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THE
GOVERNMENT
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No.
28-CP
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Hanoi,
May 07, 1996
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DECREE
ON THE TRANSFORMATION OF A NUMBER OF STATE ENTERPRISES INTO
JOINT-STOCK COMPANIES
THE GOVERNMENT
Pursuant to the Law on Organization of the
Government of September 30, 1992;
Pursuant to the Law on State Enterprises of April 20, 1995;
At the proposals of the Minister-Chairman of the Central Steering Committee for
Renewal of Enterprises, and the Minister of Finance,
DECREES:
Chapter I
GENERAL PROVISIONS
Article 1.- The
transformation of a number of State enterprises into joint-stock companies
(equitization for short) aims at the following objectives:
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2. To create conditions for the capital
contributors and the employees and officials in the enterprises to have shares,
raise their role as real masters and give a new impetus to enhance the
enterprises’ business
efficiency
Article 2.- This Decree
shall be applicable to the enterprises defined in Article 1 of the Law on State
Enterprises in which the State does not need to own 100% of the investment
capital.
Article 3.- All economic
organizations with legal person status, social organizations recognized by law
and Vietnamese citizens aged 18 or more are entitled to buy shares from the
equitized enterprises.
The experimental sale of shares to foreign
organizations and individuals shall be done in accordance with specific
regulations of the Prime Minister.
Article 4.- The
ownership right and all legitimate interests of the individuals and organizations
that buy shares from the equitized enterprises shall be protected by the State
in accordance with current laws.
Article 5.- Shares shall
be sold openly at the equitized enterprises or through the system of appointed
Commercial Banks and Financial Companies. The sales of shares shall be used
only for investment in the development of State enterprises.
Article 6.- The Ministry
of Finance shall exert unified management over the issue of shares at the
equitized enterprises.
Chapter II
PRINCIPLES FOR DETERMINING
THE VALUE OF ENTERPRISES, CONDITIONS AND FORMS OF EQUITIZATION
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1. Having a small and medium size (except for
the enterprises to be equitized in the forms defined in Point 1, Article 9 of
this Decree);
2. Not belonging to the enterprises in which the
State needs to own 100% of the investment capital;
3. Having an effective business plan.
Article 8.- Principles
for determining the value of an enterprise:
1. The value of an enterprise at the time of
equitization is the actual value of the enterprise acceptable to both the
seller and the buyer of the shares.
2. Bases for determining the actual value of the
enterprise:
a) Statistics in the books of accounts of the
enterprise at the time of equitization which have been verified by a lawful
audit agency.
b) The advantage coefficients of the enterprise
in terms of its geographical location, product prestige and practical business
efficiency reflected through the ratio of profit against the average operative
capital over the last three years before the enterprise is equitized.
c) The value of the land-use right calculated
according to the Land Law and the documents guiding its implementation.
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1. Keeping intact the existing value of the
enterprise and issuing shares as stipulated to attract more capital for the
development of the enterprise.
2. Selling part of the existing value of the
enterprise.
3. Detaching from the enterprise a component
which meets the conditions for equitization.
Chapter III
PREFERENTIAL TREATMENT
TO THE EQUITIZED ENTERPRISE AND ITS EMPLOYEES AND OFFICIALS
Article 10.- The
equitized enterprise shall enjoy the following preferential treatment:
1. To be entitled to a 50% reduction of the
profit tax in two consecutive years from the time it changes its operations in
accordance with the Corporate Law.
If the equitized enterprise satisfies the
conditions defined in Article 15 of Decree No.29-CP of May 12, 1995 of the
Government on detailed stipulations for the implementation of the Law on
Promotion of Domestic Investment, it is entitled only to the tax preferential
levels specified in Articles 16, 17, 18, 19, 20, 21 and 22 of that Decree.
2. To be exempt from the registration fee on the
transfer of assets under the management and use of the equitized State
enterprise to the ownership of the joint-stock company.
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4. To be entitled to continue the export and
import of goods according to the State prescriptions.
5. Before equitization, it is allowed to
distribute at its discretion the residue in the reward and welfare funds (in
cash) to its working employees and officials for share-buying.
To be entitled to maintain and develop the
welfare fund in kind, the cultural constructions, clubs, clinics and sanitoria
in order to ensure the welfare of the laborers in the joint-stock company.
These assets shall belong to the labor collective in the joint-stock company
and be placed under the management of the trade union in the company.
6. The actual reasonable and necessary
expenditures for transforming the State enterprise into the joint-stock company
shall be accounted for in the value of the enterprise as stipulated by the
Ministry of Finance.
Article 11.- The
laborers in the equitized enterprise shall be entitled to enjoy the following
preferential treatment:
1. Financial preferential treatment:
a) To be provided by the State with a number of
shares, depending on the seniority and work performance of each person. The
laborers shall enjoy the dividends of these shares which can be inherited by
their children who also work at the joint-stock company but these shares are
not transferable. These shares shall belong to the State ownership in the
joint-stock company.
The value of the shares issued to each person
shall not exceed six months’ salaries and wages based on grades and positions
on wage scale issued by the State; the total shares issued shall not exceed 10
% of the value of the enterprise.
b) To be entitled to buy a number of shares with
deferred payment in 5 years at the interest rate of 4% per annum; the total
shares bought with deferred payment shall not exceed 15% of the value of the
enterprise, or 20% of the value of the enterprise if its self-procured capital
represents 40% or more of its value.
