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THE MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No: 1179-TC/KBNN
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Hanoi, December 05, 1994
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DECISION
PROMULGATING THE PROVISIONAL
STATUTE ON THE BIDDING FOR GOVERNMENT BONDS AND BONDS OF STATE-OWNED
BUSINESSES.
THE MINISTER OF FINANCE
Pursuant to Decree
No.178-CP on the 26th of July, 1994 of the Government on the tasks and powers
and the organization of the Ministry of Finance;
Pursuant to Decree No.72-CP on the 26th of July, 1994 of the Government on the
promulgation of the Statute on the Issue of Government Bonds;
Pursuant to Decree No.120/CP on the 17th of September 1994 of the Government
promulgating the Provisional Statute on the Issue of Stocks and Bonds of
State-Owned Businesses;
After consulting with the Governor of the Vietnam State Bank,
DECIDES:
Article
1.- To promulgate, together with this
Decision, the Provisional Status on the Bidding for Government Bonds and Bonds
of State-Owned Businesses.
Article
2.- This Decision takes effect from the
date of its signing.
Article
3.- The Ministers, the Heads of the
ministerial-level agencies, the Heads of the agencies attached to the
Government, the Presidents of the People's Committees of the provinces and
cities directly under the Central Government shall have to cooperate with the
Ministry of Finance to carry out this Statute. The Director of the State
Department of Treasury, the Heads of the units under the Ministry of Finance,
and the Director of the Financial and Pricing Office shall have to guide the
implementation of this Statute.
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MINISTER OF FINANCE
Ho Te
PROVISIONAL STATUTE
ON THE BIDDING FOR GOVERNMENT
BONDS AND BONDS OF STATE-OWNED BUSINESSES
(Promulgated together with Decision No.1179-TC/KBNN on the 5th of December,
1994 of the Minister of Finance)
Article
1.- The technical terms used in this
Statute have the following meanings:
1. Bidding for
Government bonds and bonds of State-owned businesses (hereunder referred to as
bonds) is a form of issuing bonds at an interest rate to be determined by the
bidding.
2. The administered
interest rate is the maximum interest rate set for the bidding, to be announced
by the organizer of the bidding in the bidding announcement.
3. The fixed interest
rate is the interest rate of bonds which is used to calculate and pay interest
to the owners of bonds when the payment of the bond interest is due, and which is
to be announced by the organizer of the bidding in the bidding announcement.
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5. The bidding volume
is the total value of the bonds which the bidder pledges to buy at the interest
rate he/she had bid for.
6. The winning volume
is the value of the bonds the bidder is entitled to buy as a result of his/her
bid.
7. The price for the
issue of bonds is the sum of money which the bidder must pay to the organizer
of the bidding according to the results of the bidding.
8. The registered
money is the sum of money which each bidder must advance to the organizer of
the bidding to be eligible to take part in the bidding. The minimum sum must be
5% of the bid which the bidder intends to offer, and this sum carries no
interest rate while being under registration. This sum of money shall be used
(partly or wholly) to buy bonds (if the bidder wins), or returned to him/her
(if he/she loses), or use to pay fine in case the bidder fails to pay to the
organizer of the bidding on schedule.
Article
2.- The organizers of the bidding include:
- The Ministry of
Finance, for treasury bonds and project bonds.
- The Ministry of
Finance and the Central State Bank, for treasury credit bonds issued through
the State Bank.
- The State-owned
businesses to be named by the Ministry of Finance, for bonds of State-owned
businesses.
Article
3.- The principles for the bidding for
bonds:
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2. The bidding should
be organized openly with all bidders enjoying equal rights and obligations.
3. The winning bidder
has the right and obligation to buy the amount of bonds at the interest rate
offered.
Article
4.- The bidders for bonds include:
- Vietnamese
businesses in all branches and economic sectors, including commercial banks,
credit organizations, financial companies, insurance companies, insurance
funds, investment funds...
- Enterprises with
foreign invested capital operating in conformity with the Law on Foreign
Investment in Vietnam and the Ordinance on the Bank.
Article
5.- The bidders must meet the following
conditions:
1. Having the
juridical person status, being established in accordance with Vietnam's current
law.
2. Having a bank
account in Vietnamese Dong opened at the State Bank or Treasury.
3. Depositing the
registered money in a bank account as required by the organizer of the bidding
for bonds, one day before the opening of the bidding, as stipulated at Point 8,
Article 1, of this Statute.
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5. Fully observing the
procedures and stipulations of this Statute, and the specific announcements of
the organizer of the bidding.
Article
6.- The minimum bid of each bidder in a
bidding for bonds shall be set and announced by the organizer of the bidding;
the bidding for credit bonds of the Treasury (short-term) shall be stipulated
and announced jointly by the Ministry of Finance and the State Bank. The
maximum bid shall not exceed the total amount of capital needed, as announced
in the bidding notice.
Article
7.- The notice of the bidding for bonds:
Seven days before the
organization of a bidding, the organizer of the bidding for bonds must widely
publicize the necessary information about the bidding through the mass media,
including:
- The kind of bonds
for bidding; the term; denomination; fixed interest rate; administered interest
rate for the bidding.
- The total amount of
capital needed.
- The deadline to
register of the bidding.
- The address for
reception of registration forms and bidding forms.
- The opening day and
place of the bidding.
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- The place for
advancing the registered money.
- The form of payment
for the amount of bonds won in the bidding.
- The re-payment of
the principal and interest of bonds when they are due.
- Other relevant in
formation.
Article
8.- The bidders must send their
registration form for the bidding made according to the set form to the
organizer of the bidding at least 2 working days before the opening of the
bidding (sending it either directly or by FAX).
Article
9.- Bidding: The bidders must send their
bidding forms to the organizer of the bidding 12 hours before the opening day
of the bidding. The bidding forms must be enclosed in sealed envelops and put
in the bidding box. The bidding box must be closed on five sides with only one
slit made on the sixth side for inserting the bidding forms, and this side must
be locked. No bidding form shall be withdrawn or corrected after having been
sent to the organizer of the bidding.
Article
10.- Opening the bidding: At 12:00 hours
of the bidding day, the organizer of the bidding shall open the bidding forms,
and classify them into valid and invalid ones. All those bidding, forms
improperly made are not eligible for the bidding, and shall be returned to the
bidders right after the results of the bidding are announced.
Article
11.- Determining the winning bid:
- The winning bid
shall be determined by the increasing percentage of the interest rate offered,
i.e. from the lowest interest rate to the highest interest rate within the
administered interest rate, until the level is reached for the amount of
capital needed.
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Article
12.- Determining the price for issuing bonds:
The determination of the price for issuing bonds shall be conducted by the
following methods:
+ Method 1: The
issuing price determined by the discount method.
By this method,
instead of paying interest, the issuing price shall be set lower than the value
of the bonds, and the bonds shall be repaid at their value when they are due.
The formula for calculating the issuing price of the bonds is:
- G: The issuing price
- MG: The value of the
winning bid.
- Lst : The interest
rate of the winning bonds of each bidders.
- T: The term of
bonds.
+ Method 2: The
issuing price is determined by the method of fixed interest rate.
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- G: The issuing
price.
- MG: The value of the
winning bid.
- Lst: The winning
interest rate.
- LsCD: the fixed
interest rate.
- T: The term of the
bonds.
- n: The number of
interest payments within the term of the bonds.
Article
13.- Announcing the results of the
bidding:
- The results of the
bidding shall be announced at the close of the opening day of the bidding
through the mass media, put up on the notice board of the Organizing Committee
of the bidding, and sent to all the bidders the day after the opening day of
the bidding.
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+ The number of valid
bids and invalid bids; the number of winning bids.
+ The total volume of
winning bonds, the lowest and the highest volumes of winning bonds.
+ The lowest, highest
and average interest rates won.
- The results of the
winning bidders (interest rate, the amount of bonds won, the issuing price)
shall be made known directly to each winning bidder.
Article
14.- Payment for the volume of winning
bonds:
- All the winning
bidders must fully pay by cheque or by money transfer for the total volume of
winning bonds within 2 working days after the bidding day.
- The date for issuing
bonds comes just after the bidding day. At the same time, the winning bidders
shall receive certificates of bonds or certificates of ownership of bonds (for
the form of bonds bearing a serial number).
- The winning bidders
who are found 1-5 days late in making payment as stipulate, shall be fined in
accordance with the regime of late payment fine; the fine shall be taken from
the registered money. Failure to make the payment within 5 days shall be taken
for granted that the winning bidder has given up the winning bid, and all its
registered money shall be handed over to the State budget.
Article
15.- Repaying the bonds when they are due:
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Article
16.- The bond-issuing organization shall
set up the Organizing Committee for the bidding of bonds.
The Organizing
Committee for the bidding of bonds is composed of 5-7 persons, including a
Head, a Deputy-Head, members, and a secretary. The Ministry of Finance should
be represented in the Organizing Committee for the bidding of bonds of
State-owned businesses.
All the members of the
Organizing Committee for the bidding of bonds must strictly keep secret all
information of the bidders and the information about the bidding of bonds.
The Organizing
Committee for the bidding of bonds has the tasks of:
+ Preparing and
announcing the contents of the bidding.
+ Making public the
conditions set for the bidders and checking whether they are qualified.
+ Receiving and
checking the validity of registration forms and bidding forms.
+ Organizing the
opening of the bidding, and determining the winning bid and the issuing price.
+ Announcing the
results of the bidding.
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Article
17.- All expenditures for the organization
of the bidding for bonds shall be added up to the expenditure for the issuing
of bonds as stipulated by the Ministry of Finance.
Article
18.- The bidders may lodge their
complaints about any question concerning the organization of the bidding for
bonds. Within 10 days after receiving a complaint, the Organizing Committee of
the bidding must answer the complainant. In case the complainant is not
satisfied, he/she may complain to the authorized agencies concerned.
Article
19.- This Statute takes effect from the
date of its signing, and shall apply to the bidding for Government bonds and
bonds of State-owned businesses.
The treasury bonds issued through the State Bank
in the form of bidding shall also observe this Statute and the specific
guidance of the State Bank and the Ministry of Finance.