What are regulations on business investment of State Capital Investment Corporation (SCIC) of Vietnam?

What are regulations on business investment of State Capital Investment Corporation (SCIC) of Vietnam?

Pursuant to Article 50 of the organizational and operational charter of state capital investment corporation issued together with the Decree 148/2017/NĐ-CP stipulating business investment of SCIC of Vietnam as follows:

Receipt of the rights of the state owner’s representative to SCIC, sale of state capital that SCIC has received and directly invested and SCIC’s capital investment and business activities shall be subject to the Government’s regulations on SCIC’s functions, duties and operational mechanisms.

Pursuant to Article 51 of the organizational and operational charter of state capital investment corporation issued together with the Decree 148/2017/NĐ-CP stipulating SCIC’s control over wholly SCIC-owned single-member limited liability companies in Vietnam as follows:

1. Consultancy

SCIC shall be provided with such consultancy services as investment, finance, equitization, corporate management, ownership transition, corporate merger and acquisition, and other corporate support services prescribed by law.

2. Financial investment

SCIC shall be established or shall contribute capital to establishment of fund management companies, investment trusts and other forms of financial investment as prescribed in laws and the Government’s regulations on functions, duties and operational mechanisms of SCIC and this Charter.

3. Receipt of investment trust

SCIC may receive investments in trust for the State and other domestic and foreign organizations or individuals for investing purposes and may be paid fiduciary fees agreed upon in trust agreements.

4. Other activities stipulated in law.

What are regulations on SCIC’s control over wholly SCIC-owned single-member limited liability companies in Vietnam?

Pursuant to Article 52 of the organizational and operational charter of state capital investment corporation issued together with the Decree 148/2017/NĐ-CP stipulating SCIC’s control over wholly SCIC-owned single-member limited liability companies in Vietnam as follows:

1. SCIC can make decisions on establishment, reorganization and transformation of ownership of SCIC-controlled companies after receipt of the Prime Minister’s decision on approval of policies for such activities; on their charter capital upon establishment, objectives, duties and their business lines; on adjustment to their charter capital during the period of operation, dissolution and petition for bankruptcy of SCIC-controlled companies.

2. SCIC may adopt and impose Regulations on financial management of SCIC-controlled companies.

3. SCIC may make decisions on appointment, re-appointment, discharge, rewarding and disciplining of Chairpersons, members of Board of Directors or Presidents, Director Generals, Directors or Comptrollers of SCIC-controlled companies.

4. SCIC may approve 5-year investment and development plans and strategy, and annual business plans of SCIC-controlled companies.

5. SCIC may approve and revise charters of SCIC-controlled companies.

6. SCIC may grant these companies approval of their plans for mobilization of capital, projects for investment in construction, purchase and sale of fixed assets which account for more than 50% of equity of these companies specified in financial statements made in the most recent quarter or year preceding the date on which such activities and projects take place to the extent that such investment is not greater than the allowable amount of funding for group-B projects as provided in the Law on Public Investment or makes up another percentage of equity specified in their Charters.

7. SCIC may approve financial statements, distribution of profits and setting aside of part of profits for formation of annual funds of SCIC-controlled companies.

8. SCIC shall implement other rights and obligations as stipulated by law.

What are regulations on SCIC’s management of its portions of contributed and received capital at joint stock companies and multiple-member limited liability companies in Vietnam?

Pursuant to Article 53 of the organizational and operational charter of state capital investment corporation issued together with the Decree 148/2017/NĐ-CP stipulating CIC’s management of its portions of contributed and received capital at joint stock companies and multiple-member limited liability companies in Vietnam as follows:

1. SCIC can make decisions or seek a competent regulatory authority’s decisions on investment in increase or decrease in capital, recovery of capital or disposition of its rights to purchase of capital and contribute capital to joint stock companies or multiple-member limited liability companies under the provisions of laws and SCIC’s Charter.

2. SCIC shall regulate eligibility criteria for, designation, discharge, dismissal, rewarding, disciplining, decisions on wages, salaries, allowances, bonuses and other benefits of representatives for SCIC's shares according to Article 55, 56, 57, 58 and 59 herein.

3. SCIC may assign tasks to representatives of SCIC’s shares in protecting SCIC’s legitimate rights and interests at joint stock companies or multiple-member limited liability companies.

4. SCIC may authorize SCIC’s representatives of its shares to request joint stock companies or multiple-member limited liability companies to transfer profits, distributed dividends or recovered capital to SCIC; oversee recovery of investments, collection of profits and distributed dividends in a timely manner.

5. SCIC may request representatives of SCIC’s shares to report on their assigned duties, rights and responsibilities to/for orientation of enterprises in which SCIC’s shares or portions of contributed capital make up more than 50% of their charter capital towards implementation of its general business objectives and strategies.

6. SCIC shall request representatives of SCIC's shares to prepare and submit periodic or irregular review reports on financial conditions and business activities of joint stock companies or multiple-member limited liability companies.

7. SCIC shall inspect and oversee activities of representatives of SCIC’s shares in order to prevent and take timely actions against their errors or mistakes.

8. SCIC shall implement other rights and obligations as stipulated by law.

What are methods for controlling and managing state investments in enterprises of SCIC of Vietnam?

Pursuant to Article 54 of the organizational and operational charter of state capital investment corporation issued together with the Decree 148/2017/NĐ-CP stipulating methods for controlling and managing state investments in enterprises of SCIC of Vietnam as follows:

1. SCIC shall directly manage or take control of state investments in enterprises through representatives authorized by laws currently in force, SCIC's Charter and Regulations on SCIC’s representatives that are adopted and promulgated by SCIC’s Board of Directors.

2. Forms of designation and authorization of representatives:

a) SCIC shall designate or authorized representatives through its decision to authorize a representative of SCIC’s shares to enterprises;

b) In cases where SCIC does not designate or mandate its representative, it may directly carry out rights and obligations of a shareholder, a member making capital contribution or business partner in another company in accordance with the Law on Enterprises;

c) Other forms of authorization shall be subject to SCIC’s Regulations on representatives.

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