attached to a line ministry). The line ministry or provincial-level People’s Committee shall make a report summarizing opinions of related agencies to the Prime Minister for consideration and decision.

Article 11. Re-organization of economic groups and corporations

1. An economic group or a corporation shall be re-organized by the following methods:

a/ Consolidating the parent company with one or more than one company of the same type but, after the consolidation, the State remains the owner or still owns controlling shares or capital contributions;

b/ Merging the parent company with one or more than one company of the same type but, after the merger, the State remains the owner or still owns controlling shares or capital contributions;

c/ Dividing the parent company into several companies of the same type and, after the division, the State remains the owner or still owns controlling shares or capital contributions;

d/ Splitting the parent company into several companies of the same type and, after the splitting, the State remains the owner or still owns controlling shares or capital contributions;

dd/ Transforming the parent company which is currently operating in the form of state- owned limited liability company into a limited liability company with two or more members or joint-stock company where the State still holds controlling rights;

e/ Increasing or decreasing the numbers of level-II and -III enterprises.

2. Conditions for re-organization:

An economic group or a corporation shall be re-organized when fully meeting the following conditions:

a/ The re-organization is consistent with the Prime Minister-approved overall scheme on re-organization and renewal of wholly state-owned enterprises. In case the re-organization of an economic group or a corporation is not yet mentioned in this scheme, the line ministry (for the economic groups or corporations prescribed in Clause 2, Article 7 of the Government’s Decree No. 99/2012/ND-CP of November 15, 2012, on assignment and delegation of rights, responsibilities and obligations of the state owner toward state-owned enterprises and state capital invested in enterprises (below referred to as Decree No. 99/2012/ND-CP) and corporations under ministries) or provincial-level People’s Committee (for corporations under provincial-level People’s Committees) shall report the case to the Prime Minister for decision;

b/ After being re-organized, the economic group or corporation still fully meets the conditions prescribed in Article 9 of this Decree.

3. Order and procedures for re-organizing an economic group or a corporation:

a/ The re-organization of an economic group or a corporation in the form of consolidation, merger, division or splitting of the parent company must comply with the law on re-organization of companies and the Prime Minister-approved overall scheme on re-organization and renewal of wholly state-owned enterprises;

b/ The re-organization of an economic group or a corporation by increasing or decreasing the number of level-II and -III enterprises must comply with the Prime Minister-approved overall scheme on re-organization and renewal of wholly state-owned enterprises.

Article 12. Termination of operation in the form of economic group or corporation

1. An economic group or a corporation shall terminate its operation in the form of economic group or corporation in the following cases:

a/ The parent company is dissolved or goes bankrupt;

b/ The economic group or corporation no longer satisfies the conditions prescribed in Article 9 of this Decree;

c/ The parent company is merged or consolidated with another enterprise and, after the merger or consolidation, the State no longer owns controlling shares or capital contributions;

d/ Other cases as prescribed by the Government or the Prime Minister.

2. Order and procedures:

a/ Cases in which the parent company is dissolved or goes bankrupt must comply with the laws on dissolution and bankruptcy. The Ministry of Finance shall guide the settlement of debts; the Ministry of Labor, War Invalids and Social Affairs shall guide regimes and policies toward employees upon dissolution of parent companies of economic groups or corporations;

b/ Cases in which the economic group or corporation no longer satisfies the conditions prescribed in Article 9 of this Decree must comply with the Prime Minister-approved overall scheme on re-organization and renewal of wholly state-owned enterprises.

Annually, line ministries and provincial-level People’s Committees shall review and propose:

- The Ministry of Planning and Investment to verify and report cases in which economic groups no longer satisfy the conditions prescribed in Article 9 of this Decree to the Prime Minister for the latter to decide on the termination of operation in the form of economic group.

- The Prime Minister to approve the policy on termination of operation in the form of corporation, for corporations that no longer satisfy the conditions prescribed in Article 9 of this Decree.

Chapter III

MANAGEMENT AND ADMINISTRATION WITHIN ECONOMIC GROUPS AND CORPORATIONS

Section 1. MANAGEMENT AND ADMINISTRATION OF ECONOMIC GROUPS AND CORPORATIONS

Article 13. Principles of management and administration of economic groups and corporations

1. The management and administration of economic groups and corporations shall be performed by one or some of the following methods:

a/ Management and administration via the parent company;

b/ Management and administration through investment and affiliation; agreements and contracts on common use of services within the economic group or corporation; implementation of common regulations, standards and norms within the economic group or corporation in accordance with law; and use of each other’s products and services according to market rules.

2. Other methods in accordance with law and charters of member enterprises.

Article 14. Management and administration of economic groups and corporation via parent companies

1. Parent companies shall represent economic groups or corporations to conduct general activities of the economic groups or corporation in the relations with third parties at home and abroad or in other activities as agreed with member enterprises and prescribed by relevant laws.

2. A parent company may use its rights and obligations as the owner, shareholder or member at member enterprises to coordinate and set orientations for the following activities of the economic group or corporation:

a/ To use its managerial and executive apparatus or establish a separate section to study and work out strategies and propose solutions for coordination and orientation of the activities prescribed in Clause 3 of this Article and submit them to its Members’ Council or Board of Directors of the parent company for approval; to implement coordination and orientation activities prescribed in Clause 3 of this Article through its authorized representatives at subsidiary and affiliate companies;

b/ To coordinate and orientate activities of the economic group or corporation through the performance of economic contracts and affiliation contracts with subsidiary and affiliate companies;

c/ To elaborate uniform regulations applicable in the economic group or corporation.

