What are regulations on adjustment to charter capital of State Capital Investment Corporation (SCIC) in Vietnam?

What are regulations on adjustment to charter capital of State Capital Investment Corporation (SCIC) in Vietnam?

Pursuant to Article 65 of the organizational and operational charter of state capital investment corporation issued together with the Decree 148/2017/NĐ-CP stipulating adjustment to charter capital of State Capital Investment Corporation (SCIC) in Vietnam as follows:

1. In the course of doing business, SCIC’s charter capital prescribed in Article 5 herein may be increased for the following reasons:

a) Cash or assets allocated by the State;

b) Capital in book value received from transferor companies;

c) Capital supplements provided of its own accord from its investment and development fund;

d) Non-refundable aids;

dd) Other funding sources of state origin;

e) Other legitimate funds prescribed by laws.

2. The Prime Minister shall be accorded authority to decide any adjustment to SCIC's charter capital upon the request received from the Ministry of Finance in conformance to laws and this Charter.

3. In case of any adjustment to SCIC’s charter capital, SCIC shall be obliged to make timely adjustments in its asset balance sheet, publicly disclose its charter capital after adjustment and carry out required procedures for adjusting the charter capital in its Charter.

What are regulations on capital mobilization of State Capital Investment Corporation (SCIC) in Vietnam?

Pursuant to Article 67 of the organizational and operational charter of state capital investment corporation issued together with the Decree 148/2017/NĐ-CP stipulating capital mobilization of State Capital Investment Corporation (SCIC) in Vietnam as follows:

During its life, SCIC may pool funding sources from domestic and foreign organizations and individuals to serve its business purposes.

1. SCIC’s capital mobilization shall conform to the following rules:

c) Consult its 5-year investment and development plan and strategy, and the annual business plan;

b) Capital mobilization plan must ensure capabilities of repaying debts;

c) Approver of the capital mobilization plan must be put under the supervision and inspection in order to ensure pooled capital is used to serve right purposes and in an efficient manner;

d) Mobilizing capital from domestic organizations and individuals must be based on loan agreements with them made in accordance with laws; in case of receiving loans from state capital credit, capital credit and other relevant regulations must be observed;

dd) Mobilizing capital from foreign organizations and individuals, borrowing or issuing Government-guaranteed bonds shall be subject to laws on public debt management and other provisions of relevant laws;

e) Mobilizing capital in the form of issuance of corporate bonds shall be subject to laws.

2. Authority to approve the capital mobilization plan:

a) SCIC’s Board of Directors shall be authorized or authorize SCIC's Director General to make decision on capital mobilization plans with respect to specific projects in which the amount of capital that need to be mobilized accounts for no more than 25% of the equity specified in the financial statement in the most recent quarter or year preceding the date of capital mobilization, but does not exceed the allowed amount of funding for group-B projects as provided in the Law on Public Investment.

Mobilization of capital used for production and business activities (including amounts required as guarantees for subsidiaries) must conform to the rules under which total liability is not three times more than total equity specified in the financial statement in the most recent quarter or year preceding the date of capital mobilization.

b) If SCIC needs the amount of mobilized capital to be greater than the allowed amount specified in point a of clause 2 of this Article, it must report to the Ministry of Finance to consider granting its decision based on effective capital mobilization projects.

What are regulations on capital preservation of State Capital Investment Corporation (SCIC) in Vietnam?

Pursuant to Article 68 of the organizational and operational charter of state capital investment corporation issued together with the Decree 148/2017/NĐ-CP stipulating capital preservation of State Capital Investment Corporation (SCIC) in Vietnam as follows:

1. SCIC shall be responsible for implementing regulations on assurance of capital safety by performing the following tasks:

a) Managing and using capital and assets in accordance with laws;

b) Purchasing asset insurance;

c) Dealing with asset losses and irrecoverable debts;

d) Setting aside amounts as provisions for devaluation of goods in stock, bad debts, devaluation in financial investments, warranty on products, goods and construction projects provided as per law and the Government's regulations on functions, duties and operational mechanism of SCIC;

dd) Taking other measures regarding capital preservation under laws.

2. Board of Directors shall assume the following responsibilities:

a) Preserve and appreciate corporate capital;

b) Report to the state owner’s representative agency on any variation in SCIC’s equity.

Best regards!