When is a public company repurchasing shares exempted from certain conditions in Vietnam?
Let me ask, according to the new Securities Law 2019 passed by the National Assembly, when are public companies buying back shares exempted from certain conditions? What are the exempted conditions? Thank you!
Answer: Pursuant to Clause 2, Article 36 of the Securities Law 2019 stipulates that the requirements specified in Points a, b, c, d Clause 1 of this are waived in the following cases:
a) The share repurchase is repurchased by the shareholders as prescribed by the Law on Enterprises;
b) The employees’ shares are repurchased in accordance with the regulations on employee share ownership or under a scrip issue plan or share issuance from equity;
c) The share repurchase is meant to fix a transaction error or is an odd lot buyback.
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When is a public company repurchasing shares exempted from certain conditions in Vietnam? (Image from the Internet)
In what cases is a public company not allowed to buy back its own shares in Vietnam?
Please ask: Under the new regulations, under what circumstances are public companies not allowed to buy back their own shares? Thank you!
Answer: Pursuant to Clause 3, Article 36 of the Securities Law 2019, public company must not repurchase its own shares in the following cases:
a) The company has overdue debts according to the latest audited annual financial statement. In case the expected repurchase date is later than 06 months from the end of the fiscal year, overdue debts will be identified according to the latest audited or examined biannual financial statement, except for the case in Point c Clause 2 of this Article;
b) Shares are being offered or issued to raise additional capital, except for the cases specified in Point c Clause 2 of this Article;
c) The company’s shares are being offered in a tender offer, except for the cases specified in Clause 2 of this Article;
d) There was a share repurchase or an additional share issuance to increase capital over the last 06 months, except for the cases in Clause 2 of this Article.
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How much charter capital must a joint stock company offering shares for the initial public offering have in Vietnam?
According to current securities laws, if you want to offer shares to the public, you must have a charter capital of 10 billion. It is known that there has recently been a new Securities Law, so let me ask, according to this law, how much charter capital must an Initial Public Offering Company have? Since when does it apply? Thank you!
Answer: Pursuant to Clause 1, Article 15 of the Securities Law 2019, requirements for public offering include:
1. A joint-stock company (the issuer) shall satisfy the following requirements to offer its shares publicly:
a) The contributed charter capital is at least 30 billion VND on the offering date according to the accounting books;
b) The company has profit over the last 02 years and has no accumulated loss on the offering date;
c) There is a plan for issuance and use of capital generated by the offering ratified by the General Meeting of Shareholders;
d) At least 15% of its voting shares have been sold to at least 100 non-major shareholders. If the issuer’s charter capital is 1.000 billion VND or above, the ratio shall be 10%.
dd) Before the offering date, the major shareholders have made a commitment to hold at least 20% of the issuer’s charter capital for at least 01 year from the end of the offering;
e) The issuer is not undergoing criminal prosecution and does not have any unspent conviction for economic crimes;
g) The offering is consulted by a securities company, unless the issuer is already a securities company;
h) The issuer has a commitment to have its shares listed or registered on the securities trading system after the end of the offering;
i) The issuer has an escrow account to receive payments for the offered shares.
=> Thus, based on the above regulations in Vietnam, a joint stock company offering shares to the public for the initial public offering must have a contributed charter capital at the time of registration for the offering of VND 30 billion or more calculated according to the value recorded on the accounting book.
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