Quyết định 2592/QD-BTC

DECISION

ISSUING PROCEDURES FOR CONDUCTING EQUITIZATION OF STATE OWNED ENTERPRISES IN ASSOCIATION WITH LISTING OR REGISTRATION FOR SHARE TRADING AT A SECURITIES TRADING CENTRE

THE MINISTER OF FINANCE

Pursuant to Decree No. 77/2003/ND-CP of the Government dated 1 July 2003 on the functions, duties, powers and organizational structure of the Ministry of Finance;
Pursuant to Decree No. 187/2004/ND-CP of the Government dated 16 November 2004 on conversion of State owned companies into shareholding companies;
Pursuant to Decree No. 144/2003/ND-CP of the Government dated 28 November 2003 on securities and securities market;
Pursuant to Decision No. 155/2004/QD-TTg of the Prime Minister of the Government dated 24 August 2004 on the criteria for and list classifying State owned companies and independently cost accounting member companies of State owned corporations;
Pursuant to Decision No. 528/2005/QD-TTg of the Prime Minister of the Government dated 14 June 2005 on approval of the list of equitized companies to auction their shares and to list or register for trading at Securities Trading Centres in Vietnam;
On the proposal of the Chairman of the State Securities Commission and the Director of the Department of Enterprise Finance:

DECIDES:

Article 1. To issue with this Decision:

1. Procedures for combining equitization of State owned enterprises with listing or registration for share trading at a Securities Trading Centre;

2. Procedures for combining the sale of State held shares in equitized enterprises with listing or registration for share trading at a Securities Trading Centre.

Article 2. This Decision shall be of full force and effect as from the date of signing.

Article 3. Ministers, heads of ministerial equivalent bodies, heads of Government bodies, chairmen of peoples committees of provinces and cities under central authority, chairmen of boards of management and general directors (directors) of equitized enterprises and other organizations and individuals concerned shall be responsible for implementation of this Decision.

PROCEDURES

FOR EQUITIZATION OF STATE OWNED ENTERPRISES IN ASSOCIATION WITH LISTING OR REGISTRATION FOR SHARE TRADING AT A SECURITIES TRADING CENTRE
(Issued with Decision No. 2592 of the Ministry of Finance dated 24 August 2005)

Step 1:

Issuance of a decision on equitization of a State owned enterprise (SOE) in association with listing and registration for trading at a Securities Trading Centre (SCT):

The body authorized to make the decision on equitization shall choose an enterprise to be equitized which satisfies all the conditions for listing at the STC (Ho Chi Minh City) or which satisfies all the conditions for trading at the STC (Hanoi) and shall issue a decision for such enterprise to undergo equitization specifying that equitization shall be conducted in association with listing at the SCT (Ho Chi Minh City) or with registration for share trading at the STC (Hanoi).

Step 2:

Preparation of a data file and organization of a valuation of the enterprise:

- In the case of equitization of a SOE in association with listing and the enterprise uses a consultancy organization during the process of conversion, the consultancy contract must specify that the consultancy organization will assist the enterprise to formulate an application file for listing. In the case a SOE which does not use a consultancy organization during conversion, it must sign a contract for consultancy regarding the application for permission for listing shares with a securities company pursuant to clause 2.5 of Circular No. 59/2004/TT-BTC of the Ministry of Finance dated 18 June 2004 providing guidelines on listing shares and bonds on the centralized securities market.

- After there is a decision on valuation of the enterprise by the competent body, the enterprise making the application for permission for listing shall formulate a file for listing pursuant to the provisions in Circular 59 referred to above; and an enterprise registering for trading at the STC (Hanoi) shall formulate a file in accordance with the provisions in Decision No. 244-QD-BTC of the Ministry of Finance dated 20 January 2005 promulgating Provisional Regulations on Organization of Securities Trading at the STC (Hanoi). The above- mentioned enterprises must also prepare a prospectus and at the same time a plan on organization of a system of disclosure of information aimed at discharging the obligation of any company which is lists and/or registers for trading to make regular disclosures of information.

- A company making application for permission for listing shall also draft a charter on organization of operations of the share holding company in the sample form issued with Decision No. 07/2002/QD-VPVP of the Government Office dated 19 November 2002.

