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Answer:

Article 123 of the Enterprise Law stipulates the rights and obligations of the Commission, accordingly the Commission acts as a “body” and does not base on the status of each member. Moreover, paragraph 2 Article 121 of the Enterprise Law stipulates: “The Company’s Charter shall stipulate the rights and obligations of the Commission’s Director.” Hence, in order to identify: (i) the operation of the Commission and (ii) the validity of the annually Commission’s Report which is submitted only by the Commission’s Director to the Meeting in 2010 as mentioned above, you need to further check with the provisions of the Company’s Charter. If according to the Company’s Charter the Commission’s Director can adopt the report by himself, the operation and report of the Commission shall comply with that regulation. In case, the Company’s Charter does not have that regulation, the annually report of the Commission shall be adopted by the whole Commission. In that case, the report which is made and submitted only by the Commission’s Director to the Meeting is not appropriate with the laws and therefore no valid.

According to paragraph 1 Article 123 of the Enterprise Law, the Commission shall have the responsibility with the Meeting while conducting its assigned duties. As a result, when discovering the report reflecting incorrect information, you have to inform the Meeting about that event.

One of the duties and rights of the Commission stipulated specifically at Article 123 of the Enterprise Law is to examine and submit financial reports, annually business reports of the company and the management evaluation report of the Board of Management (“Reports”) to the Meeting at its annual convention. During this period, if you are a member of the Commission and you do not receive the Reports mentioned above, you have the right to request the supply of that Reports so that you can conduct your regulatory duty of examining Reports of the Commission.

Answer:

1. With related to the renewal of the term of the Board and the Commission    

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

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

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

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

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

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

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

Answer:

Pursuant to Article 18(1)(a) of Decision 87/2007/QD-BTC on the issuance of the rules for registration, depository, offset and liquidation of shares (Decision 87), shares owners who registered at the SDC but not yet deposit wishing to undertake the transfer rights of shares must deposit shares at SDC to buy and sell through the Stock Exchange (SE). Therefore, you cannot transfer directly to your brother.

Pursuant to Article 18(1)(b) of Decision 87, the SDC undertakes the transfer of share ownership through securities transactions at SE, in the following cases: gifts, compliments, giving away, succession of securities according to civil laws. Hence, the compliment and giving away transactions are not compulsory through SE. The SDC will conduct the transfer of securities ownership to your wife.

As for the depository, Article 6 of Decision 16/QD-TTLK dated April 02, 2008 on the issuance of the rules on securities depository operations stipulates: “Investors open an unique share depository account at the depository member to perform transaction of deposited shares at SDC except cases at paragraph 2 Article 22 of the Rules for registration, depository, offset and liquidation of shares”. Therefore, you can deposit at SDC.

With related to presenting and giving away shares, you need to compile dossiers in compliance with Article 26 Decision 14/QD-TTLK dated April 02, 2008 on issuance of Rules of shares registration operations, including the following documents:

– Document suggesting the transfer of securities ownership of the presenter stating clearly reasons and relevant information of the presentee;

– Securities present and giving away contract notarized;

– Due copy of documents of individuals, organizations of the presenter and presentee;

– Request for securities transfer and documents confirming the balance, in which the depository member undertakes to freeze his/her securities account in case securities are deposited or due copies of Book/Certificate of securities ownership of transferer of securities not yet deposit;

– Documents proving the publish of information as stipulated regarding subjects who have to publish information when transfer securities according to Securities Law;

Other relevant materials and documents (if any).

Answer:

1. Related to share listing registration procedure, as soon as legal conditions are met, the company files in accordance with paragraph 2 Article 10 Decree 14/2007/ND-CP dated January 19, 2007 detailing guidance on the Securities Law for HOSE, including:

–  Share listing registration application;

–  Decision of the Shareholders General Meeting (SGM) approving the listing;

–  Shareholders registration book compiled within one month prior to the time of filing listing registration application;

–  Prospectus;

–  Warranties of shareholders being members of the Board of Management, Supervisory Committee, Director or General Director, Deputy Director or Deputy General Director and Chief Accountant holding 100 percent of their shares within six months since the listing date and 50% of these shares within the next six months;

–  Listing Consulting Contract (if any);

–  Certificate of the Securities Depository Central (SDC) regarding the concentrated depository of that organization’s shares.

Accordingly, the listing registration application shall identify the chartered capital of the company at the time of listing and the number of shares registered and, simultaneously, the company shall deposit those listing registered shares with the SDC.

2. With related to the procedure for converting bonds to shares, the conversion of bonds to shares is synonymous with (i) the company issuing more shares for creditors; (ii) increasing chartered capital; (iii) amending the company’s Charter as a result of capital increasing. Therefore, pursuant to regulations, those events shall be permitted by the SGM.

Subsequently, pursuant to Decision 15/QD-TTLK of the SDC on the promulgation of the rules for implementation of rights of securities owners dated April 02, 2008, the company shall implement the following procedures:

–  Notice on implementation of rights and formation of the list of bonds owners.

–  Implementation of the conversion right of convertible bonds.

–  Distribution of new shares for investors.

After converting bonds to shares, the chartered capital of the company will change causing the change of circulating shares. At the same time, the company shall deposit shares which have just been converted from bonds. As a result, the company cannot implement simultaneously both the share listing registration and bonds conversion procedures but is able to undertake bonds conversion procedures prior to or upon the listing registration of the company’s shares.

Answer:

In principle, in respect of both listed companies and un-listed companies, there are two major kinds of share offering namely public offering and private offering. There is no specific regulation on percentage between the capital proposed to be issued and the current Charter capital as well as the limitation on the capital proposed to be increased within a year.

