|
THE MINISTRY OF
FINANCE OF VIETNAM
-------
|
SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
---------------
|
|
No.: 03/VBHN-BTC
|
Hanoi, May 10,
2021
|
DECREE
CONVERSION OF
STATE-OWNED ENTERPRISES AND WHOLLY STATE-OWNED SINGLE-MEMBER LIMITED LIABILITY
COMPANIES INTO JOINT-STOCK COMPANIES
The Government’s Decree No. 126/2017/ND-CP dated
November 16, 2017 on conversion of state-owned enterprises and wholly
state-owned single-member limited liability companies into joint-stock
companies, coming into force from January 01, 2018, is amended by:
The Government’s Decree No. 140/2020/ND-CP dated
November 30, 2020, providing amendments to the Government’s Decree No.
126/2017/ND-CP dated November 16, 2017 on conversion of state-owned enterprises
and wholly state-owned single-member limited liability companies into
joint-stock companies, the Government’s Decree No. 91/2015/ND-CP dated October
13, 2015 on state capital investment in enterprises, use and management of
capital and assets in enterprises, and the Government’s Decree No.
32/2018/ND-CP dated March 08, 2018 providing amendments to Decree No. 91/2015/ND-CP,
coming into force from November 30, 2020.
Pursuant to the Law on Organization of
Government dated June 19, 2015;
Pursuant to the Law on Enterprises dated
November 26, 2014;
Pursuant to the Law on management and use of
state capital invested in manufacturing and business operations of enterprises
dated November 26, 2014;
Pursuant to the Law on Securities dated June 29,
2006; the Law on Amendments to the Law on Securities dated November 24, 2010;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
At the request of the Minister of Finance of
Vietnam;
The Government promulgates a Decree prescribing
the conversion of state-owned enterprises and wholly state-owned single-member
limited liability companies into joint-stock companies. [1]
Chapter I
GENERAL PROVISIONS
Article 1. Scope
This Decree deals with the conversion of
state-owned enterprises and wholly state-owned single-member limited liability
companies into joint-stock companies.
Article 2. Regulated entities
1. Owner’s representative agencies.
2. [2] Wholly state-owned enterprises include:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) Wholly state-owned independent single-member
LLCs.
3. Single-member LLCs 100% of charter capital of
which is invested by state-owned enterprises (hereinafter referred to as
“rank-II enterprises”).
4. Other authorities, organizations and individuals
involved in the conversion of state-owned enterprises into joint-stock
companies (JSCs).
Article 3. Definitions
For the purposes of this Decree, the terms below are
construed as follows:
1. “equitized enterprise” means an enterprise that
is mentioned in Clause 2 or Clause 3 Article 2 of this Decree and converted
into a JSC in accordance with the provisions of this Decree.
2. “date of equitization decision” means the date
on which owner’s representative agency issues the enterprise equitization
decision.
3. “date of enterprise valuation” means the date
which is selected by the owner’s representative agency and suitable for the
valuation method. Where the asset-based method is adopted, the date of
enterprise valuation shall be the closing date of the accounting book to make
the latest quarterly or annual financial statements after the date of
equitization decision.
4. “disclosure date of enterprise value” means the
date on which the owner’s representative agency issues a decision to disclose
the value of the equitized enterprise.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
6. “auction of shares” means the public offering of
shares of the equitized enterprise to those that enter competitive bids.
7. “auction organization” means a Stock Exchange
(SE), securities company, property auction service center or enterprise, as
prescribed in the Law on property auction, that is selected according to the
decision of the owner’s representative agency.
8. “starting price” means the initial price of a
share sold on the market which is determined by the owner’s representative
agency but not lower than its face value (VND 10.000). The starting price shall
be determined by a consulting firm to ensure due consideration of the actual
value of state capital in the enterprise which has been recalculated and
published by a competent authority while taking into account the enterprise’s
growth potential.
9. “equitization costs” means all costs directly
incurred from the enterprise equitization from the date of equitization
decision to the date of transfer between the equitized enterprise and the JSC.
10. “owner’s representative agency” means a
ministry, ministerial or governmental agency, People’s Committee of a province
or central-affiliated city (hereinafter referred to as “provincial People’s
Committee”) or an organization established under regulations of law that is
assigned by the Government to perform rights and responsibilities of a
representative of owner of state capital in the equitized enterprise.
Article 4. Equitization requirements
1. [3]
An enterprise prescribed in Clause 2 or Clause 3 Article 2 of this Decree may
undergo the process of equitization when meeting the following requirements:
a) It is not an enterprise 100% of charter capital
of which has to be held by the State. The list of enterprises 100% of charter
capital of which has to be held by the State shall be announced by the Prime
Minister in each period;
b) The enterprise's actual value upon completion of
financial settlement and enterprise revaluation as prescribed in Chapter II and
Chapter III of this Decree is equal or greater than total payables;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
In addition to the house and land
rearrangement/treatment plan regarding the non-agricultural land area approved
by a competent authority as prescribed in the law on management and use of
public property, a wholly state-owned agriculture or forestry company shall be
required to have the land use plan regarding the agricultural land area
approved by a competent authority in accordance with the Government’s Decree
No. 118/2014/ND-CP dated December 17, 2014 and its amending and/or superseding
documents.
2. [4]
Upon completion of financial settlement and enterprise revaluation as prescribed
in Chapter II and Chapter III of this Decree, if an enterprise’s actual value
is lower than its total payables, the owner’s representative agency shall
direct the enterprise to cooperate with Vietnam Debt and Asset Trading
Corporation (DATC) and its creditors in formulating a feasible and efficient
debt trading plan to serve the enterprise restructuring or adopt another
conversion form as prescribed by law.
3. The State shall not provide additional funding
for equitization, even for enterprises over 50% of shares of which has to be
held by the State after equitization according to the Prime Minister’s
regulations.
Article 5. Forms of equitization
1. Issuing additional shares in order to increase
charter capital while keeping current state capital unchanged.
2. Selling part of current state capital or both
selling part of state capital and issuing additional shares to increase charter
capital.
3. Selling the entire state capital in the
enterprise or both selling the entire state capital and issuing additional
shares to increase charter capital.
Article 6. Eligible buyers and conditions for
purchasing shares
1. Domestic investors are entitled to purchase an
unlimited quantity of shares of an equitized enterprise, except the cases
prescribed in Clause 4 of this Article.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Foreign investors that wish to purchase shares
shall be required to open accounts at credit institutions in accordance with
regulations of law of Vietnam on foreign exchange.
[5]
Foreign investors are entitled to provide deposits in foreign currencies
through bank transfer for purchase of shares or stakes of wholly state-owned
enterprises in accordance with the Vietnam’s law on foreign exchange and
guidelines given by the State Bank of Vietnam (SBV).
3. Strategic investors:
a) A strategic investor may be a domestic or
foreign investor that:
- has the status of a legal entity as prescribed in
laws;
- has adequate financial capacity and a profitable
business in the past 02 years before the date of subscribing for shares without
accumulated loss; and
- has a written commitment made by a competent
person when registering to become a strategic investor of the equitized
enterprise that:
+ The primary business line(s) and brand(s) of the
equitized enterprise will be maintained for at least 03 years from the date of
officially becoming the strategic investor.
The owner’s representative agency of an enterprise
included in the list of national brands shall request the Prime Minister to
determine the specific period of time that the strategic investor has to make
the commitment to continue maintaining the primary business line(s) and
brand(s) of the equitized enterprise.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
+ There is a plan for assisting the enterprise
after equitization in new technology transfer, personnel training, financial
capacity enhancement, enterprise management, material supply, and market
development.
+ Compensation shall be paid for damage caused by
the breach of commitment, and in such case total amount of shares purchased by
the strategic investor is at the State’s disposal.
b) The initial offering of shares to strategic
investors is only available to the enterprises included in the list of
enterprises over 50% of shares of which has to be held by the State under the
Prime Minister’s decision;
c) [6] Based on the scale of charter capital,
the nature of business lines and enterprise development requirements, the
Equitization Steering Board (hereinafter referred to as the “Steering Board”)
shall request the authority competent to approve the equitization plan to
decide whether or not strategic investors are allowed to buy shares from the
initial offering. If strategic investors are allowed to buy shares from the
initial offering, the authority competent to approve the equitization plan
shall specify the criteria for selection of strategic investors and percentage
of shares to be sold to strategic investors in the equitization plan.
Procedures for selecting strategic investors of an
equitized enterprise are provided in the Appendix I enclosed herewith, ensuring
that the selection of strategic investors and share subscription must be
completed before the disclosure date of information on the initial public
offering (IPO).
d) If there is only one strategic investor eligible
to subscribe for shares and the number of subscribed shares is smaller than or
equal to the number of shares to be offered to strategic investors specified in
the approved equitization plan, the Steering Board shall request the owner’s
representative agency to make the decision on offering of shares for the
strategic investor through direct negotiation provided that the selling price
shall not be lower than the average successful bid according to public auction
results; in case shares are offered to other investors as prescribed in Clause
2 Article 37[7] of
this Decree, the selling price agreed upon with the strategic investor shall
not be lower than that agreed upon with the investor subscribing for shares.
The Steering Board shall request the owner’s
representative agency to make a decision on modification of the equitization
plan to sell the remaining shares (i.e. the difference between the number of
shares to be offered to strategic investors specified in the approved
equitization plan and the number of shares subscribed by the strategic
investor) at public auction.
dd) If there are at least two strategic investors
eligible to subscribe for shares and the total number of shares subscribed by
strategic investors is greater than the number of shares to be offered to
strategic investors specified in the approved equitization plan, the Steering
Board shall request the owner’s representative agency to consider holding an
auction for strategic investors at a SE.
The auction between strategic investors shall be
conducted after the public auction is held with the starting price equal to the
average successful bid of the public auction (in case shares are offered to
other investors as prescribed in Clause 2 Article 37[8] of this Decree, the starting price shall
be the selling price agreed upon with the investor subscribing for shares).
Shares will be sold to investors in descending order of their bids.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
The steering authority shall request the
representative authority to make a decision on revising the equitization plan
to sell the remaining shares (difference between the number of shares offered
to strategic investors according to the approved equitization plan and the
number of shares subscribed by the strategic investor) at public auction.
g) The strategic investor that fails to comply with
the commitment or violates regulations on transfer of shares shall pay
compensation for any damage in accordance with the commitment and regulations
of law in force;
h) The strategic investor has to pay a deposit or
obtain a guarantee from a credit institution or foreign bank branch that equals
(=) 20% of value of the shares subscribed at the starting price that has been
approved by a competent authority and specified in the equitization plan.
The strategic investor abandoning the right to
purchase shares will lose the paid deposit (or incur a fine equal to the
deposit in case of guarantee).
i) Offering of shares to strategic investors shall
be done before the first General Meeting of Shareholders (GMS) is held to
convert the enterprise into the JSC.
The Steering Board shall request the owner’s
representative agency to make a decision to record the remaining shares
(difference between the number of shares actually offered to strategic
investors and the number of shares subscribed by strategic investors as
specified in the approved equitization plan) as a decrease in the charter
capital before the first GMS is held.
4. The following entities that are ineligible to
purchase initially issued shares of the equitized enterprise:
a) Members of the Steering Board and Assisting Team
(unless they are representatives of the enterprise);
b) Financial intermediaries and employees or
managers thereof engaging in provision of equitization consulting services or
financial statement audit, and the audit firm in charge of enterprise valuation
(except underwriters that purchase unsold shares as prescribed in the
underwriting agreements);
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
d) Auction organizations and employees and managers
thereof;
dd) The related persons as prescribed in Clause 17
Article 4 of the 2014 Law on Enterprises, of the entities mentioned in Points
a, b and d of this Clause.
Article 7. Payment currency and initial offering
methods
1. Domestic and foreign investors shall purchase
shares of the enterprise in VND.
2. The initial offering of shares shall be carried
out adopting the the following methods:
a) Public auction;
b) Underwriting;
c) Direct negotiation;
d) Booking building.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3. Depending on the eligibility to buy shares from
the initial offering, the owner’s representative agency shall determine the
offering method mentioned in Clause 2 this Article.
Article 8. Equitization costs
1. The owner’s representative agency shall consider
approving the estimate and statement of equitization costs. The General
Director (or Director) of the equitized enterprise shall decide specific
expenses according to the contents approved by the owner’s representative
agency and take legal responsibility for such decision. Equitization costs must
be proved by reasonable and valid documents, and ensure the cost-effectiveness
as prescribed by law.
2. Equitization costs consist of:
a) Direct costs of the enterprise:
- Cost of providing professional training in
enterprise equitization;
- Cost of stocktaking and valuation of assets;
- Cost of preparing the equitization plan and the
enterprise’s Charter;
- Cost of organizing the employees’ meeting to
implement equitization;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Cost of financial statement audit services on the
official date of equitization;
- Cost of share offering;
- Cost of holding the first GMS.
b) Costs of hiring audit organization and
consulting firms (that provide consultancy on enterprise valuation,
determination of the starting price, development of the equitization plan and
share offering) that are decided by the owner’s representative agency or the
Steering Board (if authorized). The payments shall be made to consulting firms
under terms and conditions of the signed consulting service contracts;
c) Remunerations of the Steering Board and the
Assisting Team:
- The monthly remuneration paid to each member of
the Steering Board or the Assisting Team shall not exceed twice as much as the
statutory pay rate of officials, public employees and armed forces announced by
the Government in each period.
- Remuneration shall be paid to each member of the
Steering Board or the Assisting Team for a maximum period of 24 months from the
day on which the Steering Board or the Assisting Team is established.
d) Other costs related to the enterprise
equitization.
3. The equitization costs shall exclude the cost of
financial statement audit services on the date of enterprise valuation which
shall be recorded by the equitized enterprise as its business expenses in the
period.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
5. [10]
If an enterprise must undergo the enterprise revaluation, or the equitization
is suspended or terminated under a decision of the Prime Minister of Vietnam,
the owner’s representative agency shall consider paying equitization costs
(which must be proved by reasonable and valid documents) which shall be
recorded as the enterprise’s expenses and not be deducted when determining its
taxable incomes.
