In which case shall the Vietnam National Coal and Mineral Industries Group be responsible for compensation to its subsidiary?

In which case shall the Vietnam National Coal and Mineral Industries Group be responsible for compensation to its subsidiary?

Pursuant to Clause 2 Article 19 of the Charter on organization and operation of Vietnam National Coal and Mineral Industries Group issued together with Decree 105/2018/ND-CP stipulating as follows:

In case of performing the following activities, if there is no agreement with the subsidiary or associate company, which causes damage to the subsidiary, associate company and related parties, Vinacomin shall be responsible for compensation: to that company and its related parties:

a) Forcing the subsidiary to sign and perform economic contracts that are unfair and unfavorable to this company;

b) Transferring capital and assets of subsidiaries in which 100% charter capital is held by Vinacomin, causing damage to the transferred company, except for the following cases: Transfer by payment method, decision to reorganize the company; accomplish the goal of providing public products and services;

c) Transferring a number of effective and profitable business activities (established by the subsidiary) from one subsidiary to another without agreement with the transferred company, resulting in the transferred company suffers a serious loss or loss of profit;

d) Deeciding on production and business tasks for the subsidiary company in contravention of the Charter and the law; assigning tasks to subsidiaries and affiliated companies to perform not on the basis of business coordination plans and contracts;

dd) Forcing a subsidiary to lend capital to Vinacomin or other subsidiaries with low interest rates, unreasonable loan and payment conditions, or to provide loans for Vinacomin or other subsidiaries to perform contracts having economic risks to the business of that subsidiary.

What are the rights and responsibilities of the owner for the Vietnam National Coal and Mineral Industries Group?

Pursuant to Article 20 of the Charter on organization and operation of Vietnam National Coal and Mineral Industries Group issued together with Decree 105/2018/ND-CP stipulating rights and responsibilities of the owner for the Vietnam National Coal and Mineral Industries Group as follows:

 1. Decide on establishment, objectives, tasks and lines of business; reorganization, ownership conversion, dissolution and bankruptcy petition; capital contribution to other enterprises.

2. Issue the Charter, amend and supplement the Charter.

3. Decide on investment in charter capital; adjust, transfer part or all of the charter capital.

4. Decide on the organizational structure and management of Vinacomin.

5. Decide on the strategy, production and business plan and investment and development plan.

6. Approve investment policies for projects using public investment capital in accordance with the Law on Public Investment; policy on buying and selling assets and loan and loan contracts. Decide and approve the policy of outward investment.

7. Prescribe the financial regime, distribution of profits, setting up and use of funds; promulgate, amend and supplement financial regulations; consider and approve the annual financial statements of Vinacomin.

8. Promulgate regulations on recruitment, salary and bonus regimes; decide on appointment, re-appointment, relief from duty, resignation, salary, reward and discipline for the Chairman and members of the Members' Council, Supervisors of Vinacomin.

9. Decide on solutions for market development, marketing and technology; stipulate the mechanism for assigning tasks and participating in the provision and assurance of public and essential products and services of the economy.

10. Supervise, examine and inspect the observance of law; evaluate the implementation of assigned goals and tasks, operation results, production and business efficiency; management, use, preservation and development of capital of Vinacomin. Evaluate the Chairman and members of the Members' Council, Supervisors of Vinacomin.

Best regards!