In order to conduct public share offering, the company must satisfy conditions stipulated in Article 12.1 of the Law on Securities 2006.

Currently, there is no specific regulation on distance between the two tranches of public shares offering to increase Charter Capital.

In order to conduct private share offering, the company must satisfy conditions stipulated in Article 8 of Decree No. 1/2010 of the Government on Private Share Offering dated January 4, 2010. .

In respect of distance between the two tranches of private shares offering to increase Charter Capital, pursuant to Article 8.5 of Decree No. 1/2010, private shares offering tranches must be conducted at least six months part. If company breaches this regulation, the offering shall be deemed invalid and the increase of Charter Capital shall not be approved by the competent authority.

Especially, breach of regulation on dossier, conditions and conducting of the private shares offering shall be subjected to a fine from 30 million Vietnam dong to 100 million Vietnam dong.

However, Decree No. 1/2010 took effect from February 25, 2010. Therefore, before the effective date of this Decree, there was no specific regulation on private shares offering. The private shares offering must be conducted pursuant to the 2005 Law on Enterprises and the 2006 Law on Securities.

Answer:

Electing the Chairman of BoM
Clause 1, Article 111 of the Law on Enterprises stipulates that: “The General Meeting of Shareholders (GMS) or the BoM shall elect the Chairman of the BoM in accordance with the provisions stipulated in the charter of the company”. Therefore, the electing the Chairman of BoM shall be executed in compliance with the regulations stipulated in the charter of each company. There are 2 following options:
If the charter of your company regulates that: the electing of the Chairman of BoM belongs to the competence of GMS, GMS shall proceed to elect the Chairman of BoM without asking opinion of members of BoM.
In case where the charter of your company stipulates that BoM shall elects the Chairman of BoM, the Chairman of BoM shall be elected within the members of BoM. Therefore, the electing the Chairman of BoM must be compulsorily informed to the members of the BoM. The members of BoM shall elect the Chairman of BoM by voting at the meeting in accordance with the majority principle, asking opinion in writing or any other forms regulated at the charter of the company. Each member of BoM shall have a vote. In such case, the electing of the Chairman of BoM without asking opinion of the members of BoM is contrary to the regulations stipulated in the charter of your company and does not comply with the Law on Enterprises.
The Chairman and members of BoM transfer their shares prior to the expiry of their trems and within the first three years from the date of issuance of the Business Registration Certificate to the Company
Clause 5 Article 84 of the 2005 Law on Enterprises stipulates that:
“Within a period of three years from the date of issuance of the Business Registration Certificate to the company, ordinary shares of founding shareholders may be freely assigned to other founding shareholders, but may only be assigned to persons not being founding shareholders if approved by the GMS. In this case, shareholders intending to assign shares may not vote on the assignment of such shares and the assignee shall automatically become a founding shareholder of the company.
After three years from the date of issuance of the Business Registration Certificate to the company, all restrictions on ordinary shares of founding shareholders shall be lifted”.
Therefore, the permission or restriction on transfer of share of the Chairman and members of BoM depend on whether they are founding shareholders of the Company or not. In details:
If the Chairman and members of BoM are not founding shareholders of the Company, the 2005 Law on Enterprises has no regulations prohibiting or restricting the transfer of the share owning by them at anytime, whether the are in office or not.
If the Chairman and members of BoM are founding shareholders of the Company, they shall be restricted to transfer their ordinary shares in accordance with the above Clause 5 Article 84 of the 2005 Law on Enterprises. Therefore, within a period of three years from the date of issuance of the Business Registration Certificate to the company, ordinary shares of founding shareholders may be freely assigned to other founding shareholders, but may only be assigned to persons not being founding shareholders if approved by the GMS.

Answer:
Pursuant to Article 18(1)(a) of Decision 87/2007/QD-BTC on the issuance of the rules for registration, depository, offset and liquidation of shares (Decision 87), shares owners who registered at the SDC but not yet deposit wishing to undertake the transfer rights of shares must deposit shares at SDC to buy and sell through the Stock Exchange (SE). Therefore, you cannot transfer directly to your brother.

Pursuant to Article 18(1)(b) of Decision 87, the SDC undertakes the transfer of share ownership through securities transactions at SE, in the following cases: gifts, compliments, giving away, succession of securities according to civil laws. Hence, the compliment and giving away transactions are not compulsory through SE. The SDC will conduct the transfer of securities ownership to your wife.

As for the depository, Article 6 of Decision 16/QD-TTLK dated April 02, 2008 on the issuance of the rules on securities depository operations stipulates: “Investors open an unique share depository account at the depository member to perform transaction of deposited shares at SDC except cases at paragraph 2 Article 22 of the Rules for registration, depository, offset and liquidation of shares”. Therefore, you can deposit at SDC.

With related to presenting and giving away shares, you need to compile dossiers in compliance with Article 26 Decision 14/QD-TTLK dated April 02, 2008 on issuance of Rules of shares registration operations, including the following documents:

– Document suggesting the transfer of securities ownership of the presenter stating clearly reasons and relevant information of the presentee;

– Securities present and giving away contract notarized;

– Due copy of documents of individuals, organizations of the presenter and presentee;

– Request for securities transfer and documents confirming the balance, in which the depository member undertakes to freeze his/her securities account in case securities are deposited or due copies of Book/Certificate of securities ownership of transferer of securities not yet deposit;

– Documents proving the publish of information as stipulated regarding subjects who have to publish information when transfer securities according to Securities Law;

Other relevant materials and documents (if any).