Article 9. Shares and share certificates
1. Charter capital shall be divided into equal
parts called shares. The face value of a share shall be VND ten thousand (VND
10.000).
2. Share certificate is a certificate issued by the
JSC, accounting entry or electronic data to certify that one or some shares
is/are under ownership of a company's shareholder. A share certificate must
have the primary contents prescribed in Clause 1 Article 120 of the 2014 Law on
Enterprises.
Article 10. Rules for inheritance of rights and
obligations of JSCs converted from state-owned enterprises
1. The equitized enterprise shall arrange and use
the employees existing at the date of equitization decision and pay sufficient
benefits for employees who resign or are made redundant.
The JSC shall take all responsibilities towards
employees handed over from the equitized enterprise; have the right to recruit
and arrange the workforce, and cooperate with relevant authorities in paying
sufficient benefits to employees.
2. The equitized enterprise shall cooperate with
relevant authorities in inspecting and settling financial issues in order to
determine the state capital value on the official date of equitization.
3. The JSC are entitled to use all of received
assets and sources of capital to serve its business; inherit all legitimate
rights and benefits, take responsibility for debts, including tax debts, labor
contracts and other obligations of the equitized enterprise.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) In case the enterprise still has state capital
after the equitization:
- Surplus assets:
If the final statement of the enterprise is not
available on the official date of equitization, the surplus assets shall be
recorded as an increase in state capital in the JSC (if the JSC wishes to use
such assets with the approval given in the GMS’s resolution) or shall be
transferred to the DATC (if the JSC does not wish to use such assets).
If the final statement of the enterprise is
available on the official date of equitization, the surplus assets shall be
transferred to the DATC.
- Deficit assets after being offset against by
compensation paid by relevant entities (if any):
If the final statement of the enterprise is not
available on the official date of equitization, the assets shall be recorded as
its business expenses for the period from the date of enterprise valuation to
official date of equitization.
If the final statement of the enterprise is
available on the official date of equitization, the deficit assets shall be
recorded as decrease in state capital in the JSC (if approved in the GMS’s
resolution) or recorded as business expenses of the JSC (if the GMS’s approval
resolution is not available).
b) In case the enterprise no longer has state capital
after the equitization:
- Surplus assets: The surplus assets shall be
transferred to the DATC.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 11. Information disclosure and
transparency and listing on securities market
1. The equitized enterprise shall disclose the
following information on the Government’s web portal, and send it to the
Ministry of Finance of Vietnam and the Steering Board for Enterprise Innovation
and Development, including: the roadmap and progress of equitization,
information about the enterprise (including the approved plan for land use,
unsettled land disputes (if any)), settlement of financial issues arising
during the equitization, enterprise valuation method and enterprise value,
equitization plan, implementation and results thereof, land management and use,
plan for arrangement and purchasing of shares by employees, and the enterprise's
draft charter as prescribed in the 2014 Law on Enterprises.
2. [11]
When preparing documents for the IPO, the equitized enterprise shall also
prepare documents for depositing and trading of shares on the securities market.
Listing at an SE shall be carried out after the equitized enterprise has been
converted into a JSC and met all listing conditions in accordance with
regulations of the Law on Securities.
3. Within 90 days from the end of the IPO, the
equitized enterprise shall complete procedures for registration of depositing
of share certificates with the Vietnam Securities Depository and trading on
UPCOM system.
4. [12]
(abrogated)
5. The owner’s representative agency shall specify regulations
on equitization and listing on securities market in the equitization plan in
order to ensure that they are made available to investors before the initial
offering.
Where the equitized enterprise is listed on the SE,
the owner’s representative agency shall decide the minimum number of subscribed
shares over the number of IPO shares so that the enterprise meets all
requirements for listing shares after the equitization. The minimum number of
subscribed IPO shares shall abide by the principle of equality for all types of
ownership.
Article 12. Equitization consulting
1. [13]
The equitized enterprise is entitled to hire a consulting firm to determine the
enterprise value and the starting price, and develop the equitization plan and
initial offering plan. The owner’s representative agency shall assume
responsibility to decide the selection of consulting firm, and may authorize
the Steering Board to perform all or some responsibilities of the
investor/procuring entity in accordance with regulations of the Law on bidding
during the process of hiring the consulting firm (except the responsibility to
approve the contractor selection results).
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3. [14] The owner’s representative agency
shall decide to select the consulting firm that meets the standards laid down
in Clause 5 and Clause 6 of this Article to determine the enterprise value
according to the following rules:
a) If the consulting contract
package is worth less than VND 500 million, the consulting firm shall be
selected by direct contracting;
b) If the consulting contract
package is worth more than VND 500 million to VND 03 billion, and upon the end
of the prescribed time limit for competitive bidding, there is only a bidder,
the consulting firm shall be selected by direct contracting;
c) With regard a consulting contract package other
than the one prescribed in Point a or Point b of this Clause, the consulting
firm shall be selected in accordance with regulations of the Law on Bidding.
4. The consulting firm is entitled to adopt
appropriate valuation methods to determine the enterprise value provided that the
rules laid down in this Decree, regulations of laws on land, pricing, and
valuation are strictly followed and valuation tasks will be completed on
schedule according to commitments stated in the signed contract. The equitized
enterprise shall provide adequate and true information about the enterprise for
the consulting firm to serve its performance of valuation tasks.
5. A domestic consulting firm is required to meet
the following standards:
a) [15]
It is an audit organization, securities company or valuation enterprise that is
duly established and operating in Vietnam in accordance with regulations of law
and holds a valid certificate of eligibility to provide valuation services
issued by the Ministry of Finance of Vietnam in accordance with regulations of
laws on pricing and valuation;
b) It has at least 05-year experience (including 60
consecutive months of operation by the time of submission of an application for
provision of consulting services) in valuation, auditing, accounting, financial
consulting or enterprise ownership conversion consulting.
[16]
(abrogated)
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
d) [17]
(abrogated)
dd) It meets criteria for the number and
qualifications of its personnel;
e) It does not incur any administrative penalties
or more serious penalties for violations against regulations of laws regarding
its business lines within 05 consecutive years before the year of application;
g) It has (official) enterprise valuation process
in accordance with regulations of law on conversion from state-owned
enterprises into JSCs and valuation standards.
6. A foreign consulting firm is required to meet
the following standards:
a) It is operating in the field of valuation,
auditing, accounting, financial consulting or enterprise ownership conversion
consulting in accordance with regulations of law of the country where it is
headquartered;
b) It has prestige, capacity,
brand and at least 05-year experience (including 60 consecutive months of
operation by the time of submission of an application for provision of
consulting services) in valuation, auditing, accounting, financial consulting
or enterprise ownership conversion consulting;
c) [18]
(abrogated)
7. Responsibilities of the consulting firm:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) Take legal responsibility for its provided
valuation results;
c) Pay compensation for damage caused by its
commission of violations against regulations of law during its provision of
valuation consulting services, or face penalties in accordance with regulations
of law;
d) Explain or provide information and/or data
related to its provided valuation results if required or at the written request
of the owner’s representative agency, the State Audit Office of Vietnam, the
Ministry of Finance of Vietnam or relevant competent authorities;
dd) Protect the confidentiality of information on
the enterprise; retain documents on the enterprise when its value has been
determined;
e) A consulting firm is not allowed to provide
consulting services if:
- Its executive officer (as defined in Clause 18
Article 4 of the 2014 Law on Enterprises), chief accountant (or person in
charge of accounting tasks) or valuer is a related person (as defined in Clause
17 Article 4 of the 2014 Law on Enterprises) of the equitized enterprise.
- It is providing or has provided auditing,
accounting or financial statement-related services for 02 years before the date
of enterprise valuation.
Chapter II
SETTLEMENT OF FINANCIAL ISSUES UPON EQUITIZATION
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. [19]
(abrogated)
2. Upon receipt of the equitization decision from a
competent authority, the enterprise shall carry out stocktaking and
classification of its assets, sources of capital and funds, and verify debts on
the date of enterprise valuation.
[20]
With regard to certain specialized assets of which the feasibility and
efficiency of stocktaking and assessment of actual conditions cannot be
ensured, the enterprise shall formulate and submit the plan for stocktaking and
assessment of actual conditions of such assets to the owner’s representative
agency for getting opinions from relevant specialized authorities. Within 20
working days from the receipt of the request from the owner’s representative
agency, relevant specialized authorities shall provide their opinions in
writing about the plan for stocktaking and assessment of actual conditions of
such assets. Based on the opinions given by relevant specialized authorities,
the owner’s representative agency shall decide to approve an appropriate
stocktaking plan and assume responsibility for stocktaking results.
3. The equitized enterprise shall take charge of
annual financial statement audit in accordance with the State's regulations. If
the date of enterprise valuation is not the ending date of the fiscal year, the
equitized enterprise shall make the financial statements as at the date of
enterprise valuation.
When the parent company is equitized, all
subsidiaries 100% of charter capital of which is held by this parent company
shall have to undergo enterprise valuation in accordance with this Decree.
Valuation of the subsidiaries shall be carried out on the same date with the
parent company.
4. If the date of enterprise valuation is also the
ending date of the fiscal year, the equitized enterprise shall request its
supervisory tax authority to finalize the amounts payable to state budget
before the valuation is carried out.
If the date of enterprise valuation is not the
ending date of the fiscal year, the equitized enterprise shall request its
supervisory tax authority in writing to inspect and determine amounts payable
to state budget before the valuation is carried out.
Within 30 days from the receipt of the written
request from the enterprise, the tax authority shall carry out tax inspection
and finalization. If the tax authority fails to carry out tax inspection and
finalization within this time limit, the enterprise valuation shall be carried
out based on figures declared by the equitized enterprise.
5. Based on the results of stocktaking, financial
statement audit and finalization of amounts payable to state budget, the
equitized enterprise shall cooperate with relevant authorities in settling
financial issues within its competence and in accordance with regulations of
law before carrying out the enterprise valuation.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Any issues yet to be settled although they have
been reported to competent authorities must be specified in the enterprise
valuation report to serve continued settlement within the period from the date
of enterprise valuation to the official date of equitization.
Article 14. Disposal of assets leased, borrowed
or received under joint-venture or cooperation agreements, redundant assets and
assets purchased with reward or welfare funds
1. Any assets that is leased, borrowed, or received
under a joint-venture or cooperation agreement and other assets that are not
under ownership of the enterprise shall be excluded from the enterprise value.
In case the equitized enterprise is assigned to act
as the investor but is not assigned to manage, use and operate infrastructure
facilities of assets which are established with the state budget-derived
investment assistance funding, these assets shall be also excluded from the
enterprise value. The equitized enterprise shall submit report on these assets
to competent authorities for issuing disposal decisions in accordance with
regulations of law on management of state property.
2. The equitized enterprise shall proactively
dispose of assets which are redundant or pending liquidation in conformity with
prevailing regulations of law on liquidation and transfer of assets.
Notwithstanding the provisions of Clause 3 of this
Article, the equitized enterprise shall transfer assets which are yet to be
disposed of by the date of enterprise valuation to the DATC. The remaining
values as recorded in account books of such assets shall be recorded as the
enterprise’s business expenses in the period.
3. The following assets shall not be excluded from
the enterprise value:
a) Housing or structures (including underground
construction works, roads, walls or yards) either directly or indirectly used
by the enterprise, machines, equipment or vehicles which have been put into use
for 05 years or whose residual value is accounted for 50%, or more, of its
costs; the enterprise shall continue managing, monitoring and disposing of such
assets by the official date of equitization in accordance with regulations of
law;
b) Assets subject to compulsory destruction such as
chemicals, hazardous substances, or expired pesticides, etc.; the enterprise
shall cooperate with relevant competent authorities in disposing or or
destructing these assets in accordance with regulations of law on environmental
protection before the equitized enterprise is issued with the initial
certificate of registration of joint-stock company.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Assets that are in-progress construction costs
of projects or construction works delayed under decision of competent
authorities; the equitized enterprise shall inherit, monitor and settle such
assets in accordance with regulations of law. The enterprise shall determine
the entities liable for the unrecoverable costs of projects which are not yet
approved by competent authorities and generate no tangible items (such as costs
of prefeasibility study, construction surveys, and designs); the loss shall be
offset against the enterprise’s income as prescribed;
d) Assets that has been provided by the enterprise
as collateral for loans at credit institutions;
dd) With regard to assets of the enterprises
mentioned in Clause 2 Article 4 of this Decree, during the cooperation with the
DATC and creditors in developing and submitting the debt trading plan to the
owner’s representative agency for approval, the equitized enterprise shall not
carry out liquidation or transfer of the assets on the list announced by the
owner’s representative agency.
4. [21] Welfare construction works, including
nurseries, kindergartens, health facilities and other welfare facilities
invested with funding from the enterprise’s reward fund and/or welfare fund, shall
be managed and used by the trade union of the joint-stock company to serve its
employees in accordance with regulations of the Law on land and other relevant
laws. If the trade union and employees of the joint-stock company have no
demand for these assets, with authorization of the trade union and employees,
the enterprise shall carry out liquidation and transfer of such assets in
accordance with regulations of relevant laws and the Law on land. Proceeds from
liquidation or transfer of assets, after deducting relevant expenses and paying
taxes (if any), shall be paid to the enterprise’s reward fund and/or welfare
fund.
If the enterprise no longer uses the employee
houses constructed with funding from its welfare fund, including those
constructed with funding from state budget, such houses shall be transferred to
local house and land authority.
5. The assets used to serve the enterprise’s
business purchased with the reward and/or welfare fund shall undergo
revaluation and have their value included in the enterprise value to serve the
JSC’s business if they are proved by adequate and valid documents.
6. Stocktaking, assessment and classification of
assets that are capital in cash, finance lease assets and debts receivable or
payable of a state-owned commercial bank shall comply with specific guidelines
given by the Ministry of Finance of Vietnam.