3. The parent company shall coordinate and orient the following contents:

a/ Formulation and implementation of the general development strategy and business coordination plan of the economic group or corporation; orientations for business strategies of subsidiary companies under the general development strategy and business coordination plan of the economic group or corporation; formulation and implementation of regulations on management and administration and standards and criteria to be uniformly applied within the economic group or corporation;

b/ Classification of member enterprises based on their status and significance in the general development strategy of the economic group or corporation; listing of main business lines and key member enterprises; orientations for member enterprises based on main business lines; management of and orientations for authorized representatives to ensure the controlling rights of the parent company at key member enterprises;

c/ Orientation for medium- and long-term production and business plans of member enterprises;

d/ Orientation for operation and investment objectives and production and business targets; assignment, specialization and cooperation; market access, expansion and sharing, export, use of brands, information services, science and technology research and application, training and other activities of member enterprises under general policies of the economic group or corporation;

dd/ Elaboration and implementation of the regulation on brand management of the economic group or corporation; orientations for common constituents of names of subsidiary and affiliate companies;

e/ Orientation for organization and personnel of subsidiary companies;

g/ Orientation for contents of charters, and control of charter capital structures, of subsidiary companies;

h/ Authorization of its representatives to participate in the management and administration of subsidiary companies. Issuance and implementation of the regulation on designation, replacement, supervision and evaluation of operations of its authorized representatives; definition of matters to be approved by the parent company before its authorized representatives make decision or participate in the decision making at subsidiary companies and affiliate companies;

i/ Acting as the focal point for pooling resources of member enterprises and affiliate enterprises to bid for and implement common projects agreed and implemented by subsidiary companies and affiliate companies;

k/ Implementation and provision of research, technology transfer, marketing and trade promotion services and other services for subsidiary companies and affiliate companies;

l/ Coordination of the formation, management and effective use of common funds; financial supervision and risk control; support for financial activities (capital arrangement and funding support and other forms) for member enterprises in the economic group or corporation when so requested by these enterprises;

m/ Coordination of administrative work and transactions with partners for member enterprises of the economic group or corporation when so requested by these enterprises; performance of public-utility tasks and jobs assigned or ordered by the State to the economic group or corporation;

n/ Establishment and connection of an information network for all subsidiary companies and affiliate companies in the economic group or corporation;

o/ Making of consolidated financial statements of the parent company and subsidiary companies;

p/ Consultation of subsidiary companies and affiliate companies in carrying out general activities;

q/ Supervision of the orientation, harmonization and coordination among sections of the parent company;

r/ Other activities as appropriate with characteristics of each economic group or corporation and in accordance with relevant laws and charters of the parent company, subsidiary companies and affiliate companies in the economic group or corporation.

4. The parent company, subsidiary companies and affiliate companies have the rights and obligations of enterprises as prescribed by law; and shall take responsibility before law for their production and business activities; and be binding in terms of rights and obligations under affiliation contracts or agreements between them.

5. Coordination and orientation in an economic group or a corporation must comply with law; charters of subsidiary and affiliate companies; the owner’s rights at the parent company or agreements between the parent company and subsidiary companies and affiliate companies; and conform with the parent company’s position in each activity of coordination with subsidiary or affiliate companies.

When the parent company takes advantage of its position to make interventions beyond the competence of the owner, member or shareholder, or in contravention of affiliation contracts and agreements among member enterprises of the economic group or corporation, harming the interests of member enterprises and stakeholders, it shall take responsibility in accordance with Clauses 3, 4, 5 and 6, Article 147 of the Enterprise Law and other relevant laws.

Article 15. Responsibilities of parent companies in management and administration of economic groups or corporations

1. To take responsibility before the owner for ensuring objectives of main business lines and other objectives set by the owner. To submit to the owner’s supervision of investment portfolio and investment projects in finance, banking, insurance, securities and real estate (except economic groups and corporations operating in these fields).

2. To manage the investment portfolio at the parent company in order to ensure the investment conditions and business line structure prescribed in Article 17 of this Decree; to monitor and supervise the parent company’s investment portfolio at subsidiary companies; to monitor and supervise business lines of subsidiary companies.

3. To provide information and report on the contents prescribed in Articles 37, 38 and 39 of this Decree.

4. To establish an organization to provide services for member enterprises in the economic group or corporation.

5. To report to and submit to supervision of economic centralization in the economic group or corporation by the competition authority.

6. To perform obligations of enterprises in conformity with its registered form and other obligations as prescribed by law.

7. To develop and apply a performance evaluation system to its authorized representatives at member enterprises in accordance with law.

8. To elaborate and implement managerial personnel policies at the parent company and for authorized representatives at member enterprises. These policies must cover:

a/ Criteria of managerial experience and qualifications;

b/ Methods and processes of recruitment (including examination-based recruitment) and appointment of leading and managerial personnel under the parent company’s competence; selection and nomination for competent authorities to select and appoint leading and managerial personnel of the parent company; selection and nomination of candidates for enterprises with capital of the parent company to elect them to the Board of Directors or the Members’ Council of these enterprises; recruitment (including examination-based recruitment) and appointment of persons to represent capital of the parent company in other enterprises;

c/ Management evaluation system applicable to key leaders and managers of the parent company, subsidiary companies and authorized representatives at member enterprises of the economic group or corporation;

d/ Principles and methods of competitive payment of salaries and bonus;

dd/ Sanctions on violations.

9. To guide subsidiary companies in forming a system for uniform administration and accounting of centralized funds.

Article 16. Management and administration in economic groups and corporations through investment or affiliation

Member enterprises of an economic group or a corporation may apply the following forms to ensure their connection in the management and administration within the economic group or corporation:

1. Investment, purchase and sale of products and services; technology support; and brand development among member enterprises.

2. Agreement on the internal credit mechanism within the economic group or corporation; credit guarantee mechanism; and lawful formation of centralized funds.

3. Organization of consultation conferences or meetings:

a/ Between managers and executives of the parent company and authorized representatives at member enterprises for orientation, harmonization and coordination of the activities prescribed in Clause 3, Article 14 of this Decree and for implementation of important development strategies and orientations of the economic group or corporation;

b/ Between professional sections of the parent company and of member enterprises for implementation of professional matters.

4. Transfer of authorized representatives being leaders among subsidiary companies.

Article 17. Provisions on restriction of investment and on business lines in economic groups and corporations

1. A controlled enterprise may neither contribute capital to nor purchase shares of an enterprise holding the controlling right within an economic group or a corporation. Controlled enterprises within an economic group or a corporation may neither contribute capital to nor purchase shares from one another for cross ownership.

