From August 15, 2022, should a major shareholder buying shares of a joint-stock commercial bank send a written request to the State Bank of Vietnam?
- What are the regulations on increase in charter capital of joint stock commercial bank from the conversion of convertible bonds, additional charter capital reserve fund, share premium, retained earnings and other funds prescribed by law in Vietnam?
- What are the regulations on increase in charter capital of joint stock commercial bank other than the mentioned cases in Vietnam?
- From August 15, 2022, should a major shareholder buying shares of a joint-stock commercial bank send a written request to the State Bank of Vietnam?
What are the regulations on increase in charter capital of joint stock commercial bank from the conversion of convertible bonds, additional charter capital reserve fund, share premium, retained earnings and other funds prescribed by law in Vietnam?
According to Article 11 of Circular 50/2018/TT-NHNN stipulating as follows:
Article 11. Increase in charter capital of joint stock commercial bank from the conversion of convertible bonds, additional charter capital reserve fund, share premium, retained earnings and other funds prescribed by law
1. An application includes:
a) An application form, which contains at least:
(i) Necessity for increase in charter capital;
(ii) Current charter capital, specifying the number of common shares, preference shares and treasury stocks; expected increase in charter capital;
(iii) Sources used for increasing charter capital;
(iv) Expected date of completing the increase in charter capital;
b) A resolution or decision of the General meeting of shareholders on approval for plan for increase in the charter capital of joint stock commercial bank from convertible bonds, additional charter capital reserve fund, share premium, retained earnings and other funds prescribed by law;
c) The plan for increase in charger capital specified in Point b of this Clause shall contain at least:
(i) A plan for conversion of bonds into stocks, which includes: information about issued convertible bonds: number, face value and term of bonds; information about expected conversion of bonds into stocks: number of bonds, face value of bonds and rate of conversion (in case of increase in charter capital from conversion of convertible bonds into common stocks);
(ii) Information about the additional charter capital reserve fund, share premium, retained earnings and other funds determined according to the auditing result given by an independent audit firm; information about the amount of money from additional charter capital reserve fund, share premium, retained earnings and other funds which is used to increase charter capital (in case of increase in charter capital from the additional charter capital reserve fund, share premium, retained earnings and other funds);
(iii) A list of shareholders and holdings of shareholders that own shares whose value is at least 5% of voting share capital and of charter capital before and after the increase; list of shareholders and their related persons that own shares whose value is at least 20% of charter capital before and after the increase. These lists must include identity information (in case of an individual: full name and number of ID card or Citizen ID card or passport, place of issue, date of issue; in case of an organization: name of the organization, enterprise ID number, address of headquarters, full name of its legal representative, number of his ID card or Citizen ID card or passport, place of issue, date of issue) of shareholders and their related persons in accordance with regulations of law;
(iv) Information about the total holdings of foreign investors before and after the increase in charter capital.
2. Procedures for granting approval:
a) The commercial bank shall submit an application to the State Bank. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank shall request the commercial bank in writing to complete it;
b) Within 25 working days from the receipt of the satisfactory application, the State Bank shall grant a written approval for increase in charter capital. In case of rejection of the application, the State Bank shall respond and provide explanation in writing.
3. The State Bank’s written approval shall be valid for 12 months from the date on which it is signed.
4. The License shall be amended as follows:
a) Within 10 working days from the date of completing the issuance of stocks as prescribed by law, the commercial bank shall submit an application form for amendment to the License regarding the increase in charter capital and the following documents:
(i) State Securities Commission's document about the issuance of stocks;
(ii) Information specified in Points c(iii) and c(iv) Clause 1 of this Article after the completion of issuance of stocks.
b) Within 15 working days from the receipt of the application form, the State Bank shall decide to amend the License regarding the increase in charter capital.”
From August 15, 2022, should a major shareholder buying shares of a joint-stock commercial bank send a written request to the State Bank of Vietnam? (Image from the internet)
What are the regulations on increase in charter capital of joint stock commercial bank other than the mentioned cases in Vietnam?
According to Article 12 of Circular 50/2018/TT-NHNN stipulating as follows:
Article 12. Increase in charter capital of joint stock commercial bank other than the cases specified in Article 11 of this Circular
1. An application includes:
a) An application form, which contains at least:
(i) Current charter capital and charter capital expected to be increased;
(ii) A commitment to notify share purchasers of rights and obligations of shareholders in accordance with regulations of the Law on Credit Institutions. To be specific:
- Take legal responsibility for the legitimacy of the sources of funding for purchasing shares; do not use credit extended by the credit institution or FBB to purchase shares; do not purchase shares in the name of another individual or juridical person in any form, unless it is authorized in accordance with law;
- Comply with regulations of the Law on Credit Institutions on the limits on ownership of shares by shareholders, shareholders and their related persons;
- Comply with regulations on major shareholders, major shareholders and their related persons;
(iii) In case the commercial bank’s increase in charter capital results in forming a major shareholder or turning a major shareholder to a common one, the application form must contain name of the shareholder and holdings before and after the increase in charter capital;
b) A resolution or decision of the General meeting of shareholders on approval for plan for increase in the charter capital of the commercial bank;
c) The plan for increase in the charter capital of the joint stock commercial bank specified in Point b of this Clause, which contains at least:
(i) Necessity for increase in charter capital;
(ii) Total charter capital expected to be increased; total face value, types of shares issued, share issuer; expected issuance and plan tailored for each issuance (if any);
(iii) Expected date of issuance and expected date of completing the issuance of additional stocks;
(d) A list of shareholders and holdings of shareholders that own shares whose value is at least 5% of voting share capital and of charter capital before and after the increase; list of shareholders and their related persons that own shares whose value is at least 20% of charter capital before and after the increase. These lists must include identity information of shareholders and their related persons as prescribed by law.
2. Procedures for granting approval, effective period of the written approval and amendment to the License regarding the increase in charter capital shall comply with Clauses 2, 3 and 4 Article 11 of this Circular."
From August 15, 2022, should a major shareholder buying shares of a joint-stock commercial bank send a written request to the State Bank of Vietnam?
According to Clause 5, Article 1 of Circular 06/2022/TT-NHNN amending Circular 50/2018/TT-NHNN as follows:
"5. To amend and supplement Point a (iii) Clause 1 Article 12 as follows:
In case the joint-stock commercial bank’s increase in charter capital results in forming a major shareholder or turning a major shareholder to a common one, the application form must contain name of the shareholder and holdings before and after the increase in charter capital;"
Thus, in case a commercial bank increases in charter capital from August 15, 2022, a major shareholder buying shares of a joint-stock commercial bank must send a written request to the State Bank of Vietnam.
Circular 06/2022/TT-NHNN takes effect from August 15, 2022.
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