7. Vocational education and training institutions,
and health facilities affiliated to economic groups or corporations shall not
be divided or transferred when such groups or corporations are equitized.
Vocational education and training institutions, and health facilities shall
undergo equitization together with the parent companies of such economic groups
or corporations.
8. In case of equitization of a parent company
having public service providers that generate revenues (except vocational
education and training institutions, and health facilities):
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
b) If the equitized enterprise does not inherit the
assets, the Steering Board shall request the owner’s representative agency to
consider making a decision or request the Prime Minister of Vietnam to decide
to transfer such assets to relevant ministries or provincial People’s
Committees. While assets are yet to be transferred, the equitized enterprise
shall continue managing them pending a competent authority’s decision.
Article 15. Receivables
1. Each equitized enterprise shall verify all
receivables (including due and undue debts; a credit institution shall be also
required to verify off-balance-sheet receivables (if any)), and collect due
debts before the valuation of the equitized enterprise.
[22]
With regard to receivables from users of postpaid television, telecommunication
and information technology services (rendered domestically or abroad) that
arise regularly in a large quantity and generate considerable work volume, time
and expenses for verification of debts with every user, the owner’s
representative agency shall make decision on such debt verification according
to actual conditions (based on accounting books and records, and the
information technology system employed to manage clients of the equitized
enterprise).
If legal documents proving the debtor or irrevocability of a debt are not adequately available, the debt
shall not be excluded from the enterprise value but be settled as follows:
a) The responsibility to make compensation for the
debt of unidentified debtor shall be determined, and the remaining loss shall
be settled in accordance with State regulations on settlement of outstanding
debts;
b) Documents shall be completed to serve the
continued monitoring of the debt which has not yet been proven to be
irrecoverable.
2. [23]
If there are some receivables which have been proved by adequate documents but
not yet verified by the date of enterprise valuation, the President or Board of
Members of the equitized enterprise shall give explanations about such debts
and determine the responsibility of entities for verification of such debts
before the equitized enterprise is issued with the initial certificate of
registration of joint stock company (except collected debts proved by valid
documents), and submit a report to the owner’s representative agency for
including the value of such debts in the enterprise value according to their
book values. The value of such debts shall be also specified in the decision on
approval for the enterprise value and the equitization plan which are used as
the basis for offering of shares at auction.
After the equitized enterprise has been issued with
the initial certificate of registration of joint stock company, if debt
verification procedures have been completed but such debts have been not yet
verified when preparing financial statements to serve the transfer into the
joint-stock company, the President or Board of Members of the equitized
enterprise shall direct review and classification of such debts as bad debts
and remaining receivables as follows:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Other debts which have been not yet verified
although verification procedures have been completed shall be transferred to
the joint-stock company for monitoring and collection as prescribed.
3. The equitized enterprise shall transfer all the
debts which are not included in the value of the equitized enterprise
(including bad debts which have been settled by provisions for bad debts in the
last 05 years before the date of enterprise valuation), accompanied with all
relevant documents, to DATC for settling in accordance with regulations of law.
[24]
Debts which are not included in the value of the equitized enterprise that is a
wholly state-owned commercial bank or a wholly state-owned telecommunication
enterprise (including bad debts which have been settled by provisions for bad
debts in the last 05 years before the date of enterprise valuation) shall be
monitored, managed and collected by the enterprise. When such debts are
collected, the joint stock commercial bank or the equitized telecommunication
enterprise is entitled to retain a portion of collected amounts according to
the Ministry of Finance’s regulations applicable to DATC to cover expenses
incurred from the collection of debts, and transfer the remaining amounts to
the Enterprise Arrangement and Development Fund.
4. With regard to prepayments to suppliers of goods
and services (such as house rents, land rents, purchase amounts, salary and
wage, amounts paid for long-term insurance policies, industrial park land rent
which is paid in lump-sum for the entire lease period) which have been recorded
as its business expenses, the enterprise shall, based on the signed contracts
and volume of goods/services supplied, record a decrease in its expenses
(equivalent to the value of the volume of goods/services which are yet to be
supplied or the remaining lease period) and an increase in its prepaid expenses
when carrying out valuation of the equitized enterprise.
Article 16. Payables
1. [25]
The equitized enterprise shall check and verify all payables before the
enterprise valuation is carried out.
If some payables are proved by adequate documents
but not yet verified by the date of enterprise valuation, the President or
Board of Members of the equitized enterprise shall give explanations about such
debts and determine responsibility of entities for verification of such debts
before the equitized enterprise is issued with the initial certificate of
registration of joint stock company (except debts paid to entities as proved by
valid documents) and submit a report to the owner’s representative agency for
including such debts in the enterprise value according to their book values.
The value of such debts shall be also specified in the decision on approval for
the enterprise value and the equitization plan which are used as the basis for
offering of shares at auction.
After the equitized enterprise has been issued with
the initial certificate of registration of joint stock company, if debt
verification procedures have been completed but creditors fail to give
confirmation when preparing financial statements to serve the transfer from a
wholly state-owned enterprise to a joint-stock company, such debts payable
shall be recorded as an increase in state capital. The joint-stock company
(converted from a wholly state-owned enterprise) shall retain documents on such
debts, inherit, monitor and pay such debts at the request of creditors, and
record the paid debts as the enterprise’s expenses in the period.
Deposits and financial instruments (including
certificates of deposit, treasury bills, promissory notes and bonds) of a
wholly state-owned commercial bank shall be checked and verified according to
accounting books. Deposit balances of clients that are juridical persons and
saving deposits, individual deposits and financial instruments must be compared
with accounting books kept by the bank and verified with clients. After the
equitized enterprise has been issued with the initial certificate of
registration of joint stock company, when preparing financial statements to
serve the transfer from a wholly state-owned enterprise to a joint-stock
company, if such debts are not yet verified and confirmed by clients although
verification procedures have been completed, the joint stock commercial bank
shall inherit, monitor, manage and pay debts at the request of legal creditors
in accordance with regulations of law.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2. The equitized enterprise shall mobilize sources
of legal capital to pay due debts that must be paid before the date of
enterprise valuation, or reach a written agreement with the relevant creditor,
in which the conversion from payables into shares must be specified.
The conversion of debts payable on the date of
enterprise valuation into shares must be specified in the equitization plan and
the prospectus of initial offering, and carried out through the successful bid
of the creditor. Accordingly, the creditor shall purchase shares at the IPO and
convert the debts into the equivalent quantity of shares based on the
successful bid of the creditor.
3. Tax debts and other amounts payable to state
budget:
a) The equitized enterprise shall pay taxes and
other debts to the state budget before conversion;
b) If the equitized enterprise fails to pay taxes
and other amounts payable to state budget as prescribed, the JSC shall inherit
all of such debts.
4. During the equitization, if the enterprise is
unable to pay overdue loan debts to credit institutions (including the Vietnam
Development Bank) due to its business losses, such debts shall be settled in
accordance with the State regulations on settlement of outstanding debts.
Article 17. Provisions, losses and profits
1. Unused provisions for devaluation of
inventories, financial investments or bad debts (if any) as at the date of
enterprise valuation may be used for offsetting losses. The remaining amounts
shall be reversed and recorded as the equitized enterprise’s income.
2. The equitized enterprise is entitled to the
balance of provisions for warranty of goods or construction works as at the
date of enterprise valuation corresponding to the warranty obligations stated
in effective contracts.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
4. The amounts of provisions for risks of the bank
or provisions for insurance operations that remain after they are used for offsetting
losses may be kept by the equitized enterprise but shall be included in the
state capital at the equitized enterprise.
5. The amounts of profits that remain after they
are used for offsetting the losses incurred in previous years (if any) in accordance
with regulations of the Law on Corporate Income Tax, making contributions to
the Fund for Science and Technology Development as prescribed by law, and
paying corporate income tax shall be distributed in accordance with regulations
of law applicable to state-owned enterprises in force at the date of enterprise
valuation.
6. After losses have been offset against according
to these provisions, the equitized enterprise shall cooperate with relevant
authorities in settling outstanding debts owned to credit institutions
(including Vietnam Development Bank) as at the date of enterprise valuation in
accordance with regulations of law and the provisions of Clause 4 Article 16 of
this Decree.
Article 18. Capital of equitized enterprises
invested in other enterprises
1. If the equitized enterprise inherits the stakes
in other enterprises, the stakes shall be determined according to the rules
stated in Article 32 of this Decree.
2. If the equitized enterprise does not inherit the
stakes in other enterprises, the owner’s representative agency shall:
a) reach an agreement with capital contributors to
transfer the stakes to another state-owned enterprise;
b) sell the stakes to another partner or investor
as prescribed by law;
c) The equitized enterprise failing to sell or
transfer the stakes to another partner or investor by the date of enterprise
valuation shall inherit such stakes in accordance with the provisions of Clause
1 of this Article.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 19. Unused reward or welfare fund and
reward fund for enterprise’s managers and controllers
1. The unused reward fund on the date of enterprise
valuation shall be used to offset extra payments for employees (if any), and
payments made to employees in accordance with regulations applicable to the
state-owned enterprise, and the remaining amount shall be distributed to
employees of the enterprise based on the number of their working months at the
equitized enterprise. The distribution of unused reward fund to employees shall
be completed before the date of equitization.
2. The unused welfare fund on the date of
enterprise valuation shall be used to offset extra payments for employees (if
any), and payments made to employees in accordance with regulations applicable
to the equitized enterprise, and the remaining amount shall be distributed to
employees, managers and controllers of the enterprise based on the number of
their working months at the equitized enterprise. The distribution of the
unused welfare fund to employees, managers and controllers of the enterprise
shall be completed before the date of equitization.
3. The unused reward fund for the enterprise’s
managers and controllers on the date of enterprise valuation shall be used in
accordance with regulations applicable to the state-owned enterprise and
settled according to the provisions of Point e Clause 2 Article 21 of this
Decree.
4. When a parent company is equitized, the unused
funds mentioned in Clause 1, Clause 2 and Clause 3 this Article shall be
settled following the rule that the fund of the enterprise (parent company or
rank-II enterprise) shall be distributed to employees and managers thereof.
Article 20. Unused enterprise arrangement fund
and Fund for Science and Technology Development
1. The unused enterprise arrangement fund of the
equitized enterprise (if any) shall be considered the state capital and
transferred to the Enterprise Arrangement and Development Fund.
2. The unused fund for science and technology
development shall be inherited, managed or used by the enterprise or the JSC.
Article 21. Settlement of financial issues on
the official date of equitization
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2. From the day on which the equitized enterprise
is issued with the initial certificate of registration of joint-stock company,
the equitized enterprise shall make financial statements according to financial
policies for state-owned enterprises as the basis for equitization, in which:
a) The unused provisions for devaluation of
inventories, financial investments or bad debts (if any) may be used may be
used for offsetting losses. The remaining amounts shall be reversed and
recorded as the equitized enterprise’s income.
The remainder of the provisions for warranty of
goods or construction works (if the concluded contract or warranty period is
effective) of the equitized enterprise shall be deducted according to the
concluded contract and retained to provide warranty for goods or construction
works under terms and conditions of the concluded contract.
The equitized enterprise shall accompany the
equitization dossier with detailed statement of each type of goods or
construction works. The unused provisions for warranty of goods or construction
works shall be paid to the Enterprise Arrangement and Development Fund within
30 days after the warranty period expires.
If the JSC fails to pay these amounts in full and
on schedule as prescribed, it shall also incur interests in accordance with
regulations on management and use of the the Enterprise Arrangement and
Development Fund.
b) The exchange rate difference earned from
revaluation of currency items converted from a foreign currency on the official
date of equitization shall be revalued in accordance with regulations and shall
not be recorded as its income. The exchange rate difference accrued on such
date shall be transferred to the JSC (after completing conversion of the
state-owned enterprise) for monitoring.
c) The equitized enterprise shall record the
after-tax profits and/or dividends received from financial investments
(according to the resolutions of GMSs or Boards of members of the capital
receiving organizations) that arise from the date of enterprise valuation to
the official date of equitization but are not yet realized as increases in its
financial income and in receivables.
d) [27]
(abrogated)
dd) Distribution of profits and making of
contributions to funds shall comply with prevailing regulations applicable to
state-owned enterprises.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Contributions shall be made according to ranking
of the enterprise in the year preceding the official date of equitization.
- Contributions shall be made according to profits
which are used for making contributions to such funds as prescribed.
- The contribution to funds is equal to that made
according to regulations on profit distribution applicable to state-owned
enterprises divided by 12 and multiplied by the number of months from the
beginning of the year until the official date of equitization.
e) The equitized enterprise shall manage and use
the reward fund for enterprise’s managers and controllers on the official date
of equitization. If there is still unused fund after being settled, the
equitized enterprise shall request the owner’s representative agency to
consider deciding to transfer it to the Enterprise Arrangement and Development
Fund.
3. Within 90 days from the issue date of the
initial certificate of registration of joint-stock company, the equitized
enterprise shall:
a) make the financial statements as at the date of
initial registration of joint-stock company;
b) carry out the financial statement audit;
c) carry out finalization of taxes and other
amounts payable to state budget with tax authorities;
d) after fulfilling the tasks mentioned in Points
a, b and c of this Clause, request the owner’s representative agency to
consider giving approval of the state capital value on the official date of
equitization and statements of proceeds from equitization, payment of benefits
paid to redundant employees and equitization costs.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
5. Based on the approval decision issued by the
owner’s representative agency, the equitized enterprise shall remake the
financial statements as at the issue date of the initial certificate of
registration of joint-stock company for using as the basis for transfer to the
JSC.
The financial statements shall be remade according
to modified contents about the settlement of financial issues prescribed
herein, statements of proceeds from equitization, equitization costs and
payment of benefits paid to redundant employees, and the decision to disclose
the actual state capital value on the official date of equitization (without
modifying according revaluation results).
6. The after-tax profits arising from the date of
enterprise valuation to the date of initial registration of joint-stock company
shall be used for offsetting the amount of state capital adjusted due to
business losses (if any); any remaining amounts shall be distributed and
contributed to the funds prescribed in Point dd Clause 2 of this Article.
After deducting relevant expenses as prescribed,
the profit amount paid to the development investment fund and the increase in
state capital arising from the date of enterprise valuation to the official
date of equitization shall be paid to the Enterprise Arrangement and
Development Fund.
7. The equitized enterprise shall report the
decrease in state capital to the owner’s representative agency that shall then
cooperate with relevant authorities in inspecting, identifying the reasons
thereof and determining responsibility of relevant entities, and taking the
following actions:
a) In case of objective reasons (such as acts of
God, enemy-inflicted destruction; changes in polices made by the State or
changes in international market and other force majeure events), the equitized
enterprise shall request the owner’s representative agency to consider deciding
to use the proceeds from offering of shares of the equitized enterprise for
offsetting losses after deducting compensation from insurer (if any).
If the proceeds from offering of shares are not
enough to offset the decrease in the state capital, the owner’s representative
agency shall, with the approval of the GMS, consider issuing decision to
decrease the state capital in the JSC, the charter capital and charter capital
structure accordingly.
b) In case of subjective reasons:
- If any losses are incurred due to failure to
settle financial issues in accordance with State regulations, the
responsibility to make compensation of relevant entities, including the
enterprise, consulting firm, audit organization, State Audit Office of Vietnam
and the authority issuing the equitization decision shall be identified.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- If an entity is unable to make compensation
according to a competent authority's decision due to force majeure events,
remaining losses shall be settled in accordance with the provisions of Point a
of this Clause.
8. With regard to the assets prescribed in Clause 4
Article 10 of this Decree, the equitized enterprise shall manage and transfer
them to the DATC within 15 working days from the day on which the owner’s
representative agency issues a decision to transfer these assets to the DATC.
Chapter III
VALUATION OF THE EQUITIZED ENTERPRISE
Section 1. ENTERPRISE VALUATION ORGANIZATION
Article 22. Valuation methods
1. [28]
The consulting firm providing enterprise valuation service shall select the
asset-based method and at least another valuation method to determine the
enterprise value in accordance with regulations of law on pricing and valuation
for submission to the owner’s representative agency for consideration.
2. The enterprise value and the state capital value
of the enterprise determined and disclosed shall not be lower than those
determined adopting the asset-based method prescribed in Section 2 of this
Chapter.
Article 23. Disclosure of enterprise value
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
The period for settlement of financial issues and
provision of enterprise valuation consulting service (from the date of
enterprise valuation to the disclosure date of enterprise value) shall not
exceed 12 months (or 15 months if the enterprise has to undergo state audit
according to Clause 1 Article 26 of this Decree).
If the value of the equitized enterprise is yet to
be disclosed after the aforesaid period, the owner’s representative agency
shall decide to change the date of enterprise valuation to serve settlement of
financial issues and enterprise valuation in accordance with regulations; and
determine the responsibility to pay the costs incurred due to delayed
disclosure of the enterprise value.
2. The owner’s representative agency shall consider
deciding and disclosing the enterprise value within 15 working days from the
day on which all documents are received (including the conclusion given by the
State Audit Office of Vietnam regarding the enterprises mentioned in Clause 1
Article 26 of this Decree).
3. Within 15 working days from the day on which the
owner’s representative agency gives a decision to disclose the enterprise
value, the equitized enterprise shall manage and transfer debts and assets
excluded from the enterprise value as prescribed in Clause 2 Article 14, Clause
2 and Clause 3 Article 15 of this Decree to the DATC; continue monitoring,
managing and recording other assets according to their book values on the date
of enterprise valuation.
Article 24. Use of enterprise valuation results
The enterprise valuation results disclosed by the
owner’s representative agency shall be considered an important basis for
determining the starting price for the initial offering of shares of the
equitized enterprise.
Article 25. Modification of enterprise value
1. The owner’s representative agency shall consider
modifying the disclosed enterprise value if:
a) There are force majeure events (acts of God,
enemy-inflicted destruction, changes in polices made by the State or other
force majeure events) that affect the values of the enterprise’s assets;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
2. Modification of the disclosed enterprise value
prescribed in Clause 1 of this Article shall only apply to the equitized
enterprise that has not yet conducted the IPO.
3. [29]
After 09 months from the disclosure date of enterprise value, if the enterprise
fails to conduct the IPO, the enterprise revaluation shall be required, unless
otherwise decided by the Prime Minister at the request of the owner’s
representative agency provided that the IPO must be conducted within 12 months
from the disclosure date of enterprise value.
Article 26. State audit of equitized enterprises
1. Regulated entities and scope of audit:
Based on the enterprise valuation results provided
by the consulting firm and opinions given by the owner’s representative agency,
the State Audit Office of Vietnam shall audit the enterprise valuation results
and settlement of financial issues of the following enterprises:
a) Wholly state-owned single-member LLCs which are
parent companies of state economic groups or corporations (including
state-owned commercial banks);
b) State-owned enterprises (including parent
companies in groups of parent company – subsidiary companies and wholly
state-owned single-member LLCs) that have state capital of at least VND 1.800
billion as recorded in accounting books on the date of enterprise valuation;
c) Single-member LLCs prescribed in Clause 3
Article 2 of this Decree (rank-II enterprises) that have the owner's equity of
at least VND 1.800 billion as recorded in accounting books on the date of
enterprise valuation.
d) Other
single-member LLCs that are subject to state audit at the request of the Prime
Minister or the owner’s representative agency.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Within 05 working days from the receipt of the
Prime Minister’s request for audit of the enterprises mentioned in Point d
Clause 1 of this Article, the owner’s representative agency shall give a notice
of the schedule (road map) for equitization of these enterprises to the State
Audit Office of Vietnam that shall then work out the program or plan for audit
of enterprise valuation results and settlement of financial issues of these
enterprises.
3. Responsibilities of the State Audit Office of
Vietnam and relevant authorities:
a) After obtaining the enterprise valuation
results, the owner’s representative agency shall send a written request,
accompanied with relevant documents, to the State Audit Office of Vietnam for
audit of enterprise valuation results and settlement of financial issues before
officially disclosing the enterprise value;
b) Within 10 working days from the receipt of the
request from the owner’s representative agency, the State Audit Office of
Vietnam shall conduct the audit of enterprise valuation results and settlement
of financial issues of the equitized enterprise. The audit results must be
given within 60 days from the day on which the audit is conducted. The State
Audit Office of Vietnam shall assume responsibility for their audit results in
accordance with regulations of law;
c) The equitized enterprise and consulting firm
shall provide explanations and adequate documents concerning the enterprise
valuation and settlement of financial issues at the request of the State Audit
Office of Vietnam.
4. Handling of audit results:
Based on audit results produced by the State Audit
Office of Vietnam, the owner’s representative agency shall consider issuing a
decision to disclose the enterprise value and take the next step of the
equitization process.
If the owner’s representative agency does not
concur with the audit results given by the State Audit Office of Vietnam, it
shall reach an agreement on the audit results with the State Audit Office of
Vietnam or request the Prime Minister to consider and make final decision.
Section 2. ASSET-BASED VALUATION METHOD
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. [30] The total actual value of the
equitized enterprise shall be the value of all of its assets on the date of
enterprise valuation after the revaluation is made with due account taken of
the enterprise’s profitability.
The actual value of the owner’s equity at the
equitized enterprise specified in the decision to disclose the enterprise value
is total actual value of the equitized enterprise after deducting debts payable
and unused funding for non-profit activities (if any).
2. [31]
When a parent company undergoes the equitization, the owner’s equity at the
equitized enterprise shall be total actual value of the owner’s equity at that
parent company.
3. When valuing a financial institution or credit
institution adopting the asset-based method, financial statement audit results
may be used for determining the value of cash assets, debts and other assets
provided that the stocktaking and valuation of fixed assets, investments in
other enterprises and land-use rights must be carried out in accordance with
the State regulations.
4. Intangible assets (excluding land-use rights)
must be revalued and included in the enterprise value if the equitized
enterprise wishes to continue using them. Revaluation of these intangible
assets shall be conducted by qualified valuation organization in accordance
with regulations of law on valuation.
5. [32]
The value of the equitized enterprise’s investments in joint-stock companies
from which it receives share certificates without making any payments must be
re-determined according to Article 32 of this Decree in respect of total share
certificates owned by the equitized enterprise (including share certificates
received, managed and monitored on notes to financial statements) and the
quantity of share certificates to be received after the enterprise valuation
according to resolutions issued by GMSs by the time of enterprise valuation.
6. The value of assets created under a
build-operate-transfer (BOT) contract shall be determined according to their
book values and investors should be informed that these assets will be transferred
to competent authorities upon expiry of this contract.
7. With regard to assets that are infrastructure
facilities of an industrial park (excluding rented land-use rights) that an
enterprise has invested in and has entered into a lease agreement, in which the
rent unit price is specified, and collected the lump-sum rent for the entire
lease period, the revaluation of these assets upon the enterprise valuation
shall not be required. The JSC shall pay the land rent in accordance with
regulations of the Law on land. Assets that are the remaining part of
infrastructure facilities of the industrial park shall be revalued as
prescribed.
8. If assets have been liquidated or sold within
the period from the date of enterprise valuation to the day on which the
valuation is really carried out by the consulting firm (i.e. they no longer
exist when the valuation is carried out), the enterprise shall record such
assets in accordance with regulations on financial management regarding
proceeds and costs of liquidation or selling of assets. When carrying out the
valuation, the consulting firm shall base on actually received proceeds when
liquidating or selling these assets provided they shall not be lower than their
book values.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. Values of the assets mentioned in Clauses 1, 2
and 4 Article 14 of this Decree.
2. Irrecoverable debts.
3. Investments in other enterprises as prescribed
in Point a and Point b Clause 2 Article 18 of this Decree.
4. Assets of public service providers that generate
revenues in case of equitization of a parent company (except vocational
education and training institutions, and health facilities), and assets serving
non-business activities which shall not be inherited by the equitized enterprise
and shall be transferred to relevant authorities by the owner’s representative
agency for liquidation.
5. The person having the power to decide the
enterprise value shall decide whether to add the amounts mentioned in Clauses
1, 2, 3 and 4 of this Article to the enterprise value and take legal
responsibility for such decision.
Article 29. Grounds for determining an
enterprise’s actual value
1. Figures stated in accounting books of the
enterprise on the date of enterprise valuation.
2. Documents on stocktaking, classification and
quality assessment of the enterprise’s assets on the date of enterprise
valuation.
3. Market prices of assets on the date of
enterprise valuation.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 30. Value of land-use rights
1. The value of land-use rights over the land area
allocated to use for the purposes of building houses for sale and building
infrastructure facilities for transfer or for lease according to the equitized
enterprise’s land use plan approved by a competent authority shall be revalued
and added to the enterprise value. To be specific:
a) The land price used for determining the value of
land-use rights shall be the specific land price for the region where the
enterprise’s land area is located as announced by the People’s Committee of the
province or central-affiliated city where the enterprise’s land area is located
according to Clause 3 and Point d Clause 4 Article 114 of the Law on land;
b) The positive difference between the value of
land use rights after revaluation as prescribed in Point a of this Clause and
that specified in accounting books (if any) shall be paid to state budget.
If the value of land use rights which is determined
according to the land price prescribed in Point a of this Clause is lower than
that specified in accounting books, the latter shall be taken into account upon
the enterprise valuation.
c) If the enterprise has not to pay land levy, as
prescribed by the Law on land, for its allocated land areas, including those
used for producing and supplying public or welfare services/goods such as green
parks, urban environment works, coach stations or irrigation works, etc., these
land areas shall be excluded when determining the value of land-use rights upon
enterprise valuation. Land areas used for public works that have safety
corridors as prescribed in the Law on land shall be also excluded from the
enterprise value according to a competent authority’s decision. The equitized
enterprise shall manage and use these land areas for defined purposes in
conformity with regulations of the Law on land.
2. With regard to the remaining land area (after
deducting the land areas prescribed in Clause 1 of this Article) as defined in
the land use plan upon equitization approved by a competent authority as
prescribed in Article 30a of this Decree, the enterprise shall enter into a
fixed-term land lease in accordance with regulations of the Law on land and pay
annual land rents.
The land rents shall be paid in accordance with
regulations of the Law on land and shall not be included in the value of the
equitized enterprise. [34]
The JSC shall continue using the land areas
directly leased by the State or sub-leased by other lessees with lump-sum
payment of land rents made to State for the remaining lease period. The payment
that the enterprise has made to the State or to receive transfer of land use
rights but has not yet been recorded in the enterprise’s income by the date of
enterprise valuation shall be recorded as the prepaid expenses and deducted
from the annual land rents paid by the JSC according to the specific land price
announced by the relevant provincial People’s Committee.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3. In case the land area is used by a national
defense and security enterprise that is undergoing equitization and included in
the planning for land areas used for national defense and security purposes but
is not yet used for such purposes, the Ministry of National Defense of
Vietnam/the Ministry of Public Security of Vietnam shall cooperate with the
People’s Committee of province or central-affiliated city where the land area
is located in deciding whether to permit the enterprise to use this land area
until a land appropriation decision is issued by a competent authority in
accordance with Clause 3 Article 148 of the 2013 Law on land.
4. [35]
After obtaining the initial certificate of registration of joint-stock company,
the JSC shall perform financial obligations, complete procedures for land
allocation, land lease and issuance of certificate of land use rights and
ownership of house and other property on land in accordance with regulations of
the Law on land.
5. The JSC converted from the enterprise mentioned
in Clause 2 or Clause 3 Article 2 of this Decree shall manage and use that
enterprise’s land areas for proper purposes in conformity with the land use
plan approved by a competent authority in accordance with regulations of the
Law on land.
6. [36]
(abrogated)
Article
30a. Land use plan upon equitization[37]
1. The land use plan upon equitization is the
collection of proposals on land use form in conformity with local land use
planning/plan and construction planning (if any) which have been approved and
published with respect to land areas managed and used by the equitized
enterprise and single-member LLCs 100% of charter capital of which is held by
the equitized enterprise by the date of the enterprise valuation. The land use
plan shall be submitted to competent authorities prescribed in Clause 5 of this
Article for consideration.
2. Based on the house and land
rearrangement/treatment plan formulated according to the law on management and
use of public property, the land use plan formulated according to Decree No.
118/2014/ND-CP and approved by competent authorities, the demands for land of
the enterprise upon equitization and the date of enterprise valuation, the
Steering Board shall direct the enterprise to formulate the land use plan upon
equitization which covers entire land areas managed and used by the equitized
enterprise and single-member LLCs 100% of charter capital of which is held by
the equitized enterprise by the date of the enterprise valuation (including
land areas which are subject to neither the house and land
rearrangement/treatment prescribed in the law on management and use of public
property nor the land use plan prescribed in Decree No. 118/2014/ND-CP, if
any).
3. The equitized enterprise shall request the
owner’s representative agency (the equitized enterprise that is an enterprise
prescribed in Clause 3 Article 2 of this Decree shall request the Board of
Members or President of the wholly state-owned enterprise prescribed in Clause
2 Article 2 of this Decree) to send written request to local governments (at
the places where land areas managed and used by the enterprise are located) to
get their opinions about the land use plan upon equitization.
4. Within 03 months from the receipt of the request
from the owner’s representative agency as prescribed in Clause 3 of this
Article, People’s Committees of provinces or central-affiliated cities (where
land areas managed and used by the enterprise are located) shall give their
written opinions about the land use plan upon equitization.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Based on the equitized enterprise’s house and land
rearrangement/treatment plan formulated according to the law on management and
use of public property, the land use plan formulated according to Decree No.
118/2014/ND-CP and approved by competent authorities, demands for land under
the land use plan upon equitization, local land use planning/plan and
construction planning (if any), People’s Committees of provinces or
central-affiliated cities (where land areas managed and used by the enterprise
are located) shall give their opinions about local land areas to be used by the
enterprise after the equitization. People’s Committees of provinces or
central-affiliated cities (where land areas managed and used by the enterprise
are located) shall give their opinions about the following:
- The consent to the land use plan upon
equitization with respect to land areas to which there are no changes compared
to the house and land rearrangement/treatment plan approved by a competent
authority according to the law on management and use of public property and the
land use plan formulated according to Decree No. 118/2014/ND-CP.
- Opinions about the compliance with local land use
planning/plan and construction planning (if any), land use forms and purposes of
land areas to which there are no changes compared to the house and land
rearrangement/treatment plan and the land use plan formulated according to
Decree No. 118/2014/ND-CP, land areas allocated or transferred to or leased by
the enterprise after the house and land rearrangement/treatment plan and the
land use plan formulated according to Decree No. 118/2014/ND-CP have been
approved until the date of enterprise valuation, and those which are subject to
neither the house and land rearrangement/treatment prescribed in the law on
management and use of public property nor the land use plan prescribed in
Decree No. 118/2014/ND-CP, if any.
If the land use plan upon equitization is not yet
conformable with local land use planning/plan and construction planning (if
any) or the land use purposes defined in the approved house and land
rearrangement/treatment plan formulated according to the law on management and
use of public property or the approved land use plan formulated according to
the Decree No. 118/2014/ND-CP, the enterprise shall make adjustments to the
land use plan. If the enterprise fails to make adjustments to the land use
plan, the owner’s representative agency shall request the enterprise to return
such land areas to the Government in accordance with regulations of the Law on
land to serve other purposes. The assets on the land areas to be returned to
the Government (if any) shall be transferred to local governments for
management. The residual values of such assets as recorded on accounting books
at the date of enterprise valuation shall be recorded as decrease in assets and
decrease in the owner’s equity.
- Specific prices of allocated land areas, as
prescribed in Clause 1 Article 30 of this Decree, at the date of enterprise
valuation as prescribed in Clause 3 and Point d Clause 4 Article 114 of the Law
on land.
5. Within 01 month from the receipt of adequate
opinions from local governments about the land use plan upon equitization as
prescribed in Clause 4 of this Article, the owner’s representative agency shall
issue a decision to approve the land use plan upon equitization and ensure that
that decision must be issued before the decision to disclose the enterprise
value is made. With regard to the enterprises prescribed in Clause 3 Article 2
of this Decree, the Boards of Members or Presidents of wholly state-owned
enterprises prescribed in Clause 2 Article 2 of this Decree shall issue
decisions to approve their land use plans upon equitization.
Owner’s representative agencies or Boards of
Members or Presidents of wholly state-owned enterprises prescribed in Clause 2
Article 2 of this Decree shall assume responsibility to take actions against
relevant entities for their failure to complete the approval for land use plans
upon equitization by the prescribed deadline resulting in the enterprise
revaluation as prescribed in Clause 1 Article 23 of this Decree. Such
violations shall be considered as a basis for performance assessment and
ranking of officials and enterprise managers in accordance with regulations of
law.
6. With regard to land areas allocated or
transferred to or leased by the equitized enterprise after the enterprise
valuation and by the time of initial registration of the joint-stock company,
the equitized enterprise shall rearrange or settle such land areas in
accordance with regulations of law on management and use of public property,
complete procedures for land allocation or lease by the Government and fulfill
financial obligations in accordance with regulations of Law on land and
relevant laws.
7. The Ministry of Natural Resources and
Environment of Vietnam shall provide guidelines on contents of the land use
plan upon equitization.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. The goodwill of an equitized enterprise includes
the brand value and development potential value.
2. The goodwill of the equitized enterprise shall
be determined as follows:
a) The brand value shall be
determined on the basis of actual expenses for creating and protecting the
brand and trade names in the operation of the enterprise over 5 years before
the date of enterprise valuation, including costs of establishing the
enterprise, employee training, advertising, domestic and foreign dissemination
of information for product or company introduction; or developing the
enterprise’s website.
[38]
(abrogated)
b) The development potential value added to the
value of the equitized enterprise means the development potential of the
enterprise assessed on the basis of the enterprise’s profitability in the
future when comparing the rate of return of the enterprise with the interest
rate of the government bonds as follows:
Development
potential value
=
State capital
value stated in accounting books on the date of enterprise valuation
x
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
-
Interest rate of
the successful bid of government bonds for 5 years quoted by the Ministry of
Finance of Vietnam on the last date before the date of enterprise valuation
To be specific:
- The state capital value stated in accounting
books on the date of enterprise valuation shall be the total actual value after
deducting debts payable and unused funding for non-profit activities (if any)
and excluding the exchange rate difference earned from revaluation of currency
items converted from a foreign currency mentioned in Clause 3 Article 17 of
this Decree.
- The state capital shall be determined according
to the paid-in capital – account No. 411, development investment fund – account
No. 414 and funding for capital construction expenditures – account No. 441
stated in the Circular No. 200/2014/TT-BTC dated December 22, 2014 by the
Ministry of Finance of Vietnam. The state capital of the equitized enterprise
that is a credit institution shall be determined according to the SBV’s
guidelines.
- The rate of return after tax shall be determined
as follows:
Rate of return
after tax over state capital for 5 years on average before the date of
enterprise valuation
=
Rate of return
after tax for 5 years on average preceding the date of enterprise valuation
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
State capital
stated in accounting books for 5 years on average preceding the date of
enterprise valuation
The state capital stated in accounting books for 5
years on average shall be determined according to the total annual state
capital on average divided by (:) 5. The annual state capital on average shall
be determined according to the state capital at the beginning of year plus the
state capital at the end of year divided by (:) 2.
Article 32. Determination of the equitized
enterprise’s stakes in other enterprises
1. The stake that the equitized enterprise invests
in a single-member LLC 100% of capital of which is contributed by the equitized
enterprise shall be determined as follows:
a) The stake that the equitized enterprise invests
in a rank-II enterprise shall be have its value recalculated according to
provisions of Chapter II and Chapter III of this Decree;
b) Where the rank-II enterprise has a stake in
another single-member LLC (hereinafter referred to as “rank-III enterprise”),
the stake of the rank-II enterprise in the rank-III enterprise shall be
determined according to provisions of Points a, b and c Clause 3 this Article;
c) Where the rank-II enterprise is established and
operating in a foreign country, the stake in this enterprise shall determined
in accordance with in Points a, b and c Clause 3 this Article.
The value of the equitized enterprise’s stakes in
oversea rank-II and rank-III enterprises shall be converted at the foreign
exchange buying rate quoted by the commercial bank where the equitized
enterprise regularly makes transactions on the date of enterprise valuation.
2. The stake that the equitized enterprise invested
in the JSC listed on the securities market shall be determined according to the
reference price of the share certificates traded on the securities market on
the date of enterprise valuation. If there is no transaction made on the date
of enterprise valuation, the stake shall be determined according to the
reference price of the transaction preceding the date of enterprise valuation.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
If the price on the securities market or on the
UPCOM is lower than the face value (i.e. VND 10.000) but the JSC having stake
invested by the equitized enterprise that operates profitably, the stake of the
equitized enterprise invested in the JSC shall be determine according to
provisions of Points a and b Clause 3 this Article.
3. The stake of the equitized enterprise in another
enterprise (except the enterprises stated in Clause 1 and Clause 2 of this
Article) shall be determined on the basis of the rate of actual stake
multiplied (x) by the owner's equity value of that enterprise as follows:
a) The rate of actual stake of the equitized
enterprise shall be the rate (%) of the capital amount actually contributed by
the equitized enterprise over the total paid-in capital (the owner’s equity) of
the invested enterprise;
b) The owner's equity value of the invested
enterprise shall be determined according to financial statements audited on the
same date with the enterprise valuation. If such financial statements have not
been audited, the owner’s equity value shall be determined according to
unaudited financial statements on the date of enterprise valuation. If the
invested enterprise fails to make the financial statement on the same date with
the enterprise valuation, the financial statement made on the day preceding the
date of enterprise valuation shall be employed;
[39]
The representative of the equitized enterprise’s stake in the invested enterprise
shall review and give opinions about changes in the period for which the
invested enterprise’s financial statements are not prepared at the same date
with the enterprise valuation, and submit for reports on such changes to the
owner’s representative agency for considering and making decision on the
equitized enterprise’s stake.
c) If the actual value of the equitized
enterprise’s stake in an enterprise is lower than that stated in the equitized
enterprise’s accounting books after revaluation or recalculation, it shall be
determined according to the actual value recalculated provided that it is not a
negative number;
d) The equitized enterprise’s stake in the JSC or a
multi-member LLC operating in a foreign country shall be calculated according
to the foreign exchange buying rate of the commercial bank where the equitized
enterprise regularly makes transactions on the date of enterprise valuation.
Chapter IV
INITIAL OFFERING, MANAGEMENT AND USE OF PROCEEDS
EARNED FROM EQUITIZATION
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. According to the state capital value stated in
accounting books of the equitized enterprise and business plans for the
following years after it is converted into the JSC, the owner’s representative
agency shall decide the scale of the charter capital as follows:
a) If the state capital value stated in accounting
books of the enterprise is higher than the charter capital used for the
enterprise operation, the owner’s representative agency shall determine the
charter capital suitable for its actual needs. The difference between the state
capital value stated in accounting books of the enterprise and the determined
charter capital shall be transferred to the Enterprise Arrangement and Development
Fund.
b) In case of issuance of additional shares, the
charter capital shall be determined according to the state capital value stated
in accounting books and the value of additionally issued shares calculated at
the bar value of share certificates.
2. Based on the determined charter capital, the
owner’s representative agency shall decide the structure of initial share
capital, including:
a) Shares held by the State as per classification
criteria for state-owned enterprises announced by the Prime Minister in each
period.
In case of special enterprises playing an important
part in local economic development and serving sectoral development strategies
or state-owned economic groups, such as seaport management and operation or the
cases where the State holds 36% of the charter capital and other specific
cases, the owner’s representative agency shall request the Prime Minister to
make a specific decision on the number of shares to be held by the State and
the number of supervoting shares in accordance with provisions of Clause 3
Article 113 and Article 116 of the Law on Enterprises.
b) Shares sold to the labor union of the equitized
enterprise.
The labor union of the equitized enterprise is
entitled to use its budget (according to Article 26 of the 2012 Law on Labor
Union; not mobilizing or applying for loan) to purchase shares provided that
they shall not exceed 3% of the charter capital. The purchased shares shall be
held by the labor union and shall not be transferred within 03 years from the date
of equitization.
The selling price of shares to the labor union of
the equitized enterprise shall be the face value (VND 10.000 per share).
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
d) Shares sold to strategic investors (if any) as
prescribed in Clause 3 Article 6 of this Decree;
dd) Shares sold at public auctions accounting for
at least 20% of the charter capital.
3. If the number of discounted shares offered to
the enterprise’s employees (according to the maximum discount rate) is greater
than the number of remaining shares to be offered (after deducted from the
number of shares held by the State and the number of shares sold to investors
and labor unions as prescribed in Points a, b, d and dd Clause 2 this Article)
and the enterprise does not have control shares held by the State, the owner’s
representative agency shall consider reducing the number of shares held by the
State to increase the number of discounted shares sold to employees.
Article 34. Public auctions
1. A public auction is available to all investors
whether they are organizations or individuals, domestic or foreign investors.
2. The public auction shall be held at the SE. If
the face value of shares offered (by the equitized enterprise) is under VND 10
billion, the owner’s representative agency may consider conducting the auction
at a securities company, property auction service center or enterprise, as
prescribed in the Law on property auction.
3. [40]
At least 01 month before the initial offering, the Steering Board shall
cooperate with the SE or the auction organization to disclose information at
the enterprise, the auction place and on the mass media and the Government’s
web portal.
4. The selling price shall be the successful bid
offered by each investor. The investor shall be entitled to purchase shares at
his/her successful bid, provided it is not lower than the starting price.
Article 35. Underwriting
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Underwriting for issuance of bonds to foreign
investors shall ensure the compliance with regulations of law on the rights to
purchase or contribute capital of foreign investors in Vietnamese enterprises.
If the shares are not completely sold, the
underwriter shall purchase the remaining shares at the agreed price under the
underwriting agreement provided that it shall not be lower than the starting
price.
2. The underwriter shall perform rights and
obligations defined in the Law on securities and securities market and the
underwriting agreement concluded between the underwriter and the authorized
representative of the equitized enterprise.
Article 36. Direct negotiation
1. Direct negotiation means an offering method
whereby shares will be sold to investors according to the results of
negotiation between the Steering Board (or its authorized organization) and
each investor.
2. The selling price shall be agreed upon according
to provisions of Points d and e Clause 3 Article 6 and Clauses 2, 4 Article 37[41] of this Decree.
Article 37. Settlement of unsold shares and
adjustment of charter capital and charter capital structure according to share
offering results [42]
1. Based on the equitization plan approved by a
competent authority, the Steering Board shall sell shares to employees and the
trade union at the enterprise before the public offering. The Steering Board
shall report the number of shares which the employees and trade union refuse to
buy according to the equitization plan to the owner’s representative agency for
offering to the public through auction.
2. Based on the actual share offering results, the
Steering Board shall request the owner’s representative agency to issue a
decision to adjust the charter capital and charter capital structure defined in
the approved equitization plan.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
3. If there are no investors subscribing to shares,
based on the result of offering of shares to employees and the trade union at
the enterprise, the enterprise shall follow procedures for conversion into a
JSC and adjusting its charter capital and charter capital structure according
to Clause 2 of this Article.
4. If there is only one investor subscribing to
shares, the Steering Board shall conduct negotiation to offer shares to that
investor according to the number of shares subscribed by the investor, provided
that the agreed-upon selling price shall not be lower than the starting price.
If the investor refuses to buy shares, the equitized enterprise shall comply
with the provisions in Clause 3 of this Article.
5. After the public auction, if all successful
bidders refuse to buy shares, the equitized enterprise shall comply with the
provisions in Clause 3 of this Article.
6. After the public auction, the unsold shares
(including the number of shares refused by successful bidders) shall be dealt
with as follows:
a) The Steering Board shall notify and conduct
negotiation to offer shares to the investors that have lawfully participated in
the auction (except bidders that are successful at the auction for their entire
subscribed number of shares) according to their subscribed number of shares and
their bids which are considered in descending order.
b) If shares still remain unsold after they are
sold according to Point a Clause 6 of this Article, the Steering Board shall
continue notifying and conduct negotiation to offer shares to the investors
that are successful at the auction for their entire registered quantity of
shares (except successful bidders that have refused to buy shares) according to
their bids which are considered in descending order.
c) The equitized enterprise shall deal with the
unsold share certificates mentioned in Points a and b of this Clause in
accordance with Clause 3 this Article.
Article 38. Time limit for completing share offering
Shares shall be sold within 04 months from the day
on which the equitization plan is approved (by both underwriting and direct
negotiation).
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
1. Determination of the proceeds earned from the
initial offering
a) [43]
Within 05 working days from the prescribed deadline for payment by investors
participating in the public auction, the auction organization shall transfer
the entire proceeds from the IPO to the equitized enterprise in order to make
payments to redundant employees, cover equitization costs as estimated in the
approved equitization plan, and retain an amount equal to the value of
additionally issued shares calculated according to the face value and primary
price (the book value of shares offered corresponding to the rank-I
enterprise’s stake in a rank-II enterprise when it is equitized into a rank-II
enterprise). The remaining amounts shall be paid to the Enterprise Arrangement
and Development Fund;
b) [44]
Within 05 working days from the prescribed deadline for payment by the trade
union and employees, the Steering Board shall transfer the entire proceeds from
the offering of shares to the trade union and employees to the Enterprise
Arrangement and Development Fund.
c) Within 20 days from the deadline for payment by
the bidders, the Steering Board shall direct the enterprise to complete the
offering of shares in accordance with the provisions of Clause 4 Article 37[45]. Within 05 days
from the deadline for payment, the Steering Board shall direct the enterprise
to transfer the proceeds earned from such offering of shares to the Enterprise
Arrangement and Development Fund.
d) Within 30 days from the deadline for payment by
the bidders, the Steering Board shall direct the enterprise to complete the
offering of shares by conducting negotiation with the strategic investors as
prescribed in this Decree. The Steering Board shall transfer the proceeds
earned from such offering of shares to the Enterprise Arrangement and
Development Fund within 05 days from the deadline for payment.
dd) Within 30 days from the deadline for payment by
the bidders, the Steering Board shall direct the enterprise to cooperate with
the auction organization completing the auction for the strategic investors.
The Steering Board shall transfer the proceeds earned from such offering of
shares to the Enterprise Arrangement and Development Fund within 05 days from
the deadline for payment;
e) Where the total proceeds earned from the initial
offering mentioned in Points a, b, c, d or dd Clause 1 of this Article are
lower than the estimated funding for paying benefits to redundant employees and
estimated equitization costs stated in the approved equitization plan, the
equitized enterprise shall retain all of such proceeds to cover expenses under
the approved estimate and make official statements from the day on which the
enterprise obtains the initial certificate of registration of joint-stock
company.
2. Determination of proceeds earned from offering
of shares on the official date of equitization
a) Within 90 days from the issue date of the
initial certificate of registration of joint-stock company, the enterprise
shall determine the amounts payable to the Enterprise Arrangement and
Development Fund according to the financial statements on such date to operate
in the form of the JSC and guidelines for settlement of financial issues on the
official date of equitization stated in Article 21 of this Decree. The amounts
retained at the enterprise include:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- The capital surplus from the issuance of
additional shares shall be used to pay equitization costs and benefits to
redundant employees (which shall be also settled according to the provisions of
Point d this Clause if such capital surplus is not enough to make such
payments); the remaining amount (if any) shall be retained by the JSC at the
rate equivalent to the number of additionally issued shares in the charter
capital structure, where:
Capital surplus
from issuance of additional shares
=
Number of
additional shares
x
Successful bid
-
Starting price
b) Within 05 working days from the day on which the
owner’s representative agency issues a decision on the contents stated in
Clause 4 Article 21 of this Decree, the enterprise shall transfer the increase
in the amounts payable that are determined under Point a Clause 2 this Article
(if any) to the Enterprise Arrangement and Development Fund.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
d) According to the IPO results, if the proceeds
actually earned from offering of discounted shares to employees, labor union,
strategic investors and other investors are not enough to cover relevant
expenses (including equitization costs, benefits paid to redundant employees,
and preferential treatments for employees) according to the final statements
approved by a competent authority, the owner’s representative agency shall
consider reducing the state capital contributed in the JSC (if the JSC still has
the state capital), charter capital and charter capital structure of the JSC to
meet its actual needs through the GMS. If there is no state capital after the
adjustment, the enterprise shall request the owner’s representative agency to
send an official dispatch to request the Ministry of Finance of Vietnam to
extract money from the Enterprise Arrangement and Development Fund to make
refund to the enterprise as prescribed in Point c this Clause.
3. After the time limits mentioned in Clause 1 and
Clause 2 of this Article, if the auctioneer organization and enterprise fail to
transfer money to the Enterprise Arrangement and Development Fund, they shall
pay the interests on late payment according to regulations on management and
use of the Enterprise Arrangement and Development Fund. Such interests shall
not be considered as reasonable expenses when calculating corporate income tax
and shall be covered with profits after tax after deducting compensations paid
by the Board of Members, Board of Directors and relevant groups and individuals
involved in such late payment (if any).
4. The Prime Minister of Vietnam shall promulgate
the regulations on management and use of the Enterprise Arrangement and
Development Fund. The Ministry of Finance of Vietnam shall organize the
management of the Enterprise Arrangement and Development Fund in accordance
with the regulations promulgated by the Prime Minister.
5. The owner’s representative agency shall direct
the Steering Board and the equitized enterprise to submit adequate and timely
reports on management and use of proceeds earned from the equitization to the
Ministry of Finance of Vietnam.
Article 40. Charter of the JSC
1. The Steering Board shall direct the enterprise
to cooperate with the consulting firm in drawing up the charter of JSC which
must be disclosed to investors before offering shares. The draft charter of the
JSC shall not be contrary to the provisions of the Law on Enterprises and
regulations of relevant laws.
2. The charter of the JSC shall be considered to be
ratified by the first GMS if it is approved by at least 65% of the total votes
of attending investors that have contributed capital to the JSC by buying
shares.
Article 41. First General meeting of
shareholders and enterprise registration
1. Within 30 working days from the completion of
the offering of shares, the equitized enterprise shall hold the first GMS to
convert the enterprise into the JSC, and follow procedures for enterprise
registration in accordance with regulations of law.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Chapter V
POLICIES FOR EMPLOYEES UPON EQUITIZATION
Article 42. Offering of shares to employees
1. Discounted shares
a) People eligible to buy discounted shares
include:
- Employees working under employment contracts and
managers of the equitized enterprise on the date of enterprise valuation.
- Employees who are still working at the equitized
enterprise on the date of enterprise valuation, are appointed to act as the
representatives of the equitized enterprise’s stakes in other enterprises and
have not yet purchased preference shares in these enterprises.
- Employees working under employment contracts and
managers of a rank-II enterprise that have not yet purchased preference shares
from other enterprises on the date of enterprise valuation in case of
equitization of an enterprise defined in Point a Clause 2 Article 2 of this
Decree.
b) Each individual mentioned in Point a Clause 1 of
this Article is entitled to purchase up to 100 shares for each year of working
in the state sector with the selling price equal to 60% of the face value of
shares (VND 10.000/share);
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
d) The difference between the selling price of
shares sold to employees and the face value of shares stated in Clause 1 of
this Article shall be deducted from the state capital value when making
statements on the official date of equitization;
dd) The employee is not allowed to transfer the
number of shares that he/she has purchased at a discount as prescribed in this
Clause within 03 years from the date of payment of purchase prices.
e) [46]
Total value of shares sold at a discount to employees calculated at the face
value of shares shall not exceed the owner’s equity on accounting books at the
date of enterprise valuation.
2. From the date of enterprise valuation, an
employee working under employment contract or a manager of the equitized
enterprise who has committed to work for the enterprise for a minimum period of
at least 03 years (from the issue date of initial certificate of registration
of joint-stock company) is entitled to purchase additional shares according to
the following provisions:
a) He/she may purchase up to 200 shares for each of
the next working years as committed provided that total shares purchased shall
not exceed 2.000 shares.
Especially, an employee who is a qualified expert
with a high level of professional knowledge is entitled to purchase up to 500
shares for each of the next working years as committed provided that total
shares purchased shall not exceed 5.000 shares. The equitized enterprise,
depending on characteristics of its business lines, shall develop and decide
criteria for determining qualified experts with a high level of professional
knowledge that must be unanimously agreed upon by the employees’ meeting before
carrying out equitization;
b) The selling price of shares additionally sold to
employees as prescribed in Point a of this Clause shall be the starting price
specified in the equitization plan approved by the owner’s representative
agency;
c) Each employee shall only be entitled to purchase
additional shares according to the specific number of shares prescribed in
Point a this Clause;
d) The share certificates additionally purchased by
an employee as prescribed in Point a Clause 2 of this Article shall be
converted into ordinary shares after the committed working period expires.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
The employee that terminates the employment
contract before the expiration of the committed working period shall resell the
entire number of his/her additionally purchased shares to the JSC at the price
which is determined based on the market price but shall not be lower than the
buying price at which he/she purchased such additional shares.
dd)[47]
The number of shares to be additionally purchased by an employee as prescribed
in Point a Clause 2 of this Article shall be determined according to his/her
maximum working period as committed by his/her retirement age in normal working
conditions laid down in the Labor Code.
3. Employees working at an enterprise that
undergoes restructuring to be converted into the JSC through the DATC as
prescribed in Clause 2 Article 4 of this Decree shall be eligible to the
policies mentioned in Clause 1 and Clause 2 this Article according to specific
conditions of that enterprise and the equitization plan approved by a competent
authority.
4. The employees wishing to purchase shares in
addition to the shares additionally purchased as prescribed in Clause 1 and
Clause 2 of this Article shall subscribe to the public auction of shares as
other investors.
Article 43. Benefits for redundant employees
1. If employees working under the unemployment
contracts or employees working at the equitized enterprise on the date of
enterprise valuation and acting as the representatives of the equitized
enterprise’s stakes in other enterprises are not assigned works at the JSC
under the labour utilization plan, they shall enjoy the same benefits as
redundant employees as prescribed in laws.
2. The owner’s representative agency shall consider
assigning works to the enterprise managers. If all attempts to arrange works of
the owner’s representative agency are failed, these managers shall be provided
with the same downsizing benefits as officials as prescribed in laws.
3. The assignment of works to managers of a rank-II
enterprise as prescribed in Clause 2 Article 2 of this Decree shall be taken
charge by the Board of Members or President of the enterprise. If all attempts
to assign works are failed, these managers shall be provided with benefits as
prescribed in the Labour Code.
Chapter VI
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 44. Conversion of wholly state-owned
single-member LLCs into JSCs
1. The Boards of Members or Presidents of the
state-owned enterprises mentioned in Clause 2 Article 2 shall carry out the
conversion of such rank-II enterprises into JSCs in accordance with provisions
of this Decree.
2. By the date of enterprise valuation, the
redundant assets pending liquidation of a rank-II enterprise, except the assets
prescribed in Clause 3 Article 14 of this Decree shall be recorded as the
enterprise’s business expenses according to their book values, and transferred
to the parent company for managing and conducting liquidation or transfer as
prescribed. The proceeds earned from the liquidation or transfer of assets
shall be recorded as business income of the parent company.
3. Based on the valuation results given by the
employed consulting firm and opinions given by the owner’s representative
agency, the State Audit Office of Vietnam shall audit the enterprise valuation
results and settlement of financial issues before valuation of rank-II
enterprises that have the owner's equity of at least VND 1.800 billion as
recorded in accounting books on the date of enterprise valuation.
4. The proceeds earned from offering of shares of a
rank-II enterprise specified in the final statements approved by a competent
authority that remain after deducting the primary price (book values) of shares
offered, equitization costs, expenses incurred from provision of benefits to
redundant benefits, incentives for employees or tax obligations (if any) shall
be transferred to the Enterprise Arrangement and Development Fund within 5
working days from the day on which a competent authority’s decision is issued.
If the proceeds earned from equitization of the
rank-II enterprise are not enough to pay expenses arising upon equitization of
this enterprise (including equitization costs, expenses incurred from provision
of benefits to redundant benefits, incentives for employees), the parent
company shall provide funding for covering the deficit and record provided
funding as its financial expenses.
Article 45. Rights and responsibilities when
carrying out equitization
1. The Prime Minister shall:
a) Consider giving approval for the list of
enterprises mentioned in Clause 2 and Clause 3 Article 2 of this Decree for
being converted into JSCs;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Appoint owner’s representative agencies of state
capital after equitization carried out in the organizations specified in Point
b Clause 1 this Article, except rank-II enterprises;
d) Consider and settle particular problems or contents
arising in the course of equitization of each enterprise that are not
prescribed in this Decree at the request of the owner’s representative agency.
2. Based on the list of enterprises subject to
compulsory equitization approved by the Prime Minister, each owner’s
representative agency shall:
a) Establish the Steering Board to assist the
owner’s representative agency in carrying out the equitization according to the
provisions of this Decree.
Establish the Steering Board to assist the Prime
Minister in carrying out the equitization of the entities mentioned in Point b
Clause 1 of this Article;
b) Provide guidelines and conduct inspection of the
equitization of the entities under its management in accordance with the
provisions of this Decree;
c) Issue decisions to appoint consulting firms,
appoint auction organizations, disclose the enterprise values, and request the
Prime Minister to consider giving approval for the equitization plans of the
entities mentioned in Point b Clause 1 of this Article;
d) Issue decisions to appoint consulting firms and
auction organizations; decisions to disclose the enterprise values, and
decisions on approval of equitization plans for enterprises under its
management, accompanied with draft charters of JSCs developed in accordance
with provisions of the Law on Enterprises and relevant laws;
dd) Issue decisions on approval of debt trading
plans to serve enterprise restructuring and equitization plans for enterprises
sustaining losses after reaching agreements with the DATC and creditors on debt
trading plans as prescribed in Clause 2 Article 4 of this Decree.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
e) Issue decisions on adjustment of the state
capital in JSCs; decisions to transfer redundant assets (if any) to the DATC
according to the provisions of Clause 4 Article 10 of this Decree;
g) Issue decisions on approval of labor utilization
plans and provision of benefits to redundant employees of the equitized
enterprise;
h) Within the time limit prescribed in Clause 4
Article 21 of this Decree, the owner’s representative agency shall cooperate
with relevant authorities in approving financial statements, statements of
equitization costs, expenses incurred from provision of benefits to redundant
employees, and statements of proceeds earned from equitization, and issuing
decisions to disclose the actual state capital value at the issue date of
initial certificate of registration of joint-stock company (including the
entities prescribed in Point b Clause 1 of this Article);
i) Settle complaints and denunciations concerning
the equitized enterprise within their competence in accordance with regulations
of law;
k) Direct equitized enterprises to follow
procedures for depositing or registration of shares at Vietnam Securities Depository
and registration of trading on SEs as prescribed;
l) Direct equitized enterprises to prepare
documents and transfer rights to represent state capital in JSCs (after
converted from state-owned enterprises) to the State Capital and Investment
Corporation as prescribed;
m) Make decisions on approval for criteria and
selection of strategic investors of enterprises that offer shares to strategic
investors, including enterprises prescribed in Point b Clause 1 of this
Article.
3. The Board of Members or President of a
state-owned enterprise mentioned in Clause 2 Article 2 of this Decree shall:
a) Organize the implementation of the plan for
equitization of rank-II enterprises included in the list of enterprises subject
to compulsory equitization approved by the Prime Minister;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) Issue decisions to appoint consulting firms,
appoint auction organizations, settle financial issues, disclose the enterprise
value, approve equitization plans, labor utilization plans, financial
statements, statements of equitization costs, expenses incurred from provision
of benefits to redundant employees, and statements of proceeds earned from
equitization, and disclose the actual state capital value at the issue date of
initial certificate of registration of joint-stock company in respect of
rank-II enterprises prescribed in this Decree, except the entities prescribed
in Point b Clause 1 of this Article;
d) Provide guidelines and conduct inspection of the
equitization of the entities under its management in accordance with the
provisions of this Decree;
dd) Make decisions on approval for criteria and
selection of strategic investors of rank-II enterprises that offer shares to
strategic investors, except enterprises prescribed in Point b Clause 1 of this
Article.
4. Rights, responsibilities and composition of
Steering Boards:
a) A Steering Board shall have the following rights
and responsibilities:
- Assist the authority issuing the equitization
decision in directing and carrying out equitization for one or some enterprises
as prescribed in this Decree.
- Use the seal of the owner’s representative agency
when performing tasks.
- Establish the Assisting Team to carry out
equitization tasks.
- Based on the approved equitization plan, direct
the enterprise to:
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
+ prepare and submit the equitization schedule
(including time limit for each task) to the owner’s representative agency for
approval. In case of failure to comply with the equitization schedule, the
Steering Board shall be considered to not fulfill its tasks.
- direct to settle financial or personnel issues,
and organize the enterprise valuation according to the provisions of this
Decree.
- request the owner’s representative agency to
decide methods of initial offering.
- direct to develop the equitization plan and the
first draft charter of the JSC.
- direct to develop and submit the labor utilization
plan to the owner’s representative agency (for a state-owned enterprise) or the
Board of Members/President of the state-owned enterprise (for a rank-II
enterprise, except the entities mentioned in Point b Clause 1 this Article) for
approval.
- [48]
review and submit reports to the owner’s representative agency for issuing
decisions to appoint consulting firm, auction organization, disclose the
enterprise value and approve the equitization plan.
- direct the equitized enterprise to cooperate with
auction organizations as prescribed.
- direct the equitized enterprise to determine the
proceeds earned from equitization in accordance with the form of equitization,
make statements (financial statements on the official date of equitization,
statements of equitization costs, expenses incurred from provision of benefits
to redundant employees, incentives for employees and the labor union) in order
to obtain approval from competent authorities.
- submit consolidated report on results of offering
shares to the owner’s representative agency.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- [49]
cooperate with relevant authorities to review and submit reports to the owner’s
representative agency to issue decision to approve financial statements at the
official date of equitization; statements of equitization costs; statements of
expenses incurred from provision of benefits to redundant employees; statements
of proceeds from the equitization and decision to disclose the actual state
capital value at the issue date of the initial certificate of registration of
joint-stock company.
- consider and request the owner’s representative
agency to appoint a representative of state capital at the equitized
enterprise.
- direct the equitized enterprise to promptly and
fully publish the equitization process on the Government’s web portal and send
it to the Ministry of Finance of Vietnam and the the Steering Board for
Enterprise Innovation and Development.
b) [50]
Composition of a Steering Board shall be decided by Minister, head of
ministerial agency or governmental agency, Chairperson of provincial People’s
Committee or Board of members of parent company.
Members of the Steering Board of an entity
mentioned in Point b Clause 1 of this Article shall include representatives of
the Steering Board for Enterprise Innovation and Development and the Ministry
of Finance of Vietnam (if necessary).
5. The labor union of the equitized enterprise
shall cooperate with the Steering Board in:
a) Disseminating and mobilizing officials and
employees of the equitized enterprise to follow equitization policies of the
State;
b) Supervising the equitization process;
c) Appointing a representative of the labor union’s
capital to self-nominate to the Board of Directors or Board of Controller of
the JSC in accordance with regulations of law;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 46. Reporting
Ministers, heads of ministerial agencies, heads of
Governmental agencies, Chairpersons of provincial People’s Committees, Boards
of Members/Presidents of parent companies shall promptly submit reports to the
Steering Board for Enterprise Innovation and Development and the Ministry of
Finance of Vietnam on relevant contents in the course of equitization,
including: settlement of financial issues, enterprise valuation results,
decision to disclose the enterprise value and adjustment thereof, equitization plan, share offering results, statements on
equitization costs, statements serving conversion into JSCs, and violations
committed by consulting firms in the equitization process (if any), and direct equitized
enterprises to promptly and fully publish the contents prescribed in Clause 1
Article 11 of this Decree.
Article 47. Equitization order [51]
The equitization shall be carried out according to
the order of work steps in Appendix I enclosed with the Government's Decree No.
140/2020/ND-CP dated November 30, 2020.
Chapter VII
IMPLEMENTATION
Article 48. Transition
1. [52]
Enterprises whose value has been disclosed before January 01, 2018 but that do
not yet obtain approved equitization plans shall adjust book values according
to their disclosed values (unless such adjustment is not allowed according to a
decision issued by a competent authority), formulate and submit their
equitization plans to competent authorities in accordance with the provisions
of this Decree. The enterprise mentioned in Clause 1 Article 26 of this Decree
shall carry out state audit and re-adjust the published enterprise value if
there is any difference arising.
2. The enterprise whose decision on approval of
equitization plan has been approved by a competent authority before the
effective date of this Decree shall continue to implement such plan. Settlement
of financial issues and statement of proceeds earned from equitization on the
issue date of initial certificate of registration of joint-stock company shall
comply with provisions of this Decree.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
4. The enterprise whose plan for offering of shares
to strategic investors has been approved by a competent authority before the
effective date of this Decree shall continue to implement such plan. With
regard to unsold shares (difference between the number of shares actually
offered to strategic investors and the total number of shares expected to offer
thereto under the approved equitization plan), the owner’s representative
agency shall issue a decision to adjust the charter capital and charter capital
structure before the first GMS is held to continue transferring capital in
accordance with regulations of law on transfer of state capital in JSCs.
5. [54]
The equitized enterprises that have been operating in the form of joint-stock
companies before the effective date of Decree No. 126/2017/ND-CP (i.e. January
01, 2018) are not subject to the provisions of this Decree.
Before June 30, 2021, pursuant to regulations of
law in force at the issue date of initial certificate of registration of
joint-stock company, owner’s representative agencies shall take charge and
cooperate with relevant agencies to settle financial issues to serve the
issuance of decisions to approve financial statements of these enterprises when
they officially operate as JSCs, statements of equitization costs, statements
of expenses incurred from provision of benefits to redundant employees, statements
of proceeds earned from equitization, and decisions to disclose actual values
of state capital at the time they are issued with initial certificates of
registration of joint-stock company, and direct the transfer of such amounts to
JSCs.
Over the abovementioned deadline, owner’s
representative agencies shall assume responsibility before the Government for
their failure to complete statements and transfer to JSCs; such violation shall
be taken into account when carrying out performance assessment and ranking of
officials in accordance with regulations of the Law on Officials.
6. The enterprises mentioned in Clause 1 and Clause
2 of this Article whose land use plans have not been approved by competent
authorities according to the Government’s Decree No. 01/2007/ND-CP dated
January 06, 2017 shall be required to obtain approval for their land use plans
before the day on which the JSC obtains the initial certificate of registration
of joint-stock company.
The owner’s representative agency shall cooperate
with the provincial People’s Committee (of province or city where the
enterprise’s land area is located) in directing the enterprise and relevant
competent authorities to consider approving the land use plan as prescribed.
7. The unused amounts of enterprise arrangement
funds of parent companies as at December 31, 2017 (including receivables and
unused amounts in cash) shall be transferred to the Enterprise Arrangement and
Development Fund. The parent company whose additional charter capital has been
provided by the enterprise arrangement fund with approval given by a competent
authority before the effective date of this Decree shall be entitled to add the
charter capital in accordance with the approved plan.
8. [55]
With regard to an enterprise which has been equitized before January 01, 2018
and has calculated and included the value of goodwill in the enterprise value,
the JSC shall continue allocating the value of goodwill to its expenses when
calculating corporate income tax within a maximum period of 03 years from the
effective date of the Government’s Decree No. 140/2020/ND-CP dated November 30,
2020.
9. [56]
When the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020 comes
into force, enterprises that have land use plans upon equitization approved by
competent authorities shall continue implementing equitization procedures and
approved land use plans upon equitization.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
Article 49. Implementation
1. This Decree comes into force from January 01,
2018 and replaces the Government’s Decree No. 59/2011/ND-CP dated July 18,
2011, the Government’s Decree No. 189/2013/ND-CP dated November 20, 2013 and
the Government’s Decree No. 116/2015/ND-CP dated November 11, 2015. Any
regulations on equitization that are contrary to the provisions of this Decree
shall cease to have effect.
2. [58]
Single-member LLCs 100% of charter capital of which is held by political
organizations, socio-economic organizations, socio-political organizations or
public service providers and which have been duly established and operating in
accordance with the Law on Enterprises may be converted into JSCs in accordance
with the provisions of this Decree.
Article 50. Implementation responsibility and
organization
1. The Ministry of Finance of Vietnam, the Ministry
of Labor - War Invalids and Social Affairs of Vietnam, the Ministry of Natural
Resources and Environment of Vietnam, the Ministry of Planning and Investment
of Vietnam, the State Bank of Vietnam, Vietnam Social Security, the State Audit
Office of Vietnam and relevant authorities shall provide guidelines on
implementation of this Decree within their competence.
2. Ministers, heads of ministerial agencies, heads
of governmental agencies, Chairpersons of provincial People’s Committees,
Boards of Members of economic groups or corporations established according to
the Prime Minister’s decision are responsible for the implementation of this
Decree./.
CERTIFIED BY
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
APPENDIX I
PROCEDURES FOR
SELECTION OF STRATEGIC INVESTORS OF AN EQUITIZED ENTERPRISE
(Enclosed with the Government’s Decree No. 126/2017/ND-CP dated November 16,
2017)
Procedures for selection of strategic investors of
an equitized enterprise include the following steps:
Step 1. Based on the scale of charter
capital, nature of business lines and enterprise development needs, the
Steering Board shall direct the Assisting Team to cooperate with the enterprise
and consulting firm (if any) in developing selection criteria, percentage of
shares offered and objectives of offering of shares to strategic investors
which shall be then included in the equitization plan.