2. Outside capital investment by a parent company operating as a state-owned single-member limited liability company must comply with the Government’s regulations on investment of state capital in enterprises and financial management of enterprises with wholly state-owned charter capital.

3. The parent company and member enterprises of an economic group or a corporation that register main business lines and related business lines in accordance with this Decree and relevant laws shall submit to the owner’s supervision of their investment, investment capital ratios and efficiency of investment in main and related business lines. The parent company and member enterprises of an economic group or a corporation may not conduct unrelated business lines.

Representatives of the state owner shall approve or assign authorized representatives at enterprises to exercise the rights of controlling shareholders or members to:

- Vote for decisions on main business lines;

- Decide on the adjustment or change of main business lines;

- Supervise operations of related business lines.

Section 2. FUNCTIONS, RIGHTS, OBLIGATIONS AND ORGANIZATION OF MANAGEMENT OF PARENT COMPANIES BEING STATE-OWNED SINGLE-MEMBER LIMITED LIABILITY COMPANIES

Article 18. Functions, organization of management and operations of parent companies

1. The parent company shall directly conduct production and business and make financial investment in other enterprises or only make financial investment in other enterprises.

The organization of management and operations of the parent company in an economic group or a corporation prescribed in Clause 2, Article 7 of Decree No. 99/2012/ND-CP must comply with the charter promulgated by the Government; the regulation on financial management approved by a competent state agency and relevant laws.

2. The organization of management and operations of the parent company in a corporation not prescribed in Clause 2, Article 7 of Decree No. 99/2012/ND-CP must comply with the charter approved by the line ministry or provincial-level People’s Committee; the regulation on financial management approved by a competent state agency and relevant laws.

Article 19. Rights, obligations and organizational and managerial structure of parent companies

1. A parent company shall exercise the rights and perform the obligations prescribed in the Enterprise Law.

2. The organizational and managerial structure of a parent company is composed of the Members’ Council, director general, controllers and assisting apparatus. The tasks, powers and working mechanisms of the Members’ Council, controllers, director general, deputy directors general, chief accountant and assisting apparatus must comply with the Enterprise Law and Articles 20 thru 27 of this Decree.

The Prime Minister shall decide on the organizational and managerial structures of parent companies operating in particular fields.

Remunerations, salaries and other benefits of Members’ Council members, director general and controllers must comply with the laws on labor and salaries.

Article 20. Rights and responsibilities of the Members’ Council

The Members’ Council shall directly represent the owner at the parent company and have the rights and obligations prescribed in Article 14 of Decree No. 99/2012/ND-CP.

Article 21. Members of the Members’ Council

1. Members of the Members’ Council of the parent company include the chairperson and full-time and part-time members. The term of office of members of the Members’ Council must not exceed five (5) years. Members of the Members’ Council may be re-appointed.

2. For parent companies in economic groups or corporations prescribed in Clause 2, Article 7 of Decree No. 99/2012/ND-CP, the number of members of the Members’ Council must not exceed seven (7) with no more than one (1) member participating in administering the parent company. In special cases where more than seven (7) members of the Members’ Council are needed, the line minister shall report such to the Prime Minister for consideration and decision.

3. For parent companies of corporations not prescribed in Clause 2, Article 7 of Decree No. 99/2012/ND-CP, the number of members of the Members’ Council must not exceed five (5) with no more than one (1) member participating in administering the parent company. In special cases where more than five (5) members of the Members’ Council are needed, the line minister or the provincial-level People’s Committee chairperson shall report such to the Prime Minister for consideration and approval.

A member of the Members’ Council of the parent company must satisfy the following basic criteria:

a/ Permanently residing in Vietnam. Being a Vietnamese citizen, for the Members’ Council chairperson;

b/ Being a university graduate and having business and corporate management capabilities. Having at least three (3) years’ experience in management and administration of enterprises operating in the main business lines of the parent company, for the Members’ Council chairperson;

c/ Having good health and moral qualities, being honest, upright and knowledgeable about law, having a sense of law observance;

d/ Being neither a leading official in the state apparatus or a political organization or socio-political organization nor a manager or an executive at a member enterprise;

dd/ Not being prohibited from holding managerial and executive posts at enterprises as prescribed at Points b, c, dd, e and g, Clause 2, Article 13 of the Enterprise Law;

e/ Other criteria prescribed at the charter of the parent company.

4. A member of the Members’ Council shall be relieved from duty and replaced in the following cases:

a/ He/she violates law and is subject to prosecution or falls into the cases subject to relief from duty and replacement under the charter of the parent company. In this case, the Members’ Council and controllers may request the agency representing the owner to add and replace members of the Members’ Council;

b/ He/she is incapable and unqualified to perform the assigned jobs; or loses his/her civil act capacity or has his/her civil act capacity restricted;

c/ He/she voluntarily resigns;

d/ He/she receives a decision on transfer or assignment to another job;

dd/ He/she dishonestly exercises his/her powers or takes advantage of his/her position and powers to earn profits for him/herself or for another person;

e/ The company fails to fulfill its tasks or targets assigned by the owner without any objective reasons approved by the owner;

g/ Other cases under the owner’s decision in accordance with the charter of the parent company.

Article 22. Chairman and assisting apparatus of the Members’ Council

1. The Members’ Council chairman may not concurrently work as the director general of the parent company. The parent company’s charter must prescribe the Members’ Council chairperson or the director general as the at-law representative of the parent company.

2. The Members’ Council chairperson shall exercise the rights and perform the tasks prescribed in Clause 2, Article 49 of the Enterprise Law and other rights and tasks prescribed in the parent company’s charter; and shall explain to and take responsibility before the owner for his/her delay or failure to sign decisions of the Members’ Council.