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Chapter IV
ORGANIZATION OF
IMPLEMENTATION
Article 12.- Basing themselves
on the conditions defined in Article 7 of this Decree, the Ministers, the Heads
of the ministerial-level agencies, the Heads of the agencies attached to the
Government (Ministers for short), the Presidents of the Peoples Committees of
the provinces and the cities directly under the Central Government shall, in
consultation with the Party Steering Commission or the provincial/municipal
Party Committee, decide the list of State enterprises to be equitized from now
till the end of 1997 and send it to the Central Steering Committee for
Equitization, the Ministry of Finance, the Ministry of Planning and Investment
for monitoring.
The Managing Boards of the State Corporations
established under the Prime Minister’s decision shall, after consulting the Party
Steering Commission (if any) or the Party Committees in the Corporations, draw
up the list of enterprises to be equitized and report it to the Prime Minister
for approval and, at the same time, send it to the Ministry of Finance, the
Ministry of Planning and Investment for monitoring.
Article 13.- Within 30
days after receiving the full dossier requesting the appraisal of the value of
an enterprise, the Ministry of Finance (the system of the General Departments
for Management of State Capital and Property in Enterprises) shall examine and
decide the value of the enterprise after getting the written agreement of the
concerned Ministry in charge of the branch, or the province and city directly
under the Central Government.
Upon receiving the decision to transform the
State enterprise into a joint-stock company, the enterprise shall organize the
issue of shares and ensure that the shareholders receive their shares within 30
days at the latest after the end of the issue time limit.
Article 14.- Competence
to carry out the equitization:
1. With regard to the enterprises with State
capital (including budgetary allocations, budget-derived capital and the
self-procured capital) of more than 3 billion VND, the Ministers, the
Presidents of the Peoples
Committees of the provinces and cities directly under the Central Government
shall elaborate the equitization plan before sending it to the Central Steering
Committee for Equitization which shall submit it to the Prime Minister for
approval and permission for its implementation according to Article 19 of this
Decree.
2. With regard to the enterprises with State
capital of 3 billion VND or less, the Ministers, the Presidents of the People’s
Committees of the provinces and cities directly under the Central Government
shall organize the equitization according to this Decree, provide guidance and
supervise the implementation by the concerned Ministries. The documents
relating to equitization issued by the Ministries, the provinces and cities
directly under the Central Government must be sent to the Central Steering
Committee for Equitization and the Ministry of Finance for monitoring.
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Article 15.- The
decision of a competent State agency to transform a State enterprise into a
joint-stock company as stipulated in Article 14 of this Decree shall replace
the license to establish the joint-stock company stated in Article 16 of the
Corporate Law.
Article 16.-
Registration of business of a joint-stock company:
1. The equitized State enterprise shall operate
in accordance with the Corporate Law and must register its lines of business
with the Planning and Investment Service of the province or city directly under
the Central Government, where the enterprise has its head office.
2. Within 15 days after receiving the full
dossier on business registration, the Planning and Investment Service shall
issue the certificate of business registration to the joint-stock company.
3. The dossier on business registration
comprises:
a) The decision of the competent level to
transform the State enterprise into a joint-stock company;
b) The Statute on the organization and operation
of the joint-stock company already adopted by the congress of shareholders;
c) The minutes on the election of the Managing
Board and the appointment of the executive Director;
d) The lawful certificate of the right to use
the main office of the enterprise.
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1. To transform the whole of an independent
enterprise into a joint-stock company:
The General Director of the General Department
for Management of State Capital and Property in Enterprises shall appoint a
person to directly manage the State capital in the joint-stock company after
consulting the concerned Minister in charge of the branch, or the President of
the Peoples Committee of the
concerned province or city directly under the Central Government.
2. To transform a component of an independent
State enterprise (State corporation, independent enterprise with or without
Managing Board) into a joint-stock company:
The Managing Board of the State enterprise which
has a Managing Board or the Director of the State enterprise which has no
Managing Board shall appoint a person to directly manage the State capital at
the joint-stock company established through the equitization of a component of
its parent enterprise.
3. The person directly managing the State
capital in the joint-stock company shall perform his/her powers and duties
according to Articles 50 and 54 of the Law on State Enterprises.
4. The profit earned from the State capital in
the above-said joint-stock company shall belong to the State and be used only
for investment in the development of the State enterprise and shall be remitted
to:
a) The State budget in the case defined in Item
1, Article 17 of this Decree.
b) The enterprise which manages the State
capital in the joint-stock company in the case defined in Item 2, Article 17 of
this Decree.
Article 18.- To
establish the Central Steering Committee for Equitization with the
Minister-Chairman of the Central Steering Committee for Renewal of Enterprises
as its Chairman, a Vice-Minister of Finance as its Standing Vice Chairman, a
Vice Minister of Labor, War Invalids and Social Affairs and a Vice-President of
the Vietnam General Confederation of Labor as its member. The Equitization
Commission of the General Department for Management of State capital and
Property at Enterprises shall act as standing organ. The Central Steering
Committee for Equitization shall have the power to request the concerned
Ministries (when necessary) to designate a number of their specialists as
members of this standing organ.
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Chapter V
IMPLEMENTATION PROVISIONS
Article 20.- This
Decree takes effect from the date of its signing. The previous provisions on
equitization contrary to this Decree are now annulled.
Article 21.- The
Minister of Finance, the Minister of Labor, War Invalids and Social Affairs,
the other Ministers and the heads of the concerned branches shall provide
guidance on the implementation of this Decree.
Article 22.- The
Ministers, the Heads of the ministerial-level agencies, the Heads of the
agencies attached to the Government, the Presidents of the People’s Committees
of the provinces and cities directly under the Central Government, the Managing
Boards of the State Corporations established under the Prime Minister’s
decision shall have to implement this Decree.
ON BEHALF OF
THE GOVERNMENT
FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER
Phan Van Khai