If the equitized enterprise is engaging in
conditional business lines according to regulations of law on investment,
selection of strategic investors that engage in the same business lines with
the enterprise should be taken into account when developing such selection
criteria.
Step 2. The Steering Board shall appraise
the plan for offering of shares to strategic investors, and submit it to the
owner’s representative agency to give approval under the equitization plan
(specifying selection criteria, percentage and selling price of shares offered
to strategic investors).
Step 3. Within 05 working days from the day
on which the owner’s representative agency gives approval for the equitization
plan, the equitized enterprise shall publish on the mass media (both in English
and Vietnamese) the following contents related to the offering of shares to
strategic investors of the equitized enterprise, including:
- Particulars of the enterprise;
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Criteria for selecting strategic investors;
- Percentage of shares offered to strategic
investors;
- Rights and obligations of a strategic investor of
the equitized enterprise (as prescribed in Article 6 of this Decree);
- Application for the strategic investor status;
- Application submission deadline and location.
Step 4. Within 20 days from the day on which
the information is published, the equitized enterprise shall examine received
applications for the strategic investor status, and compile and send the list
of strategic investors eligible to purchase shares to the Steering Board for
requesting the owner’s representative agency to issue approval decision. The
equitized enterprise shall inform strategic investors so that they make plans
for learning about contents related to business operations, and financial
status, etc. of the equitized enterprise.
Selection of strategic investors eligible to
purchase shares shall be completed before the public auction is held.
Step 5. Based on the list of strategic
investors approved by the owner’s representative agency, the Steering Board
shall develop the plan for offering of shares to strategic investors and
organize the implementation thereof in accordance with the provisions of Clause
3 Article 6 of this Decree.
Step 6. Based on results of offering of
shares to strategic investors, the equitized enterprise shall submit
consolidated reports to the owner’s representative agency to consider
concluding official agreements with strategic investors that have won the bid
and transfer proceeds earned from offering of shares to strategic investors to
the Enterprise Arrangement and Development Fund as prescribed in Article 39 of
this Decree./.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
APPENDIX I[59]
PROCEDURES
FOR CONVERSION OF A WHOLLY STATE-OWNED ENTERPRISE INTO A JOINT-STOCK COMPANY
(Enclosed with the Government’s Decree No. 140/2020/ND-CP dated November 30,
2020)
Procedures for conversion of a
wholly state-owned enterprise into a joint-stock company include the following
steps:
Step 1. Developing the
equitization plan
1. Establishment of the Steering
Board and Assisting Team.
a) Based on the equitization plan
on the list of state-owned enterprises subject to re-arrangement approved by
the Prime Minister, the owner’s representative agency issues an equitization
decision and decision to establish the Steering Board, enclosed with the
plan/roadmap for equitization.
b) The head of the Steering Board
shall select and make a decision on establishment of the Assisting Team within
05 working days from the day on which the decision on establishment of the
Steering Board is given.
c) After the owner’s
representative agency issues an equitization decision, the Steering Board and
the Assisting Team shall cooperate with the equitized enterprise and consulting
firm (if any) to decide to follow procedures for contacting and exchanging
information with investors about the enterprise’s business and financial status
and demands for selection of strategic investors, etc. which are used to serve
their decisions to make investments in the enterprise.
2. Preparation of documents.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Legal documents on establishment
of the enterprise.
- Legal documents on assets,
sources of capital and debts of the enterprise.
- Financial statements and tax
finalizations of the enterprise on the date of enterprise valuation.
- Estimate of equitization costs.
- The land use plan upon
equitization at the date of enterprise valuation.
- List of employees and labor
utilization plan.
- Selected methods, forms and
date of enterprise valuation satisfying requirements for the enterprise and
relevant guiding documents on equitization.
3. The Steering Board shall direct
the Assisting Team to cooperate with the enterprise in preparing and submitting
relevant documents to the owner’s representative agency for approval of
estimate of equitization costs and decision on appointment of consulting firm.
4. Stocktaking, settlement of
financial issues and enterprise valuation.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) Carrying out stocktaking,
classifying assets and making financial statements or tax finalizations, and
cooperating with relevant authorities in settlement of financial issues by the
date of enterprise valuation.
b) Formulating the land use plan
upon equitization and requesting the owner’s representative agency to send that
plan and all relevant documents to the Provincial People's Committee for
getting its opinions about the land use plan upon equitization and specific
land price as the basis for enterprise valuation.
c) conducting the enterprise
valuation.
The Steering Board shall direct
the Assisting Team to cooperate with the enterprise and consulting firm in
conducting the enterprise valuation as prescribed. A consulting firm may be
hired to provide all services, including formulation of the equitization plan,
determination of the enterprise value and offering of shares.
5. Issuance of decision and
disclosure of the enterprise value.
The Steering Board shall review
the results of asset stocktaking and classification, and enterprise valuation,
and submit a report on review results to the owner’s representative agency for
issuing a decision to disclose the enterprise value.
With regard to enterprises subject
to the audit prescribed in Clause 1 Article 26 of the Government’s Decree No.
126/2017/ND-CP dated November 16, 2017, the Steering Board shall request the
owner’s representative agency deciding the enterprise value to send a written
request and relevant documents to the State Audit Office of Vietnam for audit
of valuation results and settlement of financial issues before the official
disclosure of the equitized enterprise’s value.
The decision to disclose the
enterprise value must specify debts and assets which have been excluded from
the enterprise valuation and shall be transferred to the DATC according to Clause
2 Article 14, Clause 2 and Clause 3 Article 15 of the Government’s Decree No.
126/2017/ND-CP dated November 16, 2017 and Clause 9 Article 1 of this Decree.
6. Completion and submission of
the equitization plan to a competent authority for approval.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
- Actual situation of the
enterprise on the date of enterprise valuation.
- The enterprise valuation results and issues need to be settled.
- Form of equitization and charter
capital necessary to serve business operations of the JSC.
- Structure of charter capital,
starting price and share offering methods.
- Draft charter on organization
and operation of the JSC formulated according to regulations of the Law on
Enterprises and other legislative documents in force.
- Plan for rearrangement of
employees approved by the owner’s representative agency.
- The business plan for the next 3
– 5 years.
- The land use plan upon
equitization which has been approved by a competent authority.
b) The Steering Board shall direct
the Assisting Team and the enterprise to cooperate with the consulting firm in
publishing and sending the equitization plan to each division of the enterprise
for reference before an (extraordinary) employees’ meeting is held.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
c) The Steering Board shall review
the equitization plan and submit a report on review results to the owner’s
representative agency for giving approval of the equitization plan.
If the actual value of an
enterprise is lower than its amounts payable prescribed in Clause 2 Article 4
of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017, as
amended in Clause 2 Article 1 of this Decree, the owner’s representative agency
shall direct the Steering Board and the enterprise to cooperate with the DATC
and the enterprise’s creditors in formulating a feasible and efficient debt
trading plan to serve the enterprise restructuring. Based on the efficiency and
feasibility of the debt trading plan, the owner’s representative agency shall
issue a decision on approval of the debt trading plan for enterprise restructuring
or decide to adopt another conversion form as prescribed by law.
Step 2. Implementation of
equitization plan
1. The Steering Board shall direct
the enterprise to cooperate with intermediate consulting firms in organizing
offering of shares according to the approved equitization plan approved and
provisions of this Decree.
2. The Steering Board shall direct
the enterprise to sell discounted shares to its employees and the labor union
(if any) according to the approved plan.
3. Based on results of offering of
shares to the entities specified in the equitization plan, the Steering Board
shall direct the enterprise to transfer the proceeds earned from equitization
to the Fund as prescribed.
If shares are not yet sold up to
the entities specified in the approved equitization plan, the Steering Board
shall report it to the owner’s representative agency for adjusting the scale
and structure of shares of the equitized enterprise.
4. The Steering Board shall
request the owner’s representative agency to appoint a representative of the
capital of the equitized enterprise having state capital to continue engaging
in the JSC and take responsibility to perform rights and obligations of the
representative of state capital’s owner as prescribed in laws.
Step 3. Completing equitization
process
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
a) The Steering Board shall direct
the Assisting Team, the representative of state capital (if any) and the
enterprise to hold the first GMS for ratifying the charter on organization and
operation and business plan, voting for members of the Board of Directors,
Board of Controllers and executive structure of the JSC.
b) The Board of Directors of the
JSC shall apply for enterprise registration in accordance with results of the
first GMS.
2. Making statements and transfer
between the enterprise and the JSC.
a) Within 90 days from the issue
date of the initial certificate of registration of joint-stock company, the
Steering Board shall direct the Assisting Team and the enterprise to prepare
financial statements as at the day on which the JSC obtains the initial
certificate of registration of joint-stock company, make tax statements, audit
financial statements, make statements on equitization costs, and submit reports
on such contents to the owner’s representative agency.
b) Based on the state capital
value determined on the date of enterprise registration by the owner’s
representative agency, the Steering Board shall direct the Assisting Team and
the enterprise to carry out transfer between the enterprise and the JSC.
c) Information about the JSC shall
be launched and published on mass media as prescribed.
The authority issuing the equitization
decision, Steering Board, Assisting Team and the enterprise may perform
multiple steps at the same time in order to accelerate the progress of
enterprise equitization./.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
“The Law on Government Organization dated
June 19, 2015; the Law on Amendments to the Law on Government Organization and
the Law on Local Government Organization dated November 22, 2019;
The Law on management and use of state capital
invested in manufacturing and business operations of enterprises dated November
26, 2014;
The Law on Enterprises dated November 26, 2014;
The Law on Investment dated November 26, 2014;
The Law on Public Investment dated June 13,
2019;
The Law on Securities dated June 29, 2006; the
Law on Amendments to the Law on Securities dated November 24, 2010;
The Law on Land dated November 29, 2013;
And at the request of the Minister of Finance of
Vietnam;”
[2]
This Clause is amended according to Clause 1 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
[4]
This Clause is amended according to Point b Clause 2 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[5]
This content is amended according to Point a Clause 3 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[6]
This Point is amended according to Point b Clause 3 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[7]
Clause 2 Article 37 is changed into Clause 4 Article 37 and is amended
according to Clause 19 Article 1 of the Decree No. 140/2020/ND-CP, coming into
force from November 30, 2020.
[8]
Clause 2 Article 37 is changed into Clause 4 Article 37 and is amended
according to Clause 19 Article 1 of the Decree No. 140/2020/ND-CP, coming into
force from November 30, 2020.
[9]
Clause 2 Article 37 is changed into Clause 4 Article 37 and is amended
according to Clause 19 Article 1 of the Decree No. 140/2020/ND-CP, coming into
force from November 30, 2020.
[10]
This Clause is added according to Clause 4 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[11]
This Clause is amended according to Clause 5 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[12]
This Clause is abrogated according to Clause 1 Article 3 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
[14]
This Clause is amended according to Point b Clause 6 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[15]
This Point is amended according to Point c Clause 6 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[16]
This content is abrogated according to Point a Clause 2 Article 3 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[17]
This Point is abrogated according to Point b Clause 2 Article 3 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[18]
This Point is abrogated according to Point c Clause 2 Article 3 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[19]
This Clause is abrogated according to Clause 3 Article 3 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[20]
This content is added according to Clause 7 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[21]
This Clause is amended according to Clause 8 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[22]
This content is added according to Point a Clause 9 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
[24]
This content is added according to Point c Clause 9 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[25]
This Clause is amended according to Clause 10 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[26]
This Clause is abrogated according to Clause 4 Article 3 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[27]
This Point is abrogated according to Clause 5 Article 3 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[28]
This Clause is amended according to Clause 11 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[29]
This Clause is amended according to Clause 12 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[30]
This Clause is amended according to Point a Clause 13 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[31]
This Clause is amended according to Point b Clause 13 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[32]
This Clause is amended according to Point c Clause 13 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
[34]
This paragraph is amended according to Point a Clause 16 Article 1 of the
Decree No. 140/2020/ND-CP, coming into force from November 30, 2020.
[35]
This Clause is amended according to Point b Clause 16 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[36]
This Clause is abrogated according to Clause 6 Article 3 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[37]
This Article is added according to Clause 15 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[38]
This content is abrogated according to Clause 7 Article 3 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[39]
This content is added according to Clause 17 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[40]
This Clause is amended according to Clause 18 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[41]
Clause 2 and Clause 4 Article 37 are changed into Clause 4 and Clause 6 Article
37 and are amended according to Clause 19 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[42]
This Article is amended according to Clause 19 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
[44]
This Point is amended according to Clause 20 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[45]
Clause 4 Article 37 is changed into Clause 6 Article 37 and is amended
according to Clause 19 Article 1 of the Decree No. 140/2020/ND-CP, coming into
force from November 30, 2020.
[46]
This Point is added according to Point a Clause 21 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[47]
This Point is added according to Point b Clause 21 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[48]
This en dash is amended according to Point a Clause 22 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[49]
This en dash is amended according to Point a Clause 22 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[50]
This Point is amended according to Point b Clause 22 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[51]
This Article is amended according to Clause 23 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[52]
This Clause is amended according to Point a Clause 24 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
...
...
...
Please sign up or sign in to your
TVPL Pro Membership to see English documents.
[54]
This Clause is amended according to Point c Clause 24 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[55]
This Clause is added according to Point d Clause 24 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[56]
This Clause is added according to Point dd Clause 24 Article 1 of the Decree
No. 140/2020/ND-CP, coming into force from November 30, 2020.
[57]
This Clause is added according to Point e Clause 24 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[58]
This Clause is amended according to Clause 25 Article 1 of the Decree No.
140/2020/ND-CP, coming into force from November 30, 2020.
[59]
This Appendix replaces Appendix II enclosed with the Decree No. 126/2017/ND-CP
as prescribed in Clause 26 Article 1 of the Decree No. 140/2020/ND-CP, coming
into force from November 30, 2020.