3. Based on requirements and specific characteristics of the parent company and after obtaining the line ministry’s approval, the Members’ Council of the parent company in an economic group may form a consultancy team or several consultancy boards whose heads are members of the Members’ Council as follows:

a/ The Finance Board, which shall assist the Members’ Council in identifying long- and medium-term financial objectives and targets; working out financial management principles and mechanisms to be applied in the entire economic group; and appraising contracts, investment projects and other financial matters to be decided by the Members’ Council;

b/ The Personnel, Wage and Bonus Board, which shall formulate regulations and criteria for recruitment, employment and management of personnel and labor to be applied in the entire economic group; selection and nomination of high-ranking personnel; salaries, remunerations and bonuses for key personnel in the economic group and other personnel, salary and bonus matters to be decided by the Members’ Council;

c/ The Audit and Supervision Board, which shall examine and supervise activities of mobilizing, using and distributing resources in the economic group; and supervise the implementation of the accounting process and accounting, audit and finance decisions of the Members’ Council;

d/ Some other boards (if any).

Operation funds of the boards prescribed in Clause 3 of this Article shall be taken from enterprises under the Ministry of Finance’s guidance.

Article 23. Controllers

Criteria, working conditions and regime, tasks, powers and obligations of controllers must comply with the Prime Minister’s Regulation on operations of controllers of single-member limited liability companies with wholly state-owned charter capital.

Article 24. Director general

1. The director general is the person who administers the company’s day-to-day operations according to its objectives and plans and resolutions and decisions of the Members’ Council in conformity with the parent company’s charter; and who shall take responsibility before the Members’ Council and law for the exercise of his/her vested powers and performance of his/ her assigned tasks.

2. The director general shall be appointed, re-appointed, dismissed, commended and disciplined, and have his/her contract signed or terminated in accordance with Decree No. 99/2012/ND-CP and relevant laws. The parent company’s charter must specify criteria of and conditions for the director general. The term of office of the director general must not exceed five (5) years.

3. The director general has the tasks and powers prescribed in Article 70 of the Enterprise Law and the following tasks and powers toward member enterprises:

a/ To elaborate plans on business coordination among member enterprises for submission to the Members’ Council; to organize the implementation of plans on joint business and investment of member enterprises;

b/ To inspect member units in observing norms, standards and unit prices issued within the economic group or corporation;

c/ To propose the Members’ Council to designate the parent company’s authorized representatives at other enterprises.

4. The director general shall perform the obligations prescribed in Article 72 of the Enterprise Law and other obligations provided in the parent company’s charter and signed contract.

5. The director general shall be replaced in the following cases:

a/ He/she voluntarily resigns and his/her resignation is approved in writing by a competent authority in accordance with law;

b/ There is a decision on his/her transfer, retirement or assignment to another job;

c/ Other cases prescribed in Clause 6 of this Article.

6. The director general shall be dismissed or have his/her contract terminated ahead of schedule in the following cases:

a/ The parent company fails to achieve the assigned return-on-equity ratio for two (2) consecutive years or falls into an intermingled loss and profit-making state without remedy, except for cases of a loss or lower return-on-equity ratio approved by a competent authority; a loss planned due to production and business expansion or technology renewal investment under a resolution or decision of the Members’ Council; a loss or lower return-on-equity ratio for an objective reason which has been explained to and approved by a competent authority;

b/ The parent company operates at a loss to the limit set by the parent company’s charter;

c/ The parent company falls into bankruptcy but fails to file a petition for bankruptcy under the law on bankruptcy;

d/ He/she fails to fulfill the tasks or targets assigned by the Members’ Council; repeatedly and systematically violates resolutions and decisions of the Members’ Council and the operation regulation of the parent company;

dd/ He/she dishonestly exercises his/her powers or takes advantage of his/her position and powers to earn profits for him/herself or for another person; or makes untruthful reports on the parent company’s financial status;

e/ He/she loses his/her civil act capacity or has his/her civil act capacity restricted;

g/ He/she has been convicted under a legally effective court judgment or decision.

Article 25. Deputy directors general, chief accountant and assisting apparatus

1. Deputy directors general shall assist the director general in administering the company as assigned and authorized by the latter; and take responsibility before the director general and law for their assigned or authorized tasks.

2. Deputy directors general and the chief accountant shall be appointed, relieved from duty and dismissed, have their contracts signed and terminated by the Members’ Council and enjoy salary levels and other benefits at the proposal of the director general. The term of office of deputy directors general and the chief accountant must not exceed five (5) years and they may be re-appointed or have their contracts renewed.

The number of deputy directors general must not exceed five (5). The Members’ Council shall decide on the structure and number of deputy directors general suitable to the size and production and business characteristics of the parent company in the course of operation. In case more than five (5) deputy directors general are needed, the Members’ Council shall propose the line ministry (for parent companies in economic groups or corporations prescribed in Clause 2, Article 7 of Decree No. 99/2012/ND-CP and corporations under ministries) or the provincial-level People’s Committee (for parent companies in corporations under provincial-level People’s Committees) to report such to the Prime Minister for consideration and approval.

3. The chief accountant shall organize accounting work of the company; and assist the director general in supervising finance and utilizing financial resources at the company in accordance with the law on finance and accounting; have the powers and obligations as prescribed by the law on finance and accounting; and take responsibility before the director general and law for his/her assigned or authorized tasks. The criteria of chief accountant must comply with the Accounting Law and relevant laws.

4. The assisting apparatus consists of the office and professional sections which function to advise and assist the Members’ Council and the director general in management and administration work.

Article 26. Relationship between the Members’ Council and the director general in management and administration

1. When organizing the implementation of a resolution or decision of the Members’ Council, if detecting a matter unfavorable to the parent company and the entire economic group, the director general shall report it to the Members’ Council for consideration and modification of that resolution or decision. The Members’ Council shall consider the director general’s proposal. In case the Members’ Council does not modify the resolution or decision, the director general shall still implement it but may make a proposal to the owner.

2. Within fifteen (15) days after the end of a month, quarter or year, the director general shall send to the Members’ Council a report on the parent company’s operations and orientations in the next period.

3. The Members’ Council chairperson may attend or send a representative of the Members’ Council to attend briefing meetings and meetings to prepare plans for submission to the Members’ Council, which are chaired by the director general. The Members’ Council chairperson or the Members’ Council representative may give his/her opinions but may not make meeting conclusions.

4. The director general shall be invited to meetings of the Members’ Council and may give his/her opinions but may not vote unless he/she is a member of the Members’ Council.