Step 3:

Formulation of a plan for and implementation of equitization:

- In the case of companies which will list immediately after they are equitized, the plan for equitization of the SOE shall include the proposed ratio of shares which will be sold to the public consistent with the criteria for listing (the company must have at least fifty (50) external shareholders who hold above twenty (20) per cent of the freely convertible shares of the company; and in the case of a company with capital of 100 billion dong or more, this ratio is fifteen (15) per cent). A company which will trade at the STC (Hanoi) shall be required to have at least fifty (50) shareholders currently holding shares.

- The company applying for permission for listing shall send to the Ministry of Finance (State Securities Commission) its application file for permission for listing containing the following documents: the decision from the competent authority on equitization in association with listing; a prospectus; audited financial statements for the year immediately preceding the year of equitization or the decision on valuation of the enterprise from the competent authority (if an auditing organization participated in the valuation of the enterprise); and the contract on consultancy services for listing. Any documents missing from this file may be supplemented immediately after the completion of equitization.

- A company registering for trading at the STC (Hanoi) shall forward a file for permission for registration for trading to the STC (Hanoi), containing the following documents: decision on equitization in association with trading at the STC from the competent authority; a prospectus; and audited financial statements for the year immediately preceding the year of equitization or the decision on valuation of the enterprise from the competent authority (if an auditing organization participated in the valuation of the enterprise).

- Enterprises which are dependently accounting members of a corporation, and which apply for registration for trading at the STC (Hanoi) in association with equtization shall be exempt from the condition requiring that business or production operations for the year immediately preceding the year of registration for trading must be profitable.

- Prior to implementing the plan on sale of shares, an enterprise must disclose information on the mass media and at stipulated locations, such information to include the prospectus, the plan on issuance of shares and other relevant data in order that investors may have a basis for making investment decisions. The announcement of the sale of shares must specify that the shares will be listed at the STC (Ho Chi Minh City) or that they are registered for trading at the STC (Hanoi); any person registering to purchase shares shall be deemed to have agreed to the listing or registration for trading of shares at the STCs.

Step 4:

Completion of procedures for conversion of an enterprise and for listing/trading:

- After completion of distribution of shares, the enterprise shall hold a general meeting of shareholders in order to pass the charter of the shareholding company and to elect the board of management and executive apparatus, and shall conduct business registration.

- An enterprise applying for permission for listing shall lodge any extra data which was missing in its application file for listing by sending it to the Ministry of Finance (State Securities Commission) in accordance with the provisions in clause 2.5 of Circular 59 mentioned above, including: register of shareholders of the company applying for listing; a valid copy of the business registration certificate; a list and summarized curriculum vitae of the members of the board of management, board of directors and board of controllers; undertakings from the members of the board of management, board of directors and board of controllers to hold at least fifty (50) per cent of the shares they own for a period of three years from the date of listing; and the charter of the shareholding company containing the particulars required by law which charter has been approved by the general meeting of shareholders. An enterprise applying for registration for trading at the STC (Hanoi) shall lodge additional documents such as the character of the shareholding company which has been approved by the general meeting of shareholders, the results of issuance of shares, and a chart showing the structure of shareholding.

- After the enterprise applying for listing has received its listing permit from the State Securities Commission, it shall register and deposit its shares with the STC (Ho Chi Minh City); and an enterprise registering for trading at the STC (Hanoi) shall complete procedures for depository and trading after it receives its certificate of registration for trading at the STC (Hanoi).

PROCEDURES

FOR THE SALE OF STATE HELD SHARES IN EQUITIZED ENTERPRISES IN ASSOCIATION WITH LISTING OR REGISTRATION FOR SHARE TRADING AT A SECURITIES TRADING CENTRE
(Issued with Decision No. 2592 of the Ministry of Finance dated 24 August 2005)

Step 1:

The body representing the portion of State owned capital in a company shall select [an enterprise] and issue a decision to sell the State owned shares in the equitized enterprise in association with listing at the STC (Ho Chi Minh City) or registration for trading at the STC (Hanoi).

Step 2:

After there is a decision by the competent body on approval of the plan to sell the State owned shares, the representative of the portion of State owned capital in the company shall issue a decision to sell the State shares or shall request that a general meeting of shareholders be convened in order to vote on and pass a decision to sell a reduced number of State shares (if the State shareholder is still within the period during which it is deemed to be a founding shareholder and it is proposed that it will hold less than twenty (20) per cent of the shares in the company) and to vote on and pass a decision to list or register for share trading at an STC.

Step 3:

Preparation of a data file to service the sale of the State held shares, and evaluation of those shares and a plan for a public sale of the shares:

If the volume of State held shares which it is proposed to sell have a total face value of above ten (10) billion dong, then there must be an auction at a STC; if the value is below ten (10) billion dong then the sales may be sold at a STC or via an intermediary organization. The plan for distribution of shares must contain a provision on the ratio to be sold to the public being investors external to the enterprise, and this ratio must comply with the criteria for listing or the criteria for registration at an STC.

In the case of listing at the STC (Ho Chi Minh City), there must be more than fifty (50) investors external to the enterprise who hold more than twenty (20) per cent of the charter capital of the company, and in the case of a company with foreign invested capital of one hundred (100) billion dong or more, this ratio must be fifteen (15) per cent.

In the case of registration for trading at the STC (Hanoi), there must be at least fifty (50) shareholders who hold shares.

Step 4:

A company which applies for permission for listing must sign a contract with a securities company to provide consultancy on listing of the securities. Such organization shall participate in providing consultancy on formulation of the application file for listing the securities at the STC. This organization may be the same organization which has signed a contract for evaluation, to conduct an auction or to underwrite the issue, and to distribute the shares.

Step 5:

A company seeking permission for listing shall send an application file in accordance with the provisions in Circular No. 59/2004/TT-BTC of the Ministry of Finance dated 16 June 2004 to the Ministry of Finance (State Securities Commission). A company which applies for registration for trading at the STC (Hanoi) shall send an application file to the STC (Hanoi) in accordance with the provisions in Decision No. 244/QD-BTC referred to above. With respect to a newly established company which undergoes equitization within a period of one year from the date of its establishment, instead of providing audited financial statements it may provide the decision on valuation of the enterprise from the competent authority if an independent auditing organization participated in such valuation.

Any enterprise which, prior to equitization, was a dependently accounting member of a corporation, and which undertakes the sale of a reduced number of State held shares within a period of one year from the date of equitization in association with registration for trading at the STC (Hanoi), it shall be exempt from the condition requiring that its production or business operations for the year immediately preceding the year in which it registers for trading must be profitable.

Companies which apply for permission to list at the STC (Ho Chi Minh City) must consider amendments to their charter, or must have a schedule for submitting amendments to their charter which comply with the sample charter form issued with Decision No. 07/2002/QD-VPVP of the Government Office dated 19 November 2002.

Step 6:

Prior to implementing a plan on the sale of shares, the company must disclose information on the mass media and at the locations stipulated in Circular No. 60/2004/TT-BTC of the Ministry of Finance dated 18 June 2004 on public issues of shares. The announcement of the sale of shares must specify that the shares will be listed or registered for trading at a STC.

Step 7:

At the completion of the issuing tranche, the enterprise applying for permission for listing shall lodge any extra data which was missing in its earlier application file for listing by sending it to the Ministry of Finance (State Securities Commission) in accordance with the provisions in clause 2.5 of Circular 59 mentioned above, including: the results of the issuing tranche; a chart of the shareholding structure of shareholders; a list and summarised curriculum vitae of the members of the board of management, board of directors and board of controllers; undertakings from the members of the board of management, board of directors and board of controllers to hold at least fifty (50) per cent of the shares they own for period of three years from the date of listing; and the charter of the shareholding company containing the particulars required by law which charter has been approved by the general meeting of shareholders. An enterprise applying for registration for trading at the STC (Hanoi) shall lodge additional documents into its application file for registration at the STC (Hanoi) such as the results of issuance of shares, and a chart showing the structure of shareholding.

Step 8:

After the company has received its listing permit from the State Securities Commission, the listed company shall register for listing and depository of shares with the STC (Ho Chi Minh City); and a company registering for trading at the STC (Hanoi) shall complete procedures for depository and trading after it receives its certificate of registration for trading from the STC (Hanoi).