How is the target company in securities transactions in Vietnam understood? Is there any fine for refusing to purchase shares from shareholders of the target company in Vietnam?
How is the target company in securities transactions in Vietnam understood?
Pursuant to Clause 26, Article 3 of Decree No. 155/2020/ND-CP stipulating the target company as follows:
Definitions
For the purpose of this Decree, the terms below are construed as follows:
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26. “target company” means a public company whose shares are subjects of tender offer.
Thus, the target company is understood as a public company whose shares are subjects of tender offer.
How is the target company in securities transactions in Vietnam understood? Is there any fine for refusing to purchase shares from shareholders of the target company in Vietnam?
What are the regulations on the tender offer rules for the target company in Vietnam?
Pursuant to the provisions of Article 82 of Decree No. 155/2020/ND-CP on as follows:
Tender offer rules
1. The tender offer shall ensure fairness among shareholders of the target company and investors of the investment fund.
2. The tender offer parties shall be provided with adequate information to decide their purchase of shares/closed-end fund certificates.
3. Respect the right to autonomy of shareholders of the target company and investors of the investment fund.
4. The organization or individual that makes the tender offer (hereinafter referred to as “offerer") shall appoint a securities company as the tender offer agent.
Thus, the tender offer shall ensure fairness among shareholders of the target company and investors of the investment fund.
At the same time, the tender offer parties shall be provided with adequate information to decide their purchase of shares/closed-end fund certificates.
Respect the right to autonomy of shareholders of the target company and investors of the investment fund.
The organization or individual that makes the tender offer (hereinafter referred to as “offerer") shall appoint a securities company as the tender offer agent.
Is there any fine for refusing to purchase shares from shareholders of the target company in Vietnam?
Pursuant to Point e, Clause 1, Point a, Clause 6, Article 17 of Decree No. 156/2020/ND-CP (amended by Point a, Clause 16, Article 1 of Decree No. 128/2021/ND-CP) on violations against regulations on tender offers as follows:
Violations against regulations on tender offers
1. A fine ranging from VND 100.000.000 to VND 150.000.000 shall be imposed for committing one of the following violations:
a) Directly or indirectly purchasing or subscribing shares, call option for shares, warrants and convertible bonds of the target company or closed-end fund certificates of the target investment fund, call option for closed-end fund certificates of the target investment fund outside the tender offer;
b) Selling or concluding an agreement to sell the shares or closed-end fund certificates being bid for;
c) Giving unfair treatment to holders of the same type of shares, call option for shares and convertible bonds, or closed-end fund certificates being bid for;
d) Providing information separately for shareholders or investors, or providing information for them at different levels or time;
dd) Failing to conduct tender offer transactions within the time limit prescribed in Article 93 of the Government’s Decree No. 155/2020/ND-CP dated December 31, 2020;
e) Refusing to purchase shares from shareholders of the target company or closed-end fund certificates from investors of the target investment fund;
g) Purchasing shares of the target company or closed-end fund certificates of the target investment fund under the terms and conditions other than those specified in the tender offer declaration or the prospectus;
h) Failing to purchase or purchasing shares or closed-end fund certificates that remain after the tender offer against regulations on purchase time or with price and payment method different from those in the tender offer;
i) Failing to report or disclose information on the tender offer or reporting or disclosing information on the tender offer against regulations of law;
k) Failing to apply the increased offer price to all shareholders of the target company or investors of the target investment fund, including shareholders or investors that have sent their sale proposals to the entity making the tender offer; decreasing the offer price during the process of the tender offer;
l) Failing to designate a securities company to act as the tender offer agent; failing to update information about tender offer agent which must be enclosed with certificate of tender offer agent.
2. A fine ranging from VND 150.000.000 to VND 200.000.000 shall be imposed upon securities company that acts as tender offer agent for committing one of the following violations:
a) Failing to provide tender offer instructions resulting in the commission of the violation in Clause 1 of this Article;
b) Failing to ensure that the entity making the tender offer has sufficient funds to carry out the tender offer by the official tender offer date written in the application in case it is paid for with money.
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6. Remedial measures:
a) The violating entity is compelled to conduct the tender offer according to the registered plan in case of commission of the violation in Point e or g Clause 1, or Point c Clause 3 of this Article;
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Note: The fines mentioned above are imposed upon organizations. The fines imposed upon an individual are 1/2 of those imposed upon an organization.
Therefore, the case of refusing to purchase shares from shareholders of the target company will be fined from VND 100 million to VND 150 million.
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