Article 27. Relationship between controllers and the Members’ Council and director general

The relationship between controllers and the Members’ Council and director general must comply with the Prime Minister’s Regulation on operations of controllers of single-member limited liability companies with wholly state-owned charter capital.

Section 3. RELATIONSHIP BETWEEN PARENT COMPANIES AND ENTERPRISES JOINING ECONOMIC GROUPS OR CORPORATIONS

Article 28. Relationship of general coordination within economic groups or corporations

The parent company, subsidiary companies and affiliate companies joining an economic group or a corporation have the relationship of general coordination established by the following modes:

1. Elaborating a common operation regulation on the basis of agreement between the parent company and enterprises joining the economic group or corporation.

2. Based on its powers and responsibilities prescribed by law, the parent company shall act as the focal point for performing some or all of the following jobs to coordinate general operation among enterprises in the economic group or corporation:

a/ Coordinating planning work and administering business coordination plans;

b/ Directing the assignment of operational areas and production and business lines of member enterprises of the economic group or corporation;

c/ Organizing financial, accounting and statistical operations;

d/ Setting up, managing and using centralized funds of the economic group or corporation;

dd/ Managing and using land and mineral resources;

e/ Labor, salaries, health care, training and human resource development;

g/ Labor safety, natural disaster prevention and control and environmental protection;

h/ Science and technology application;

i/ Naming units of the economic group or corporation; using the name and brand of the economic group or corporation;

k/ Performing administrative and external relation work of the economic group or corporation;

l/ Managing emulation, commendation, cultural, sports and social affairs;

m/ Other jobs as agreed upon by member enterprises of the economic group or corporation.

Article 29. Relationship between the parent company and level-II enterprises with charter capital wholly owned by the parent company

1. The Members’ Council or the Board of Directors of the parent company shall perform the parent company’s rights and obligations of the owner toward level-II enterprises with charter capital wholly owned by the parent company in accordance with relevant laws and charters of those enterprises.

2. In the relationship with level-II enterprises with charter capital wholly owned by the parent company, the director general of the parent company shall:

a/ Receive, examine and appraise dossiers submitted by the Members’ Council chairpersons or presidents of level-II enterprises to the parent company for subsequent submission to the Members’ Council or the Board of Directors for consideration and approval or decision;

b/ Organize the monitoring, examination, urging and supervision of the Members’ Councils or presidents of level-II enterprises in implementing resolutions and decisions of the Members’ Council or the Board of Directors of the parent company toward level-II enterprises, including also the implementation of production and business coordination plans.

3. Level-II enterprises with charter capital wholly owned by the parent company shall: a/ Be assigned by the parent company to perform production and business contracts on

the basis of economic contracts; be provided with information and enjoy services and benefits from general operations of the economic group or corporation in accordance with this Decree, the agreements between them and member enterprises of the economic group or corporation and relevant laws;

b/ Implement the general agreements of the economic group or corporation and commitments under economic contracts with the parent company and member enterprises of the economic group or corporation; implement lawful decisions falling under the owner’s competence of the parent company over the enterprises; and participate in the implementation of the plan on business coordination with the parent company and member enterprises of the economic group or corporation.

Article 30. Relationship between the parent company and level-II enterprises with controlling shareholdings or capital contributions of the parent company

1. The parent company has the rights and obligations of a shareholder, capital contributor or joint-venture party of level-II enterprises in accordance with law and charters of those enterprises. The Members’ Council or the Board of Directors of the parent company shall directly exercise the following rights and perform the following obligations:

a/ The rights and obligations of a shareholder, capital contributor or joint-venture party through authorized representatives at the enterprises as prescribed by law and charters of these enterprises;

b/ To appoint, replace, dismiss, commend and discipline, and decide on allowances and benefits of, authorized representatives at the enterprises;

c/ To request authorized representatives to make periodical or extraordinary reports on the financial status, business results and other issues of the enterprises;

d/ To assign tasks and request authorized representatives to consult on important issues before voting at the enterprises; to report on the exercise of the rights of a controlling shareholder or capital contributor for orientating development and objectives of the parent company and the entire economic group or corporation;

dd/ To earn profits and bear risks from the parent company’s capital amounts contributed to the enterprises;

e/ To supervise and inspect the use of capital amounts contributed to the enterprises;

g/ To take responsibility for the efficiency of the use, preservation and development of capital amounts contributed to the enterprises.

2. In the relationship with level-II enterprises with controlling shares or capital contributions of the parent company, the director general of the parent company has the following responsibilities:

a/ To receive, examine and appraise dossiers submitted by authorized representatives to the Members’ Council or the Board of Directors for consideration and approval or decision;

b/ To monitor, examine, urge and supervise authorized representatives in implementing decisions of the Members’ Council or the Board of Directors of the parent company toward level-II enterprises;

c/ To examine, urge and supervise the enterprises in implementing production and business coordination plans.

3. Level-II enterprises with controlling shares or capital contributions of the parent company have the rights and obligations in accordance with law and also the following:

a/ To participate in business coordination plans on the basis of economic contracts with the parent company and member enterprises; to be assigned by the parent company to perform production and business contracts on the basis of economic contracts with the parent company; to be provided with information by the parent company and enjoy services and benefits from general operations of the economic group or corporation in accordance with this Decree, the agreements between them and member enterprises and relevant laws;

b/ To implement the general agreements of the economic group or corporation and commitments under economic contracts with the parent company and member enterprises; to implement lawful decisions of the parent company with the controlling right toward the enterprises.

Article 31. Relationship between the parent company and affiliate companies

1. The parent company shall exercise its rights and perform its obligations toward affiliate companies in accordance with law, the latter’s charters and affiliation agreements.

2. The parent company shall be related to affiliate companies under contractual agreements on brands, markets, technologies, research, human resource training and development and other agreements.

Article 32. Attached units of parent companies

The attached units of a parent company (comprising dependent cost-accounting units and non-business units) shall implement the parent company’s regime on decentralization of business operations, cost accounting, organization and personnel provided in the Regulation on organization and operation of attached units elaborated by the director general of the parent company and approved by the Members’ Council or the Board of Directors. The parent company shall take responsibility for financial obligations arising from commitments of its attached units.

Section 4. FUNCTIONS, RIGHTS, OBLIGATIONS AND ORGANIZATION OF MANAGEMENT OF PARENT COMPANIES BEING ENTERPRISES WITH CONTROLLING SHARES OR CAPITAL CONTRIBUTIONS OF THE STATE

Article 33. Functions and organization of management and operations of the parent company

1. The parent company has the function of directly conducting production and business and making financial investment in other enterprises or only making financial investment in other enterprises.

2. The organization of management and operation of the parent company must comply with its charter approved by the General Meeting of Shareholders (for parent companies being joint stock companies with controlling shares of the State) or by the Members’ Council (for parent companies being limited liability companies with two or more members with controlling capital contributions of the State).

Article 34. Rights, obligations and organizational and managerial structure of parent companies, management, administration and relations in economic groups and corporations

1. The parent company has the rights and obligations prescribed by the Enterprise Law and relevant laws.

2. The organizational and managerial structure of the parent company must comply with the Enterprise Law and relevant laws corresponding to its form of joint stock company or limited liability company with two or more members.

3. The management and administration of an economic group or a corporation must comply with Section 1, Chapter III of this Decree. The relationship between the parent company and enterprises joining an economic group or a corporation must comply with Section 3, Chapter III of this Decree.

Chapter IV

MANAGEMENT AND SUPERVISION OF ECONOMIC GROUPS AND CORPORATIONS

Article 35. The state owner and its representative at the parent company

1. The Government shall uniformly perform the function of the state owner at parent companies operating as state-owned single-member limited liability companies and of state capital at parent companies operating as joint stock companies or limited liability companies with two or more members with controlling shares or capital contributions of the State.

The assignment and decentralization for the performance of the function of the state owner at parent companies in economic groups and corporations must comply with Decree No. 99/2012/ND-CP.

2. The following agencies, organizations and persons may be appointed as representatives of the state owner at parent companies:

a/ For parent companies in economic groups operating as state-owned single-member limited liability companies: the Prime Minister, the Government, the line ministry and persons appointed as members of the Members’ Council of the parent company;

b/ For parent companies in economic groups operating as joint stock companies or limited liability companies with two or more members in which the State holds the controlling right: the Prime Minister, the line ministry and persons authorized to exercise the rights and perform the responsibilities and obligations of the shareholder or capital contributor at the parent company;

c/ For parent companies in corporations operating as state-owned single-member limited liability companies: the line ministry or the provincial-level People’s Committee and persons authorized to exercise the rights and perform responsibilities and obligations of the state owner at the parent company;

d/ For parent companies in corporations operating as joint stock companies or limited liability companies with two or more members in which the State holds the controlling right: the line ministry, provincial-level People’s Committee or the State Capital Investment Corporation and persons authorized to perform the rights, responsibilities and obligations of the shareholder or capital contributor at the parent company.

Article 36. Management of economic groups and corporations by the state owner

1. The state owner shall manage economic groups and corporations through parent companies in those groups and corporations.

2. The state owner shall manage parent companies in economic groups and corporations by issuing decisions, assigning, decentralizing and authorizing the issuance of decisions, and examining the implementation of decisions of the owner at parent companies in economic groups and corporations in accordance with Decree No. 99/2012/ND-CP.

Article 37. Supervision of economic groups and corporations by the state owner

1. Supervision of an economic group or a corporation by the owner shall be conducted through supervision of the parent company in that group or corporation.

2. Contents subject to supervision include:

a/ Business operations, covering business objectives, orientations and strategies of the group or corporation; investment portfolio, main business lines and related business lines; investment in risky sectors, industries, geographical areas and projects; performance of public- utility tasks; support for macro-regulation and social security assurance; the parent company’s development strategy and investment, finance and production and business plans; results of fulfillment of objectives and tasks assigned by the owner;

b/ Organization and personnel work, covering the implementation of the owner’s decisions on establishment, reorganization and termination of operation as an economic group or a corporation; process of changing the ownership structure of affiliate companies which lead to loss of the parent company’s controlling right; implementation of the parent company’s charter; evaluation of operation results of, and implementation of the salary and bonus regime applicable to, the Members’ Council, controllers and the director general of the parent company; appointment, re-appointment, dismissal of deputy directors general and the chief accountant of the parent company by the Members’ Council; implementation of regimes and policies for employees; observance of the owner’s other decisions and relevant provisions of the charter;

c/ Finance, covering equity preservation and development at the parent company; production and business situation and results; capital raising and use situation; issuance of bonds and stocks (if any); return on state equity ratio; return on sales ratio; return on assets ratio; profits or dividends divided to the State; situation of investment inside and outside enterprises; loans, debts and solvency status; investment and business efficiency; expenses for salary payment; charter capital, adjustment of charter capital and its structure; investment projects beyond the powers decentralized to the Members’ Council or the Board of Directors of the parent company and other necessary financial indicators.

3. Assignment and decentralization of supervision jobs prescribed in Clause 2 of this Article toward economic groups and corporations with parent companies operating as state- owned single-member limited liability companies:

a/ Line ministries shall supervise parent companies in economic groups and corporations prescribed in Clause 2, Article 7 of Decree No. 99/2012/ND-CP and their attached corporations, regarding main and related business lines; assessment of the structure of main and related business lines; capital management, use, preservation and development; supervision, examination and assessment of debts and other asset liabilities; implementation of strategies and plans; implementation of recruitment, salary and bonus regimes; evaluation of the fulfillment of assigned business objectives, tasks, sectors and lines and operation results and production and business efficiency; evaluation of management and administration work of the chairperson and members of the Members’ Council, controllers, the director general, deputy directors general and the chief accountant;

b/ Provincial-level People’s Committees shall supervise their attached corporations regarding main and related business lines; assessment of the structure of main and related business lines; capital management, use, preservation and development; supervision, examination and assessment of debts and other asset liabilities; implementation of strategies and plans; implementation of recruitment, salary and bonus regimes; evaluation of the fulfillment of assigned business objectives, tasks, sectors and lines and operation results and production and business efficiency; evaluation of management and administration work of the chairperson and members of the Members’ Council, controllers, the director general, deputy directors general and the chief accountant;

c/ The Ministry of Finance shall supervise and assess financial operations; supervise the issuance of stocks, adjustment of charter capital of parent companies and member enterprises; expenses for salary payment; borrowing of loans for investment in finance, banking, real estate and securities; and transfer of capital, investment and resources within economic groups or corporations and from economic groups or corporations to the outside and vice versa; monitor consolidated financial statements of economic groups and corporations; annually summarize and report to the Government on production and business efficiency, performance of assigned public-utility tasks; financial status, debts and other asset liabilities of economic groups and corporations nationwide; and assume the prime responsibility for, and coordinate with line ministries and provincial-level People’s Committees in, conducting supervision and regular examination and inspection according to regulations on capital management, use, preservation and development;

d/ The Ministry of Planning and Investment shall monitor and supervise the implementation of plans on establishment of economic groups or corporations; supervise and evaluate the implementation of development strategies of economic groups and corporations; periodically summarize and report to the Government on the fulfillment of business objectives, tasks, sectors and lines of all economic groups and corporations nationwide; assume the prime responsibility for, and coordinate with line ministries and provincial-level People’s Committees in, supervising and annually examining the implementation of production and business strategies and plans and five-year development investment plans; and give opinions about receipt of subsidiary and affiliate companies of economic groups and corporations;

dd/ The Ministry of Home Affairs shall assume the prime responsibility for, and coordinate with line ministries and provincial-level People’s Committees in, supervising and examining the observance of the Party’s and the State’s regulations on personnel work at economic groups and corporations;

e/ The Ministry of Labor, War Invalids and Social Affairs shall assume the prime responsibility for, and coordinate with line ministries and provincial-level People’s Committees in, supervising and periodically examining economic groups and corporations in implementing recruitment and salary and bonus regimes.

4. Assignment and decentralization of supervision jobs prescribed in Clause 2 of this Article toward economic groups and corporations with parent companies operating as joint stock companies or limited liability companies with two or more members with controlling shares or capital contributions of the State:

a/ Line ministries shall request authorized representatives to report on the implementation of law; management, use, preservation and development of state capital; implementation of strategies and plans; evaluation of fulfillment of assigned business objectives, tasks, sector and lines and operation results and efficiency of parent companies and the entire economic groups with main business lines under the ministries’ management, and of parent companies and the entire corporations under the ministries;

b/ Provincial-level People’s Committees shall request authorized representatives to report on the implementation of law; management, use, preservation and development of state capital; implementation of strategies and plans; evaluation of fulfillment of assigned business objectives, tasks, sector and lines and operation results and efficiency of parent companies and the entire corporations under provincial-level People’s Committees;

c/ The Ministry of Finance shall assume the prime responsibility for, and coordinate with line ministries and provincial-level People’s Committees in, requesting authorized representatives to report on management, use, preservation and development of state capital invested in enterprises nationwide;

d/ The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with line ministries and provincial-level People’s Committees in, requesting authorized representatives to report on the implementation of production and business strategies and plans and five-year development investment plans;

dd/ The Ministry of Home Affairs shall assume the prime responsibility for, and coordinate with line ministries and provincial-level People’s Committees in, requesting authorized representatives to report on the implementation of the Party’s and the State’s regulations on personnel work at economic groups and corporations;

e/ The Ministry of Labor, War Invalids and Social Affairs shall assume the prime responsibility for, and coordinate with line ministries and provincial-level People’s Committees in, requesting authorized representatives to report on the implementation of recruitment, salary and bonus regimes of economic groups and corporations.

5. Ministries, agencies and organizations prescribed in Clauses 3 and 4 of this Article shall annually report to and take responsibility before the Prime Minister for the state and results of supervision and assessment and concurrently send a copy of the report to the Ministry of Planning and Investment.

The Ministry of Planning and Investment shall summarize results of owner supervision nationwide under this Article and report them to the Prime Minister.

Article 38. Methods of and bases for management and supervision of economic groups and corporations

1. Economic groups and corporations shall be supervised by the following methods:

a/ Direct methods: Through examination, supervision and evaluation activities of the agencies prescribed in Clause 3, Article 37 of this Decree.

- Through evaluation by agencies representing the owner of operation results of economic groups and corporations and holders of titles appointed and signed contracts by these agencies.

An agency representing the owner shall establish an advisory council for ^valuation of operations of state enterprises, comprising specialists from state agencies, institutes and universities who have deep knowledge about industries and fields of operation of economic groups and corporations. This council shall provide advice and assessment before decisions are made to ensure objective evaluation of economic groups and corporations and title holders under the agency’s management. The agency representing the owner shall issue the operation regulation of the advisory council.

- Through the audit of parent companies and subsidiary and affiliate companies.

- Through direct reporting by the Members’ Council or authorized representative to the agency representing the owner at the latter’s request.

b/ Indirect methods:

- Through the reports of the Members’ Council or authorized representative at the parent company.

- Through the periodical and extraordinary reports of the parent company.

2. Bases for supervision of economic groups and corporations:

a/ Regulations of the owner and related state management agencies;

b/ Organization and operation charter and finance management regulation of the parent company;

c/ Production and business and development investment plans and results; annual evaluation and ranking criteria applicable to economic groups and corporations; criteria for performance evaluation of the Members’ Council or the Board of Directors, director general, deputy directors general and chief accountant of the parent company as prescribed by the Government;

d/ Annual financial statements of the parent company and audited consolidated financial statements of the entire economic group or corporation approved by the Members’ Council or the Board of Directors; quarterly financial statements, periodical operational reports and other extraordinary reports as requested by the owner;

dd/ Results of inspection, examination and audit at enterprises by professional agencies;

e/ Other related information and documents as prescribed by law.

3. Supervision and evaluation results shall serve as the basis for deciding on salary and bonus levels, appointment, re-appointment, dismissal, contract renewal or termination, commendation, disciplining and responsibility handling of the chairperson and members of the Members’ Council or the Board of Directors, the director general, deputy directors general and the chief accountant of the parent company.

The chairperson and members of the Members’ Council or the Board of Directors, the director general, deputy directors general and the chief accountant of the parent company who commit acts of infringing upon or harming the interests of the parent company or the entire economic group or corporation, the owner, members, shareholders and creditors of enterprises or others shall, depending on the severity and nature of their acts, be disciplined or examined for penal liability and shall pay damages (if any) in accordance with law.

Article 39. Information disclosure and transparency mechanism for economic groups and corporations

1. Economic groups and corporations shall make public and transparent major information relating to their operations in accordance with the enterprise law regarding information disclosure and transparency. Information to be made public and transparent includes:

a/ For the parent company in an economic group or a corporation: Information prescribed in Chapter IV of the Regulation on financial supervision, evaluation of operation efficiency and disclosure of financial information for state-owned enterprises and state-invested enterprises promulgated together with the Government’s Decree No. 61/2013/ND-CP of June 25, 2013, and the following information:

- Tasks assigned by the state owner in different forms.

- Detailed information on ownership and asset structures.

- Investment portfolio, forms of investment, total investment budget and implementation progress of current investment projects.

- Large transactions, loans and debts.

b/ For an economic group or a corporation:

- Six-month consolidated financial statements. Audited annual consolidated financial statements of the economic group or corporation.

- Structures, operations and changes in equity of companies; managerial apparatuses of the parent company and subsidiary companies.

- Annual reports of the economic group or corporation.

- Biannual and annual reports on administration of the entire economic group or corporation.

2. An economic group or a corporation shall send to the agency representing the owner periodical and extraordinary reports on:

- The use of capital, land, natural resources and other resources at the parent company and the entire economic group or corporation.

- The organization and results of implementation of long-term strategies and plans of the parent company; decision on annual plans of the parent company already approved by the owner; decision on long-term strategies and plans and business sectors and lines of subsidiary companies with charter capital wholly owned by the parent company.

- The process and results of implementation of investment projects under long-term development master plans and plans of the economic group or corporation already approved by the Prime Minister.

- The process and results of implementation of plans on organization of management, organization of business operations, payroll and use of the managerial apparatus, internal management rules of the company, labor planning and training, establishment of branches and representative offices of the parent company.

- The appointment, re-appointment, relief from duty, dismissal, commendation and disciplining of, and contract signing and termination for, the director general after being approved by the Prime Minister; decision on salary level of the director general.

- Results after use of after-tax profits or handling of losses in the course of business operation.

- The process and results of examination and supervision of the Members’ Council, the Board of Directors and controllers of single-member limited liability companies with charter capital wholly owned by the parent company.

- Other contents to be reported by an enterprise to the owner as prescribed by the Enterprise Law and its guiding documents.

3. Means and forms of information disclosure include annual reports, corporate administration reports and publication on websites of economic groups or corporations. The information made public and transparent under Clause 1 of this Article shall be published on the business website of the Ministry of Planning and Investment (www.business.gov.vn) for thirty (30) days after being approved by the owner. The form of the information disclosure report must comply with regulations of the Ministry of Planning and Investment.

4. Types of information to be disclosed and time of disclosure:

a/ Annual financial statements, including annual financial statements of the parent company and consolidated financial statements of the entire economic group or corporation.

The time limit for disclosure of annual financial statements is ninety (90) days after the end of a fiscal year;

b/ Annual reports: The time limit for disclosure of annual reports is twenty (20) days after disclosure of annual financial statements;

c/ Corporate administration reports: Biannually and annually, the parent company shall disclose information on administration of the parent company and the entire economic group or corporation. The time limit for reporting and disclosing biannual and annual corporate administration reports is thirty (30) days after the end of the reporting period;

d/ Irregular information and other information as prescribed by law.

5. In addition to complying with Clauses 1, 2, 3 and 4 of this Article, economic groups and corporations with parent companies operating as joint-stock companies shall disclose information under the guidance on information disclosure on the stock exchange.

6. Economic groups and corporations shall take responsibility for the accuracy, truthfulness and consistency of disclosed information.

Chapter V

IMPLEMENTATION PROVISIONS

Article 40. Effect

1. This Decree takes effect on September 1, 2014, and replaces the Government’s Decree No. 101/2009/ND-CP of November 5, 2009, on pilot establishment of state economic groups; the Government’s Decree No. 111/2007/ND-CP of June 26, 2007, on organization and management of state corporations and transformation of state corporations, independent state companies and parent companies being state companies after the parent company-subsidiary company model operating under the Enterprise Law.

2. For economic groups and corporations established before the effective date of this Decree:

a/ Those that meet the criteria of establishment of economic groups or corporations, except that of charter capital prescribed in Article 9 of this Decree, shall, within three (3) years after the effective date of this Decree, increase their charter capital to the level prescribed by this Decree. In case of failing to increase their charter capital, after the above time limit, they shall be promptly transformed into corporations or company groups relevant to their actual conditions;

b/ Those that fail to meet the establishment criteria prescribed in this Decree shall be transformed into corporations or company groups relevant to their actual conditions within two (2) years after the effective date of this Decree;

c/ Those that have more than three (3) levels of enterprises shall, within two (2) years after the effective date of this Decree, reorganize and arrange subsidiary companies of existing level- ill enterprises. Agencies representing the owner shall monitor and supervise the reorganization and arrangement of these economic groups and corporations.

3. Parent companies in economic groups or corporations that have a number of controllers, Members’ Council members or deputy directors general unconformable with provisions of this Decree shall increase or transfer them within one (1) year after the effective date of this Decree.

4. Economic groups and corporations not governed by this Decree may apply relevant provisions of this Decree to their organization and operations.

Article 41. Implementation responsibilities

1. The Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Home Affairs shall guide the implementation of this Decree.

The Ministry of Planning and Investment shall monitor the implementation of this Decree.

2. Ministries, ministerial-level agencies, government-attached agencies and People’s Committees at all levels shall perform the state management of economic groups and corporations in the sectors prescribed by law.

3. Ministers, heads of ministerial-level agencies and government-attached agencies, chairpersons of provincial-level People’s Committees, chairpersons of Members’ Councils or Boards of Directors, and directors general of economic groups and corporations shall implement this Decree.-

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