What is a major shareholder? Obligation to disclose information of major shareholders in Vietnam

What is a major shareholder? Obligation to disclose information of major shareholders in Vietnam (Internet image)

1. What is a major shareholder?

According to Clause 18, Article 4 of the Law on Securities 2019, a major shareholder means a shareholder that holds at least 5% of the voting shares of an issuer.

In which, the voting capital” means the stake or share that endows the holder the right to vote on the issues within the jurisdiction of the Board of Members or General Meeting of Shareholders. (Clause 33, Article 4 of the Law on Enterprise 2020)

2. Are major shareholders required to disclose information?

Disclosing entities according to the provisions of Clause 1, Article 118 of the Law on Securities 2019 include:

- Public companies;

- Organizations that publicly offer corporate bonds;

- Organizations that have corporate bonds listed;

- Securities companies, fund management companies, branches of foreign securities companies and foreign fund management companies in Vietnam;

- VSE and its subsidiaries, VSDCC;

- Major shareholders, groups of related persons holding at least 5% of voting shares of a public company; investors and groups of related persons holding at least 5% of fund certificates of a closed-end fund;

- Founding shareholders during transfer restriction of a public company or public investment company;

- Internal actors of public companies, public funds, public investment companies as prescribed in Clause 45 Article 4 of Law on Securities 2019, and their related persons;

- Groups of related foreign investors holding at least 5% of voting shares of an issuer or at least 5% of fund certificates of a closed-end fund;

- Other entities prescribed by the Minister of Finance of Vietnam.

Thus, major shareholders are subject to the disclosure of information in accordance with the above provisions.

3. Information disclosure rules in Vietnam

Article 119 of the Law on Securities 2019 stipulates the information disclosure rules as follows:

- Information disclosed must be adequate, accurate and timely.

- The disclosing entities are legally responsible for the information they disclose.

In case of changes to disclosed information, the disclosing entity shall promptly announce the changes and reasons for those changes.

- When disclosing information, the disclosing entities mentioned in Article 118 of the Law on Securities 2019 shall simultaneously send an information disclosure report to SSC and the organization at which the securities are listed or registered.

- An organization’s information shall be disclosed by its legal representative or the authorized spokesperson. An individual’s information shall be disclosed by himself/herself, or by an organization or individual authorized by the individual.

- Disclosing entities shall retain the information disclosed as prescribed by law.

4. Cases of information disclosure by major shareholders in Vietnam

According to Article 127 of the Law on Securities 2019, major shareholders must disclose information in the following cases:

- Organizations, individuals, groups of related persons, groups of related foreign investors shall disclose information when they become or are no longer major shareholders of a public company or public investment company.

- Organizations, individuals, groups of related persons, groups of related foreign investors that are major shareholders shall disclose information every time their holdings vary by more than 1% of voting shares of the public company or public investment company.

- Regulations in Clause 1 and Clause 2 of this Article do not apply in the following cases:

= Changes in the holding of voting shares when the public company repurchases its own shares or issues additional shares;

= Swap transactions in exchange traded funds (ETF);

= Other cases prescribed by law.

Van Trong

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE