What are the responsibilities and powers of the Stock Exchange in the auction of shares among strategic investors in Vietnam?
What is a strategic investor in Vietnam?
According to the provisions of Point a, Clause 3, Article 6 of Decree No. 126/2017/ND-CP, strategic investors are determined as follows:
A strategic investor may be a domestic or foreign investor that:
- has the status of a legal entity;
- has adequate financial capacity and a profitable business in the past 2 years before the date of subscribing for shares without accumulated loss; and
- has a written commitment made by a competent person when registering to become the strategic investor of the equitized enterprise that:
+ The primary business line(s) and brand(s) of the equitized enterprise will be maintained for at least 3 years from the date officially becoming the strategic investor.
The representative authority of an enterprise on the list of national brands shall request the Prime Minister to determine the specific time that the strategic investor have to make the commitment to continue maintaining the primary business line(s) and brand(s) of the equitized enterprise.
+ The purchased shares will not be transferred within 3 years from the day on which the JSC obtains the certification of first registration of JSC according to the Law on Enterprises.
+ There is a plan for assisting the enterprise after it is equitized in new technology exchange; provision of training for personnel; financial capacity enhancement; enterprise management; provision of materials; market development.
+ Compensation shall be paid for damage caused by any violation against the commitment and in which case the shares purchased by the strategic investor are at the State’s disposal.
What are the responsibilities and powers of the Stock Exchange in the auction of shares among strategic investors in Vietnam? (Image from the Internet)
Responsibilities and powers of the Stock Exchange in the auction of shares among strategic investors in Vietnam?
The responsibilities and powers of the Stock Exchange in the auction of shares among strategic investors are specified in Article 7 of the Regulation promulgated together with Decision No. 584/QD-UBCK in 2018 as follows:
- Request the Equitization Steering Committee to provide all documents and information on equitization and the auction of shares among strategic investors as prescribed;
- Set up the Auction Organizing Committee according to regulations;
- Appoint a representative to participate in the Share Auction Council;
- Formulate and issue the Decision on the establishment of the Share Auction Council and the Regulation on the Share Auction;
- Notify the Equitization Steering Committee and the equitized enterprise of the time and location of the auction;
- Making announcements and disclosing information about equitized enterprises and information related to the auction of shares among strategic investors according to Article 10 of this Regulation. In case the disclosed information is inaccurate or reflects a deviation from the information and data provided by the Equitization Steering Committee and the enterprise, the Stock Exchange shall be responsible for compensation in accordance with law;
- Receive an application for participation in the purchase of shares according to the list of strategic investors approved by the owner's representative agency, check the registration procedure to participate in the auction, enter the investor's registration information into the auction system and distribute the Auction Attendance slip to the investors. If the investor fails to satisfy the procedures for registration to participate in the auction, the Stock Exchange must notify the investor and the equitized enterprise;
- To be responsible for the accuracy and completeness of information entered into the auction system according to the investor's application for registration to participate in the auction;
- Receiving bids from investors;
- Explain the contents related to the order and procedures of the auction when investors have questions during the time of receiving the auction participation slips;
- Publicly announce at the head office and publish information on the website of the Stock Exchange about the total number of investors registered to participate in the auction and the total number of shares registered to buy at least two (02) working days before date of auction;
- Organize the auction and take responsibility for determining auction results according to regulations;
- Co-signing the Minutes of determining auction results among strategic investors according to Clause 4, Article 17 of this Regulation;
- Coordinate with the Equitization Steering Committee to announce the results of the share auction right after signing the Minutes of determining the auction results among strategic investors;
- Keep investors' bid prices confidential until official results are announced;
- Responsible for determining auction results according to regulations;
- Notify and send auction results to strategic investors according to Article 17 of this Regulation;
- Transfer all investor's registration documents to participate in the auction to the Equitization Steering Committee within ten (10) working days from the date of closing the sale of shares to strategic investors;
- Perform other activities related to the auction and sale of shares.
What are the responsibilities of strategic investors participating in share auctions?
According to Article 8 of the Regulation issued together with Decision No. 584/QD-UBCK in 2018 stipulating the responsibilities of strategic investors participating in share auctions as follows:
- Access to published information about equitized enterprises and the sale of shares to strategic investors according to regulations;
- Submit the application for registration as a strategic investor according to the announcement of the equitized enterprise;
- Submit the Application for participation in buying shares to the Stock Exchange according to the form in Appendix 7a or Appendix 7b attached to Circular No. 40/2018/TT-BTC and receive the Auction Participation slip;
- Comply with current regulations on capital contribution and share purchase in Vietnamese enterprises;
- Make one of the forms of deposit, deposit or guarantee from a credit institution, foreign bank branch in accordance with the law with a value equal to 20% of the value of shares registered to buy under the provisions of law. The starting price in the equitization plan has been approved by the competent authority within a maximum of five (05) working days from the expiration date of the strategic investor's registration to buy shares to ensure the implementation of the plan. Exercising the right to buy shares as prescribed in Clause 3, Article 10 of Circular No. 40/2018/TT-BTC;
- Submit the Auction Participation Form as prescribed;
- Receive a refund of the deposit from the equitized enterprise or request the enterprise to carry out the procedures to release the deposit or provide a guarantee in case the investor makes a deposit or has a guarantee from a credit institution as prescribed;
- Pay in full and on time the purchase price of the winning shares at the auction;
- Comply with the contents of this Auction Regulation.
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